What are Illinois 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 Department of Financial and Professional Regulation.
- A surety company
The bonds provide a guarantee that finance professionals comply with license regulations like those set forth in the Illinois Compiled Statutes
If the licensee 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 Illinois finance & mortgage broker bonds cost?
The State of Illinois Department of Financial and Professional Regulation, Division of Banking requires residential mortgage brokers to post a surety bond as part of the licensing process. The required bond amount is based on the broker’s annual mortgage loan volume:
- Less than $5 million in loans: $25,000 bond
- Between $5 and $20 million in loans: $50,000 bond
- Between $20 and $50 million in loans: $75,000 bond
- Between $50 and $100 million in loans: $100,000 bond
- Over $100 million in loans: $125,000 bond
The bond requirements for other finance bonds in Illinois are as follows:
- Illinois Money Transmitter Bond: $50,000 and upwards
- Illinois Debt Management License Bond: $25,000 and upwards
The surety company issuing the bond determines your premium rate, which is the percentage of the total bond cost you pay as the premium. Premium rates for Illinois finance and mortgage broker bonds typically cost between 1% and 5% of the total bond amount. EZSurety has issued mortgage broker bonds in Illinois 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 an Illinois 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 Illinois?
To obtain a residential mortgage license in Illinois, you must meet the following licensing requirements:
- Complete a criminal background check
- Submit your financial statements
- Provide credit reports for all controlling persons
- Provide a Certificate of Good Standing
- Submit your application through the Nationwide Multistate Licensing System & Registry (NMLS)
- Post the appropriate surety bond
- Pay $2,800 in licensing fees
For information on obtaining other finance licenses in Illinois, you can visit the NMLS Resource Center.