Massachusetts Mortgage Broker Bond Overview
When you apply for a mortgage broker license in Massachusetts, you will be asked to post a $75,000 mortgage broker bond.
Mortgage broker licenses in the state are regulated by the state Division of Banks (DOB), even though the application process itself is managed by the Nationwide Multistate Licensing System & Registry (NMLS).
Why do I need this bond?
When you get bonded, you agree to comply with the provisions of all Massachusetts laws and rules that apply to the conduct of mortgage brokers in the state.
If you violate any of these laws, and thereby the bond agreement, any person who is harmed by your conduct can file a claim against your bond.
When a claim is filed, the surety that has issued your bond must investigate the situation to establish the legitimacy and scope of the claim. If it determines the claim to be valid, it may extend compensation to claimants for as much as the full penal sum of the bond.
Learn more about how surety bonds work from our detailed ‘What is a surety bond' guide!
See the sections below for more information about the cost of this bond, what may give rise to a bond claim, and how to apply for your bond!
Call us at 866.450.3412 anytime if you prefer to consult one of our bond experts personally.
What's the Cost of the Massachusetts Mortgage Broker Bond?
When you apply for your bond, you will be asked to pay a certain cost, also known as your bond premium. It is a percentage of your bond amount. Your surety will offer you a premium based on your application and your financial stability. You can learn more about surety bond costs in our detailed guide.
See the table below for a rough estimate on your bond cost based on your credit score
|Massachusetts Mortgage Broker Bond Cost Based on Credit Score|
|License Type||Bond Amount||Credit Score|
|Above 700||650-699||600-649||Below 599|
What Can Cause a Bond Claim?
Title 209, Section 42.00 of the Code of Massachusetts Regulations (CMR) requires applicants for a mortgage broker license in Massachusetts to post a $75,000 surety bond before they can get licensed. The purpose of the bond is to guarantee that anyone licensed as a mortgage broker in the state will comply with all their legal obligations, and conduct business in a professional manner.
If a broker violates their obligations by, for example, not extending money that is due to borrowers, a claim can be filed against their bond. When a claim is filed, the surety must investigate the issue, and possibly compensate claimants for as much as the full bond amount.
When a claimant is compensated, this concludes the claims process for them. Yet, for the broker and the surety, it hasn't. If a surety extends compensation, the broker must reimburse the surety in full. This is because liability for a claim lies with the bonded party and not the surety.
With that in mind, it is advised that you always comply with the conditions of your bond, so as to avoid any complications that may arise due to a bond claim.
Massachusetts Mortgage Broker Bond Application
To complete your initial bond application form, click on the banner below. We will then contact you to provide you with a free and precise quote on your bond, along with further information.
If you have any further questions about this bond, call us at 866.450.3412 to consult our bond professionals!