Overview of Mississippi Mortgage Broker Bond Requirements
To get a mortgage broker license in Mississippi, you need to apply through NMLS for a license from the Department of Banking and Consumer Finance. A central licensing requirement is to post a $25,000 mortgage broker bond.
This bond’s purpose is to serve as a guarantee that you will comply with all the provisions of Chapter 81 of Title 18 of the Mississippi Code Annotated. These provisions include the obligations and responsibilities that brokers have when providing services in the state.
If, as a licensed broker, you breach these provisions and thereby cause losses or damages to any person that you have any contractual obligations toward, a claim can be filed against your bond. Such a person must then be compensated, and the surety that backs your bond may extend as much as the full amount of the bond when covering a claim.
Not sure how bonds work or why you need one? See our detailed ‘What is a surety bond’ guide for a comprehensive explanation!
Read on for more information about the cost of getting bonded, how bond claims work, and how you can get this bond.
You can always call us at (866)-450-3412 to speak to one of our bond experts.
Mississippi Mortgage Broker Bond Cost
To get bonded, you have to pay a surety bond premium which is a percentage of the total amount of your bond. The exact percentage is determined by your surety when you apply.
The surety will review your personal credit score, your financial statements, assets and liquidity, and possibly even your professional resume to determine the exact rate at which it can issue your bond. Personal credit is the most important factor, and the higher your score is - the less you will need to pay for your bond.
For first-time license applicants, the amount of the Mississippi mortgage broker bond is $25,000. In subsequent years, when you apply for a renewal of your bond, your bond amount may be $15,000, $20,000 or $25,000 depending on the volume of residential mortgage loans you originated in the previous licensing year.
If you have a FICO score of 700 or more, you can expect to get the lowest possible rate on your bond, regardless of your bond amount. For a quick estimate of your bond cost, try our bond calculator or see the table below. For a precise and free quote on your bond - complete our bond application form!
Surety Bond Cost Calculator
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|Loan Origination Volume||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|$1,000,000 or less in originated loans||$15,000||$100-$187.5||$112.5-$225||$300-$750||$750-$1,125|
|More than $1,000,000 but less than $5,000,000||$20,000||$100-$250||$150-$300||$400-$1,000||$1,000-$1,500|
|More than $5,000,000||$25,000||$125-$312.5||$187.5-$375||$500-$1,250||$1,250-$1,875|
|First-time license applicants||$25,000||$125-$312.5||$187.5-$375||$500-$1,250||$1,250-$1,875|
Bad Credit Bond Program
Applicants with a low credit score, or bankruptcy, liens, or civil judgments may get turned down by some sureties.
Through our Bad Credit Program we can offer such applicants individual solutions and help them get bonded. Our program is open to mortgage brokers who have a low score but require a bond.
To get a bond under this program, you may need to pay a higher bond cost. This is because applicants with lower scores are perceived by sureties as constituting a higher risk. But by improving your credit score over time, you will be able to receive better rates!
See the program page to find out more about getting a bond a with low credit!
Claims Against Your Mississippi Mortgage Broker Bond
81-18-11 of the Mississippi Code Annotated states that the bond required of mortgage brokers in the state is intended to guarantee their compliance with the Code as well as with the conditions of any contracts they have with their clients.
The section furthers states that the bond is in favor of the state of Mississippi, and for the benefit of anyone who suffers a loss or damage as a result of a broker’s violation as described above. Secondly, the bond is also intended to cover any civil penalties or fines for investigation and persecution incurred by the state as a result of such violations.
If a mortgage broker in the state causes such losses and damages as described in the law, the persons that are harmed by the violation may file a claim against the broker’s bond to receive compensation. In this case, the surety will investigate the claim and, if it determines the claim to be legitimate, will typically extend compensation to claimants. The compensation which it extends must cover for the losses but may not be higher than the full amount of the bond.
The claims process does not end there, though! Under the bond agreement, it is the bonded party - in this case the Mississippi mortgage broker - who is ultimately liable for any claims. This means that the broker must reimburse the surety in full for any compensation it extends. To avoid having to repay claims, brokers should always strive to follow the law and best business practices!
Apply for Your Bond Here!
You can get a free quote on your bond by completing our bond application form. We will contact you shortly with a precise quote, along with additional information, should you want to get bonded right away.
It will take up to two working days for your bond to be issued once you have finalized your application. As soon as your bond is issued, we will send it to you via mail and email.
If you’d like to find out more about the bonding requirements or to consult our experts about the process of getting bonded, call us at (866)-450-3412!