What are Maryland 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 Office of the Commissioner of Financial Regulations
- A surety company
The bonds provide a guarantee that licensed finance professionals conduct business in compliance with the regulations set forth in the Maryland Annotated Code
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 Maryland finance & mortgage broker bonds cost?
The Maryland Department of Labor, Office of the Commissioner of Financial Regulation classifies all mortgage brokers and mortgage servicers as mortgage lenders. All mortgage lenders are required to post a Lender Licensee bond as part of the licensing process. The required bond amount varies depending on the lender’s aggregate mortgage loan volume the previous year:
- Less than $3 million in mortgage lending: $50,000 surety bond
- Between $3 million and $10 million in mortgage lending: $100,000 surety bond
- More than $10 million in mortgage lending: $150,000 surety bond
The required bond costs for other finance bonds in Maryland are as follows:
- Credit Hauling Bond: $3,000
- Credit Services Business Bond: $50,000
- Debt Management Bond: Up to $100,000
- Consumer Loan Licensee Bond: Varies
- Investment Advisor Bond: $10,000
- Money Transmitter Bond: $150,000
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 Maryland finance and mortgage broker bonds typically cost between 1% and 5% of the total bond amount. EZSurety has issued mortgage broker bonds in Maryland for premiums as low as $675.
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 Maryland mortgage broker bond. EZSurety still offers competitive rates to individuals with low credit scores or other financial issues.
How to get your mortgage lender license in Maryland?
To become a licensed mortgage broker in Maryland, you must meet the following licensing requirements:
- Complete the criminal background check
- Submit your personal financial statements
- Provide a copy of your credit report
- Submit a copy of the trade name registration certificate from the Maryland Department of Assessments and Taxation
- 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 $1,000 licensing fees, $100 processing fee, and $36.25 background check fee
For information on obtaining other finance licenses in Maryland, you can visit the NMLS Resource Center.