What is a Pennsylvania Mortgage Originator Bond?
The Pennsylvania Mortgage Licensing Act requires mortgage originators to furnish a surety bond as part of their license requirements to cover their conduct in transacting business in the state.
The Mortgage Originator Bond guarantees compliance with all applicable laws, rules, and regulations of the state concerning the ethical and lawful negotiation and completion of mortgage loans and transactions.
The bond covers:
Mortgage originators are any persons engaged in the business of making mortgage loan applications or offering or negotiating terms of mortgage loans for a fee or gain.
What is the bond amount?
$25,000 – if the Principal will originate or originated less than $7.5 million in mortgage loans secured in a year.
$50,000 – if the Principal will originate or originated $7.5 million to $15 million in mortgage loans secured in a year.
$75,000 – if the Principal will originate or originated $15 million to $30 million in mortgage loans secured in a year.
$100,000 – if the Principal will originate or originated $30 million to $50 million in mortgage loans secured by in a year.
$150,000 – if the Principal will originate or originated $50 million or more in mortgage loans secured by in a year.
The bond amount will be determined by the Pennsylvania Department of Banking and Securities.
The amount will be based on:
- The Principal’s amount of mortgage loans secured by Pennsylvania dwelling or residential real estate that its sponsored mortgage originators will originate.
- The Principal’s amount of mortgage loans secured by Pennsylvania residential real estate that its sponsored mortgage originators originated as indicated on his or her required periodic report filed with the Department.
The cost of the bond is a percentage of the bond amount. It typically covers 1%-5% of the bond amount. The cost may vary and is subject to a surety underwriter’s evaluation for your credit score and financial credentials.
How can I obtain a Mortgage Originator Bond?
We have made the surety bond procedure easier for you! Just follow these simple steps:
STEP 1: You must first apply for this type of surety bond. If you are ready to do that now, you can learn more about your bond costs, get your FREE quote HERE!
Once we have received your application, we will immediately start the bonding process. We will inform you about the important documents that you need to submit for the next step, which is the underwriting process.
STEP 2: An underwriter will take a thorough look at the following:
- Your financial strength
- Your job performance history
- Your credit score
- Your copy of the BOND FORM (whether individual or employer), which can be obtained from the Pennsylvania Department of Banking and Securities.
BOND FORM – individuals
BOND FORM – sponsors
STEP 3: After the underwriting process has been fulfilled, we will issue your surety bond and send it to you immediately!
What are the bond conditions?
- The Surety must be authorized to conduct business in the Commonwealth of Pennsylvania.
- The Principal (mortgage originator) must act in accordance with all provisions under the Mortgage Licensing Act, and the rules prescribed by the Pennsylvania Department of Banking and Securities.
- If the Principal dutifully performs his or her obligations, then the bond will be null and void. Otherwise; it will remain in full force and effect.
- The bond is continuous until canceled.
- The Surety reserves the right to cancel the bond upon giving the Department 30 days’ written notice indicating the intended cancellation.
If you need assistance with this type of bond, please feel free to contact us today!