Pennsylvania Mortgage Broker Bond Overview
To get a mortgage broker license in Pennsylvania, individuals must post a mortgage broker bond during the licensing process. An additional bond may be required if the broker plans to accept fees in advance.
The main bond required of brokers is intended to provide coverage for the mortgage originator(s) that are sponsored by the broker. The amount of the bond is based on the actual or anticipated (for first-time applicants), amount of mortgage loan originations. Amounts are as follows:
- $50,000 bond for $14,999,999.99 or less
- $75,000 bond $15,000,000 - $29,999,999.99
- $100,000 bond for $30,000,000 – $49,999,999.99
- $150,000 bond for $50,000,000 or more
The second type of bond, required of brokers who will accept advance payments must be in an amount of $100,000.
To apply for your license, you will need to use the Nationwide Multistate Licensing System & Registry (NMLS), even though it is the Pennsylvania Department of Banking and Securities (DOBS) that regulates these licenses.
Why do I need this bond?
The bond is an agreement between you, the DOBS, and the surety that issues it. It guarantees your compliance with all state laws that apply to the business of mortgage brokerage.
If you violate these laws, and cause damages or losses to anyone, a claim can be filed against your bond. The surety that has issued your bond will then step in and may extend compensation for as much as the full penal sum of the bond.
If you'd like to know more about the purpose and function of surety bonds, see our detailed ‘What is a surety bond' guide!
In the following sections you can learn more about the cost of the bond, why bond claims occur, and how to get bonded.
For any additional questions about the bonding requirements for mortgage brokers in Pennsylvania, call us at 866.450.3412 anytime!
How Much Does the Pennsylvania Mortgage Broker Bond Cost?
To get bonded, you need to pay a surety bond premium. This premium is equal to a percentage of the total amount of your bond. How high or low that percentage is, depends on the following financial factors that sureties take into consideration.
How your bond premium is determined
Your personal credit score is the most important determining factor of your premium. The higher your credit score, the cheaper it will be for you to get bonded.
Typically applicants with high or good credit scores can get this bond at a rate between .5% and 5% of the total amount of their bond. Those with low or even bad credit scores are usually offered a bond at a rate between 5% and 15%. Credit score is not the only factor considered by sureties, even though it is the most important one. Sureties also assess an applicant's:
- Personal and business financial statements
- Fixed and liquid assets
- Industry experience and record
Find out how much your bond might cost, based on your credit score, in the table below!
|Pennsylvania Mortgage Broker Bond Cost Based on Credit Score|
|License type||Bond Amount||Credit Score|
|Above 700||650-699||600-649||Below 599|
What Can Give Rise to a Bond Claim?
The two different bonds required of mortgage brokers in Pennsylvania state a number of different conditions that licensees must comply with.
In general, the bonds require brokers to comply with the provisions of the Mortgage Licensing Act and the General Rules of Administrative Practice and Procedure (“GRAPP") as well as any other rules, provisions, statutes and the like that regulate the business of mortgage brokering.
If you violate these laws, causing losses or damages to anyone, harmed persons can file a claim against the bond. You are then liable to cover such claims even if, initially, the surety that backs the bond steps in to resolve the claim.
Sureties do not assume liability under a bond agreement, so ultimately you must repay the surety if it extends compensation. Given the large amounts of these bonds, giving rise to a claim is not advised.
Get Bonded Here!
Start your application by clicking on the banner below and completing the bond form. We'll then contact you with a free and exact quote, along with further details about the bonding process.
You can always call us at 866.450.3412 if you want to know more about the bonding process or requirements for mortgage brokers in Pennsylvania.