Surety Bond Requirements for Mortgage Lenders and Brokers in California
California mortgage lenders and brokers get licensed through one of two paths with the California Department of Financial Protection and Innovation (DFPI). The first path is the Financing Law License and the second one is the Residential Mortgage Lending Act License. Both require a surety bond, filed through the Nationwide Multistate Licensing System (NMLS), and both scale your bond amount to your loan volume.
Which path fits your business comes down to what you actually do. The Financing Law License covers brokering or originating loans, commercial and consumer, without servicing them afterward. The Residential Mortgage Lending Act License is built for full-service mortgage banking: it's the path that supports servicing loans long-term, selling into the secondary market, and getting FHA or VA approval. A Residential Mortgage Lending Act licensee can also broker loans, so it's the more comprehensive and more heavily regulated of the two.
If your business also includes general commercial or consumer lending beyond mortgages, see our California Finance Lenders Bond page.
Financing Law License - Surety Bond Requirements
Mortgage lenders and brokers licensed under the Financing Law License post a bond based on the aggregate dollar amount of residential mortgage loans they originated in the prior year:
| Aggregate Loans in Prior Year | Bond Amount |
|---|---|
| $0 - $1,000,000 | $25,000 |
| $1,000,001 - $50,000,000 | $50,000 |
| $50,000,001 - $500,000,000 | $100,000 |
| Over $500,000,000 | $200,000 |
If you don't make residential mortgage loans and don't employ a mortgage loan originator, your bond stays flat at $25,000 regardless of volume.
Residential Mortgage Lending Act License - Surety Bond Requirements
Mortgage lenders and servicers licensed under the Residential Mortgage Lending Act (often called CRMLA) post a bond based on the same kind of aggregate volume, with different breakpoints:
| Aggregate Loans in Prior Year | Bond Amount |
|---|---|
| $0 - $50,000,000 | $50,000 |
| $50,000,001 - $500,000,000 | $100,000 |
| Over $500,000,000 | $200,000 |
If you don't employ a mortgage loan originator, your bond stays flat at $50,000. If you're applying without a prior year of loan volume to reference, you'll estimate your first year's volume in good faith to determine your starting bond amount.
Individual mortgage loan originators don't need a bond of their own under either path. They're covered under their employer's bond.
How Much Does a California Mortgage Broker Bond Cost?
The starting bond premium is 0.75% of your bond amount. For example, a $25,000 Financing Law License bond would start at $188 a year, and a $50,000 Residential Mortgage Lending Act License bond would start at $375 a year. Your exact rate depends mainly on your personal credit score; our surety bond cost guide explains how sureties price these bonds in more detail.
| License Type | Bond Amount | Starting Cost/Year |
|---|---|---|
| Financing Law License (base) | $25,000 | $188 |
| Residential Mortgage Lending Act License (base) | $50,000 | $375 |
A low credit score doesn't disqualify you from getting bonded. Through our bad credit bond program, we regularly bond applicants who wouldn't qualify elsewhere.
Complete our online application for a free, no-obligation quote.
Why Do You Need a Mortgage Broker Bond in California?
Your bond is available to recover expenses, fines, and fees the commissioner levies against you, and to compensate borrowers or consumers for losses caused by your noncompliance with the law governing your license. If you violate the terms of your license, a claim can be filed against your bond, and your surety pays out valid amounts up to your bond's full amount.
You are responsible for reimbursing the surety for anything paid out. California law also requires you to file a new bond within 10 days of any recovery on your existing one, and failing to do so is itself grounds for the commissioner to suspend or revoke your license.
If you're new to surety bonds, our what is a surety bond page covers the fundamentals.
How to Get Bonded
Bryant Surety Bonds gets you bonded in three steps.
- Complete our online application. It takes just a few minutes.
- Get approved and pay for your bond. We compare your application across 20+ A-rated carriers and issue your bond as soon as you accept a rate.
- We handle the NMLS filing. Your Electronic Surety Bond (ESB) goes directly into your NMLS record.
After you approve your quote, we'll walk you through granting us authority as your surety inside NMLS, a required step before the commissioner will accept the bond. California also requires your original bond to be filed within 10 days of its execution date.
How Do You Renew Your Bond?
- License term: Your license expires December 31 every year and must be renewed annually.
- Renewal window: NMLS opens renewals on November 1, and your renewal must be submitted by December 31.
- Bond amount: Both license types recalculate your bond amount at renewal based on your aggregate loan volume from the prior year, so your required amount can go up or down as your business changes.
We send renewal reminders 1 to 2 months before your bond expires, and our agents can help you look for ways to reduce your bond cost.
How To Apply for a Mortgage Lender or Broker License in California?
Here's what the process looks like for either license type:
- Open or update your NMLS account and complete the Company Form (MU1).
- Assemble your documentation: formation paperwork, a business plan, a management chart, and ownership disclosures for anyone with 10% or more direct or indirect interest.
- Set up a designated email account through the DFPI Self-Service Portal for official communications with the department.
- Meet the net worth and financial statement requirements for your license type. The Residential Mortgage Lending Act License requires audited financial statements; the Financing Law License accepts unaudited statements for new applicants.
- Complete background checks and credit reports for control persons, executive officers, and owners with 10% or more interest.
- Authorize your surety in NMLS so we can file your Electronic Surety Bond directly to your record.
- Cover the required fees (below).
The NMLS website provides the full documentation list for each license type.
California Mortgage Broker Licensing Fees
| Fee | Financing Law License | Residential Mortgage Lending Act License |
|---|---|---|
| Application fee | $300 | $1,000 |
| License registration fee | $0 | $0 |
| NMLS processing fee | $120 | $120 |
Credit reports and background checks carry their own NMLS fees. The NMLS System Fees page lists current pricing.
Multistate Licensing and Bonding
NMLS consolidates all your state licenses under one company record. Your bond doesn't carry over between states, though. Each state sets its own amount and requires its own Electronic Surety Bond. Kansas, for example, sets a flat $100,000 bond for its Mortgage Company License, a completely different structure from California's volume-based approach.
Bryant Surety Bonds can bond you in all 50 states through a single agency. You won't need to coordinate separate sureties for each state you're licensed in.
FAQ
Do you need a bond if you're licensed through the Department of Real Estate instead?
No. Mortgage professionals licensed through the California Department of Real Estate, rather than the DFPI, don't have a surety bond requirement under that licensing path.
Does your bond amount change every year?
Yes. Both license types recalculate your required bond amount at renewal based on your aggregate residential mortgage loan volume from the prior year, so your bond can increase or decrease as your business grows or slows down.
Does bad credit rule you out from getting bonded?
No. It affects your rate, not your eligibility. We bond applicants across the credit spectrum through our bad credit bond program.
Can you cancel your bond?
Your bond stays in effect until it's cancelled. If a claim has been paid out against your bond, California law requires you to file a new bond within 10 days of that recovery to stay in compliance.
What happens if you don't file a new bond after a claim is paid?
Your license can be suspended or revoked. California law treats failing to file a replacement bond within 10 days of a recovery, or within 10 days of the commissioner's notice that a new bond is required, as sufficient grounds for license action.
Get Bonded With Bryant Surety Bonds
Bryant Surety Bonds is licensed to issue surety bonds in California under license number 0N08760.
Questions about getting bonded in California? Call us at 866.450.3412.
