Oregon’s New Requirements for Mortgage License

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Senate Passes Bill Requiring Mortgage Servicers in Oregon to Acquire a License

The passing of Senate Bill 98 in August of 2017 signals a change for all mortgage servicers in the State of Oregon.

All persons intending to become mortgage servicers are now required to acquire a license. This must be done prior to the 1st of January 2018 – the date on which Senate Bill 98 will take effect.

According to Senate Bill 98 – entitled the Mortgage Loan Servicer Practices Act – a person can only service a residential mortgage loan in Oregon if the said person has obtained or renewed a mortgage servicer license from the Director of the Department of Consumer and Business Services, Division of Financial Regulation.

As a requirement for the said license, each license applicant is required to furnish a surety bond with an initial amount of $50,000.


Why is there a surety bond requirement for mortgage servicers?


An Oregon Mortgage Surety Bond is needed in order to guarantee the lawful performance of the following activities:

  • Master Servicing
  • Third-party first mortgage servicing
  • Subordinate lien mortgage servicing
  • Third-party subordinate lien mortgage servicing
  • First mortgage servicing

Surety bond for licenses is statutory-based, hence the surety bond’s condition will include compliance of the mortgage servicer to the relevant state laws that govern the profession.

In addition, the scope of coverage of a surety bond will include indemnifying any person who will suffer damages or losses from the mortgage servicer’s potential erroneous act. This includes committing a breach of the surety bond’s conditions.

Once proven, the Obligee (the surety bond’s beneficiary) can then assert a claim against the bond for the purpose of indemnifying the aggrieved party.

The surety bond premium, or the amount that the mortgage servicer will be required to pay, is expressed as a percentage of the bond’s amount.

There are several factors that will be taken into consideration when computing an applicant’s bond premium.

Usually, applicants with a strong credit history will pay an annual premium of 1% up to 3% of the total bond amount.


How can I get a mortgage servicer license?


All mortgage servicer license applicants must apply through the Nationwide Mortgage Licensing System (NMLS). Each applicant must upload – in accordance with the Documents Uploads Guidance – a number of important documents. These are the following:

  • Business plan
  • Certificate of Authority/Good Standing Certificate
  • Formation documents or the classification of the applicant’s legal status
  • Management Chart
  • Organizational Chart
  • Surety Bond


The mortgage servicer license applicant must pay the required license fees upon submission as well:

  • OR License/Registration Fee: $960
  • NMLS Initial Processing Fee: $100
  • Credit Report for Control Persons: $15 per control person
  • FBI Criminal Background Check for MU2 Individual: $36.25 per person


For a full list of the requirements, you may view the mortgage servicer license application checklist here.

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