Minnesota Mortgage Broker Bond Requirements
To get a residential mortgage servicer, a residential mortgage originator, or an accelerated mortgage payment provider license in Minnesota, you need to get a $100,000 mortgage broker bond.
These licenses are issued and regulated by the Minnesota Department of Commerce. To apply for your license, though, you must register in the Nationwide Mortgage Licensing System (NMLS) and submit your bond and paperwork there.
Why Do I Need This Bond?
Bonds required of mortgage businesses in Minnesota are a form of guarantee that the licensed business will comply with the provisions of the state statutes, such as Chapter 58.
According to the law, the purpose of the bond is to serve for the recovery of expenses, fines, or fees that licensees must pay or for any losses suffered by borrowers due to mortgage brokers’ noncompliance with the law.
If a Minnesota mortgage broker causes any losses to borrowers, the latter may file a claim against the broker’s bond to seek compensation. The surety that backs the bond will then investigate the claim to determine whether to compensate claimants and in what amount. The maximum compensation that a surety may extend can be as high as the full penal sum of the bond.
Never gotten bonded before? See our ‘What is a surety bond’ guide to learn about how bonds work and why you need one!
See the sections below for more information about how much it costs to get bonded, and how to apply!
If you have any additional questions about getting a mortgage broker bond in Minnesota, call us at 866.450.3412!
What’s The Cost of The Minnesota Mortgage Broker Bond?
To get bonded, you must pay a bond premium. The bond premium, or your actual surety bond cost, is equal to a fraction of the total amount of your bond.
It is determined by the surety company that issues your bond, based on the following factors that it takes into consideration.
Factors That Determine Your Bond Premium
Your personal credit score has the greatest impact on your bond premium. The higher your score is, the cheaper it will be to get bonded.
For example, applicants that have a very high score, one of 700 FICO or more, are typically bonded at a rate between .75% and 1.5% of the total amount of their bond.
Applicants with somewhat lower scores can expect to be offered a rate of no more than 3%, whereas applicants with low scores are bonded at rates upward of 3%.
On top of your credit score, a surety will sometimes also request to review some or all of the following information:
- Personal and business financial statements
- Fixed and liquid assets
- Work experience and record
Want to know how much your bond might cost? See the table below to get an estimate of the cost of your bond, based on your credit score.
|Minnesota Mortgage Broker Bond Cost Based on Credit Score
How to Get a Minnesota Mortgage Broker Bond
Ready to apply for your bond? Click on the banner below to complete our brief bond application form. We will then contact you to provide you with a free quote on your bond, along with additional information.
Is there anything you’d like to discuss with us about getting this type of bond? Call us at 866.450.3412 anytime!