What are DC 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 Banking Bureau of the District of Columbia’s Department of Insurance, Securities and Banking Division
- A surety company
The bonds provide a guarantee that licensed finance professionals conduct business in compliance with the regulations set forth in the D.C. Official Code and D.C. Municipal Regulations
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 DC finance & mortgage broker bonds cost?
The Department of Insurance, Securities and Banking 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 $1 million in mortgage loans: $12,500 surety bond
- Between $1 million and $2 million in mortgage loans: $17,500 surety bond
- Between $2 million and $3 million in mortgage loans: $25,000 surety bond
- More than $3 million in mortgage loans: $50,000 surety bond
The bond requirements for other finance bonds in the District of Columbia are as follows:
- DC Check Casher Bond: $5,000
- DC Money Lender License Bond: $5,000
- DC Money Transmitter Bond: $50,000
- DC Student Loan Servicer Bond: $50,000
- DC Finance Lender 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 the District of Columbia finance and mortgage broker bonds typically cost between 1% and 5% of the total bond amount. EZSurety has issued mortgage lender bonds in the District of Columbia for premiums as low as $188.
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 District of Columbia 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 Washington D.C.?
To become a licensed mortgage broker in the District of Columbia, you must meet the following licensing requirements:
- Complete the criminal background check
- Submit your personal financial statements
- Provide credit reports for all controlling persons
- Submit a Certificate of Registration issued by the District Department of Consumer and Regulatory Affairs
- Submit your application through the Nationwide Multistate Licensing System & Registry (NMLS)
- Post the appropriate surety bond
- Pay $1,200 in license costs and a $36.25 background check fee
For information on obtaining other finance licenses in the District of Columbia, you can visit the NMLS Resource Center.