Oregon Mortgage Broker Bond Overview
To apply for a mortgage lender, mortgage loan originator, or mortgage servicer license in Oregon, you will need to submit a mortgage broker bond. The bond amounts for these license types are the same and range between $50,000 and $200,000.
The mortgage industry in Oregon is regulated by the Oregon Division of Financial Regulation, though you must apply for your license through the Nationwide Multistate Licensing System & Registry (NMLS).
Why do I need to get bonded?
The bonds required of originators, servicers, and lenders in the state guarantee their compliance with the regulations and rules that govern their specific line of business. They serve as a financial guarantee for their compliance.
If a licensee violates these laws, anyone harmed by their violation can file a claim against the bond to seek compensation. Compensation may initially be extended by the surety that backs the bond, and can be as high as the full penal sum of the bond.
To learn more about how bonds work and why businesses need them, see our ‘What is a surety bond' guide!
See the following sections for more information about the bonding requirements for these license, the cost, and how to apply.
If you have any questions about these bonds, call us at 866.450.3412 anytime!
How Much Does the Oregon Mortgage Broker Bond Cost?
The cost of your bond, also known as the bond premium, is equal to a percentage of the total amount of the bond. That percentage is determined by the surety based on the following factors.
Factors that determine the bond premium
Your personal credit score has the greatest influence on your premium. The higher your credit score, the cheaper it is to get bonded. Reversely, if your score is low, the surety will require you to pay a higher rate as additional security.
Applicants with high credit scores can typically get their mortgage broker bond at a rate between .5% and 5% of the total amount of their bond.
Applicants with lower scores can expect to get bonded at a rate between 5% and 15%.
Even though it is the most important factor, credit score is not the only thing sureties take into account. Frequently, they will also look at applicants':
- Financial statements
- Fixed and liquid assets
- Industry experience and record
What is the amount of the bond I need to obtain?
Bond amounts for loan originators, lenders, and servicers in Oregon are determined on the basis of different criteria.
For mortgage servicers the bond amount is calculated on the basis of “the total unpaid principal balance of residential mortgage loans in Oregon as of the last day of the second quarter of the year." Servicers with an unpaid principal balance of:
- Less than $10,000,000 must post a $50,000 bond
- $10,000,000 or more but less than $25,000,000 must post a $75,000 bond
- $25,000,000 or more but less than $50,000,000 must post a $100,000 bond
- $50,000,000 or more but less than $100,000,000 must post a $50,000 bond
- $100,000,000 or more must post a $200,000 bond
For mortgage lenders (also known as mortgage bankers or brokers) the bond amount is calculated on the basis of the previous four quarterly residential reports of condition submitted under OAR 441-865-0025.
First-time applicants for a lender license must post a $50,000 bond. Lenders who renew their license and who have:
- Made or negotiated less than $10,000,000 in residential mortgage loans in the previous year must post a $50,000 bond
- Made or negotiated $10,000,000 or more but less than $25,000,000 in residential mortgage loans in the previous year must post a $75,000 bond
- Made or negotiated $25,000,000 or more but less than $50,000,000 in residential mortgage loans in the previous year must post a $100,000 bond
- Made or negotiated $50,000,000 or more but less than $100,000,000 in residential mortgage loans in the previous year must post a $150,000 bond
- Made or negotiated $100,000,000 or more in residential mortgage loans in the previous year must post a $200,000 bond
Mortgage loan originators in Oregon do not need to post a bond themselves. Instead, the bond must be posted by the company that hires the originator. The bond amount for originators is based on the amount of originated loans in the state.
For persons that have not previously originated loans a $50,000 bond is required. For persons who renew their loan originator license and who have:
- Made or negotiated less than $10,000,000 in residential mortgage loans in the previous year must post a $50,000 bond
- Made or negotiated $10,000,000 or more but less than $25,000,000 in residential mortgage loans in the previous year must post a $75,000 bond
- Made or negotiated $25,000,000 or more but less than $50,000,000 in residential mortgage loans in the previous year must post a $100,000 bond
- Made or negotiated $50,000,000 or more but less than $100,000,000 in residential mortgage loans in the previous year must post a $150,000 bond
- Made or negotiated $100,000,000 or more in residential mortgage loans in the previous year must post a $200,000 bond
To get a sense of how much your bond might cost, based on your credit score, see the table below!
| Oregon Mortgage Broker Bond Cost Based on Credit Score | |||||
|---|---|---|---|---|---|
| License type | Bond Amount | Credit Score | |||
| Above 700 | 650-699 | 600-649 | Below 599 | ||
| Mortgage lender, mortgage loan originator, mortgage servicer | $50,000 | $250-$625 | $375-$750 | $1,000-$2,500 | $2,500-$3,750 |
| $75,000 | $375-$938 | $562-$1,125 | $1,500-$3,750 | $3,750-$5,625 | |
| $100,000 | $500-$1,250 | $750-$1,500 | $2,000-$5,000 | $5,000-$7,500 | |
| $150,000 | $750-$1,875 | $1,125-$2,250 | $3,000-$7,500 | $7,500-$11,250 | |
| $200,000 | $1,000-$2,500 | $1,500-$3,000 | $4,000-$10,000 | $10,000-$15,000 | |
How Do Bond Claims Occur?
The surety bond forms for Oregon mortgage lenders, originators and servicers require them to comply with the provisions of Chapter 86A of the Oregon Revised Statutes as well as any rules made under that Chapter. Those rules can be found in Chapter 441 of the Finance and Securities Regulation.
Broadly speaking, the statutes and the rules specify how licensees must conduct business. If a licensee is found to be in violation of these laws and, as a result, causes losses or damages to any person, a claim can be filed against their bond.
The bond claim's function is to secure compensation for claimants. Initially, the surety that backs the bond will investigate a claim, and may extend compensation to claimants for as much as licensee's full bond amount.
Ultimately, though, it is the bonded licensee who is liable for claims filed against their bond and who must, if the surety has paid compensation, reimburse it in full. Given the high amount of these bonds, it is best to avoid giving rise to a claim.
Apply For Your Bond Here!
To begin your application, complete our simple bond form below. We will then contact you to provide you with a free and exact quote on your bond, and further details about the bonding process.
If you have any further bond-related questions you'd like to address with one of our bond professionals, call us at 866.450.3412
Further Reading
