What are Tennessee 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 Tennessee Department of Financial Institutions
- A surety company
The bonds provide a guarantee that licensed finance professionals conduct business in compliance with the regulations set forth in the Tennessee Code Annotated Title 45 Chapter 13
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 Tennessee finance & mortgage broker bonds cost?
The Tennessee Department of Financial Institutions requires mortgage brokers to post a $90,000 surety bond as part of the licensing process. Mortgage lenders and servicers must post a $200,000 bond.
The required bond costs for other finance bonds in Tennessee are as follows:
- Credit Services Business Bond: $100,000
- Money Transmitter Bond: $50,000
- Flexible Credit Lender Bond: $25,000 per location
- Securities Dealers and Investment Adviser Bond: $10,000
- Industrial Loan and Thrift Bond: $200,000
- Litigation Financier: $50,000
- Title Pledge Lender: $25,000 per location
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 Tennessee finance and mortgage broker bonds typically cost between 1% and 5% of the total bond amount. EZSurety has issued mortgage broker bonds in Tennessee 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 Tennessee 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 Tennessee?
You can get your Tennessee Mortgage License by meeting the following requirements:
- Complete the criminal background check
- Submit company financial statements showing proof of at least $25,000 tangible net worth
- Provide credit reports for the controlling persons
- Submit Certificate of Authority/Good Standing Certificate through the Tennessee Secretary of State
- 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 Tennessee, you can visit the NMLS Resource Center.