What are Louisiana finance & mortgage broker bonds?
Finance and mortgage broker bonds are legally binding agreements between three parties:
- Finance professionals such as mortgage brokers and finance lenders
- A government agency like the Louisiana Office of Financial Institutions
- A surety company
The bonds provide a guarantee that licensed finance professionals conduct business in compliance with the regulations set forth in the Louisiana Revised Statutes
If the finance professional fails to comply with the regulations, the surety company will pay out financial losses to damaged parties up to the full bond amount. The finance professional is liable to reimburse the surety for any damages paid under the bond.
How much do Louisiana finance & mortgage broker bonds cost?
The Louisiana Office of Financial Institutions classifies all mortgage brokers and mortgage servicers as residential mortgage lenders. Mortgage lenders are required to post a $25,000 surety bond as part of the licensing process.
The surety company issuing the bond determines your premium rate, which is the percentage of the total bond amount you pay as the premium. Premium rates for Louisiana finance and mortgage broker bonds typically cost between 1% and 5% of the total bond amount. EZSurety has issued mortgage broker bonds in Louisiana for premiums as low as $375.
During the application process, the surety company evaluates your personal credit, financial statements, industry experience, and licensing history. Applicants with good credit generally receive the lowest rates, however, bad credit will not prevent you from securing a Louisiana mortgage broker bond. EZSurety still offers competitive rates to individuals with low credit scores or other financial issues.
How to get your mortgage broker license in Louisiana?
To become a licensed mortgage broker in Louisiana, you must meet the following licensing requirements:
- Complete the criminal background check
- Provide credit reports for all controlling persons
- Submit your application through the Nationwide Multistate Licensing System & Registry (NMLS)
- Post the appropriate surety bond
- Pay $600 in licensing fees and a $36.25 background check fee
For information on obtaining other finance licenses in Louisiana, you can visit the NMLS Resource Center.