What are Georgia mortgage bonds?
The Georgia Department of Banking and Finance requires mortgage bonds as part of the licensing process. So, when you apply for a mortgage lender or broker license, you must post the corresponding surety bond to get approved.
Essentially, these bonds protect the state and the public from brokers and lenders who don’t follow the licensing regulations. If a broker/lender fails to adhere to their licensing laws (typically by committing a fraudulent or illegal activity), the injured party can recover damages by filing a claim on the broker/lender’s bond with the surety company. The broker/lender must reimburse the surety for any damages paid out on a claim, plus any additional fees or expenses incurred by the surety.
What are the different bonding requirements?
Each surety bond has different bonding requirements. Most notably, the bond term and the bond amount. For Georgia mortgage bonds, the bond amounts vary. The mortgage broker bond has a bond amount of $150,000, while the mortgage lender bond has a required bond amount of $250,000.
Both the mortgage lender bond and the broker bond have a one-year term, with no specific expiration dates. Meaning that no matter what time of year you purchase your bond, it will be effective for one year until it is either renewed or canceled.
What types of mortgage licenses are there in Georgia?
The three primary mortgage licenses in Georgia are for mortgage lenders, mortgage brokers, and mortgage loan originators (MLO).
Mortgage lenders are businesses that underwrite residential mortgage loans, either to applicants directly or via brokers.
Mortgage brokers are individuals and businesses that connect applicants to mortgage lenders. Mortgage brokers may work with several mortgage lenders to find their customers the best loan terms. As discussed, both of these license types have a surety bond requirement.
The third license is for mortgage loan originators. MLOs are individuals who accept applications for or negotiate the terms of a residential mortgage loan in return for compensation or some other gain. This type of license does not have a surety bond requirement.
As an aside, we’d like to point out that the Georgia Department of Banking and Finance utilizes the Nationwide Mortgage Licensing System (NMLS) to process and manage mortgage licenses.
How much do mortgage bonds cost in Georgia?
The costs of these bonds vary due to several factors: the bond type, bond amount, the credit of the individual(s) applying, and other various factors. Below we’ll discuss how each factor may affect your premium.
Bond Type
Every surety bond is a little different. As such, each bond has different underwriting requirements. Some surety bonds see a larger number of claims, which means the surety company takes on more of a risk when writing them. Those types of bonds are often quoted at higher premium rates (e.g., freight broker bonds).
Bond Amount
Each bond has a different required bond amount, generally set by the obligee. The obligee in this case is the Georgia Department of Banking and Finance. The Georgia mortgage broker bond has a bond amount of $150,000. While the mortgage lender bond has a bond amount of $250,000. The surety company will assign you a percentage, called your premium rate. Multiply your premium rate by the bond amount, and you will have your premium (what you pay).
Credit
The main factor that determines your premium rate is your credit. Due to the nature of the mortgage industry, these bonds are underwritten. This means that the surety will look at several factors, most importantly your credit, to determine what your premium rate will be. The better your credit, the lower your quote. The surety company will perform a soft credit check, so it won’t harm your credit score.
Other factors
There are some cases where we may ask for additional information to find you a quote. For instance, if you have poor credit we may ask for personal and business financials to provide the surety with a better understanding of your financial standing in hopes of getting you a better quote.
For individuals with excellent credit, we’ve seen the mortgage broker bond quoted for as low as $1,125. For the Georgia mortgage lender bond, we’ve seen quotes starting at $1,875.
How to become a licensed MLO
Mortgage loan originators are usually licensed as individuals, as opposed to businesses. But how does someone become a licensed MLO? Well, we’ve made a brief list of the steps you must take to become a licensed MLO in Georgia.
- Complete 20 hours of pre-license education (NMLS approved)
- Pass the SAFE MLO exam
- Submit your application
This consists of the Individual Form (MU4) and the Georgia Mortgage Loan Originator Applicant Affidavit - Pay the licensing fee of $100 (plus additional NMLS fees)
- Complete a criminal background check
- Submit to a credit report check
- Submit a sponsorship request from your employer
Your employer must be a licensed or registered mortgage broker or lender with the required surety bond coverage
How to get your mortgage broker license
Unlike the MLO license, a mortgage broker license is typically issued to a company. To get your mortgage broker license, you must:
- Complete and submit the Company Form (MU1) in NMLS. This serves as your application.
- Provide financial statements (upon request by the GA Dept. of Banking and Finance)
- Pay the licensing fee of $650 (plus additional NMLS fees)
- Submit to a credit report check
- Complete a criminal background check
- Post a $150,000 mortgage broker surety bond
- Fulfill the MLO requirement
Mortgage brokers must have a licensed MLO in place prior to engaging in any mortgage activity unless you act only as a processor
How to get your mortgage lender license
Like the mortgage broker license, the mortgage lender license is also a company license. Below are the requirements to obtain your Georgia mortgage lender license.
- Complete and submit the Company Form (MU1) in NMLS. This serves as your application.
- Provide financial statements (upon request by the GA Dept. of Banking and Finance)
- Pay the licensing fee of $1,150 (plus additional NMLS fees)
- Submit to a credit report check
- Pass a criminal background check
- Pass a state background check
- Post a $250,000 mortgage lender surety bond
- Upload the following to the NMLS
Business plan
Certificate of authority (Foreign Entities)
Formation documents
Management chart
Organizational chart
Verification of lawful presence within the United States
You can find more specific details about the requirements in Georgia for each type of mortgage license here.
Get your Georgia mortgage bond
EZ Surety Bonds makes applying for surety bonds quick and easy. All you have to do is search the type of bond you need on our site and fill out the short application. You should receive your free quote within 24 hours. Apply for the Georgia mortgage broker bond today or click here to get your quote for the mortgage lender bond.
If you have any questions about surety bonds, check out our FAQ page. If you have more specific questions, feel free to reach out to our surety experts at info@ezsuretybonds.com or 1-866-546-4605.
Key Takeaways
- Georgia has 3 mortgage licenses: the mortgage loan originator license, mortgage broker license, and mortgage lender license.
- The mortgage broker and lender licenses have a surety bond requirement. The MLO license does not.
- The mortgage broker bond has a bond amount of $150,000.
- The mortgage lender bond has a bond amount of $250,000.
- The cost of the mortgage lender and broker bonds are based on several factors, including the bond amount and your credit.
