What are North Carolina 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 North Carolina Commissioner of Banks
- A surety company
The bonds provide a guarantee that licensed finance professionals conduct business in compliance with the regulations set forth in the North Carolina General 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 North Carolina finance & mortgage broker bonds cost?
The North Carolina Commissioner of Banks requires mortgage brokers to post a surety bond as part of the licensing process. The required bond amount varies depending on the broker’s aggregate mortgage loan volume the previous year:
- Less than $10 million in mortgage loans: $75,000 surety bond
- Between $10 million and $50 million in mortgage loans: $125,000 surety bond
- More than $50 million in mortgage loans: $250,000 surety bond
Mortgage lenders are required to post a surety bond worth $150,000 at minimum.
The required bond costs for other finance bonds in North Carolina are as follows:
- Investment Advisor Bond: $35,000 Securities Division
- Good Funds Settlement Agent Bond: $300,000 and upwards
- Mortgage Servicer Bond: $150,000
- Premium Finance Company Bond: Up to $25,000
- Loan Broker Bond: $10,000
- Securities Dealer Bond: Varies
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 North Carolina finance and mortgage broker bonds typically cost between 1% and 5% of the total bond amount. EZSurety has issued mortgage broker bonds in North Carolina for premiums as low as $750.
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 North Carolina 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 North Carolina?
To become a licensed mortgage broker in North Carolina, you must meet the following licensing requirements:
- Complete the criminal background check
- Submit your personal financial statements
- Provide a copy of your credit report
- Provide proof of three years of mortgage lending experience
- Submit your application through the Nationwide Multistate Licensing System & Registry (NMLS)
- Post the appropriate surety bond
- Pay the $1,250 licensing fees, $100 processing fee, and $36.25 background check fee
For information on obtaining other finance licenses in North Carolina, you can visit the NMLS Resource Center.