Maryland Mortgage Lender Bond
How much does a Maryland mortgage lender bond cost?
As a lender in MD, your required bond amount will vary depending on your annual loan volume. The NNA has secured a $6 rate per thousand for bonds up to $250,000 in liability (No Credit Check). For the $500,000 and $750,000 bond amounts, applicants must provide a full year's financial statements, current balance sheet, and owner credit to qualify. Bonds are issued electronically in the NMLS system (ESB). As of July 1 , 2023, the state of Maryland as set the bond requirements according to the mortgage company's previous year aggregate funded volume to the following scale:
Cost of Maryland Mortgage Lender Bonds
|
Annual Loan Volume |
Bond Amount Required |
Cost (Annual Premium) |
|
$5,000,000 or less |
$50,000 |
$300 |
|
$5,000,001-$25,000,000 |
$100,000 |
$600 |
|
$25,000,001 - $100,000,000 |
$250,000 |
$1,500 |
|
$100,000,001 - $250,000,000 |
$500,000 |
Cost Varies* |
|
More than $250,000,000 |
$750,000 |
Cost Varies* |
* Cost can vary depending on the bond amount required and your credit rating
* Cost can vary depending on the bond amount required and your credit ratin
| Annual Loan Volume | Bond Amount Required | Cost (Annual Premium) |
|---|---|---|
| Under $3,000,000 | $50,000 | $375* |
| $3,000,000-$10,000,000 | $100,000 | $750* |
| Over $10,000,000 | $150,000 | $1,125* |
* Cost can vary depending on the bond amount required and your credit rating
What is the Maryland mortgage lender licensee bond?
Mortgage Lenders in Maryland are required to maintain a $50,000 to $750,000 surety bond as a condition of licensure. This bond meets the licensing requirements for Maryland Mortgage Lender and lasts for 1 year. This bond provides protection to the state and to your customers should they suffer losses as a result of unlawful actions by your lending company.
Maryland's Department of Labor defines a mortgage lender "as any person who is a mortgage broker, makes a mortgage loan to any person, or is a mortgage servicer." That's why this surety bond is sometimes referred to as a mortgage broker bond in MD.
Why do I need this bond?
When you apply for a business license to operate as a mortgage lender, broker, or servicer in Maryland, your application must be accompanied by a mortgage lender surety bond. Applications submitted without the proper surety bond policy are considered incomplete and may be terminated from processing by the Commissioner of Financial Regulation.
What are the steps to be licensed as a mortgage lender in Maryland?
According to the Maryland Department of Labor, Licensing & Regulation, all new license applicants must initiate applications through the Nationwide Multistate Licensing System (NMLS).
You will be required to provide the following:
- Personal financial statement.
- Criminal background check.
- Memorandum of tax certification.
- Organizational chart.
- Type of business, with formation documents.
- Business plan.
- License and registration fee of $850.
- Application fee of $100.
Consult the application checklist to get the complete instructions and requirements for entering information into the NMLS.
What else should I know about the Maryland mortgage lender licensee bond?
A surety bond is a binding legal contract among three parties:
- The principal (your mortgage lending/broker company).
- The obligee (in this case the state of Maryland).
- The surety (the insurance carrier underwriting the bond).
You can avoid claims by properly paying any judgments awarded to plaintiffs against you. However, in the event that a judgment is unpaid, the plaintiff will file a claim with the surety company to make payment. The surety company will seek reimbursement from you for any unpaid claims.