What are New York 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 New York Department of Financial Services
- A surety company
The bonds provide a guarantee that licensed finance professionals conduct business in compliance with the regulations set forth in the Banking Law of the State of New York
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 New York finance & mortgage broker bonds cost?
The required bond amount for finance bonds in the State of New York varies depending on the license type:
- Mortgage Broker surety bond: $10,000 and upwards
- Mortgage Loan Originator surety bond: $10,000 and upwards
- Mortgage Banker surety bond: $50,000
- Mortgage Loan Servicers surety bond: $250,000
- Money Transmitter surety bond: $500,000 and upwards
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 New York finance and mortgage broker bonds typically cost between 1% and 5% of the total bond amount. EZSurety has issued mortgage lender bonds in New York for premiums as low as $100.
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 New York 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 New York?
To become a mortgage broker in New York 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 your application through the Nationwide Multistate Licensing System & Registry (NMLS)
- Complete 20 hours of pre-licensing education courses
- Post the appropriate surety bond
- Pay the $1,615 registration fees
For information on obtaining other finance licenses in New York, check out the NMLS Resource Center.