Mortgage Broker Bond New Jersey Overview
To get a mortgage broker or lender license in NJ, you will be required to submit a $150,000 mortgage broker bond when applying for a license from the state Department of Banking and Insurance (DBI).
The license application itself, along with the surety bond and other documents, must be submitted through the Nationwide Multistate Licensing System & Registry (NMLS).
What's the purpose of this bond?
This surety bond acts as a guarantee that a licensed broker or lender will comply with the legal provisions that govern their business. These are specified in 17:11C-51 of the New Jersey Statutes, also known as the Residential Mortgage Lending Act.
If a broker violates the provisions of this Act, and causes injury to any person, the latter can file a claim against their bond. The surety that backs the bond will then investigate the claim, and may extend compensation to claimants for as much as the full penal sum of the bond.
Want to know more about how bonds work? See our detailed ‘What is a surety bond' guide!
See the sections that follow to learn more about this bond, its cost, how bond claims occur, and how to apply!
Do you have any questions about getting bonded? call us at 866.450.3412 to speak to one of our professionals!
How Much Does The New Jersey Mortgage Broker Bond Cost?
The cost of your bond, also known as the bond premium, is determined by the surety as a percentage of the full bonding amount. The following factors influence the exact cost you need to pay.
Factors that determine your bond premium
Several factors are considered by sureties when they issue a bond. Your personal credit score is the most important one among these. Other factors that sureties take into account include:
- Your personal and business financial statements
- Your fixed and liquid assets
- Your industry experience
Applicants who have a high credit score and good financials can expect to get bonded at a rate between .5% and 5% of the full bond amount.
Applicants with a lower score are considered a greater risk by sureties and can expect a rate upward of 5%. Yet, by raising your credit score, you can get increasingly better premiums over time.
See the table below to get a sense of the range within which your bond premium is likely to fall!
|New Jersey Mortgage Broker Bond Cost Based on Credit Score|
|Bond Amount||Credit Score|
|Above 700||650-699||600-649||Below 599|
What Can Give Rise to a Bond Claim?
Under this bond agreement, mortgage brokers agree not to commit any wrongful act, default, omission, fraud or misrepresentation. They also agree to comply with all obligations and responsibilities they have under the law, to perform these honestly, fairly, and equitably, and to pay any money they owe to the state.
If a licensed and bonded broker or lender violates any of the above conditions, and causes losses or damages to anyone, that person may file a claim against their bond. The claim is then investigated by the surety, which will determine its validity and the possible amount of compensation to extend. This amount can be as high as the full penal sum of the bond.
If the surety extends compensation to claimants, the bonded broker or lender is bound to reimburse it in full. This is a standard condition of every bond agreement since sureties only vouch for bond principals but do not assume liabilities that arise out of their violations.
Get Bonded Here!
To get started with your application, complete our simple bond form. We'll get in touch with you shortly to provide you with a free quote and full details about completing the bonding process.
If you have any additional questions about getting a mortgage broker bond in New Jersey, call us at 866.450.3412!