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South Dakota Mortgage Broker Bond

In South Dakota, mortgage brokers and lenders are required by the Division of Banking to obtain a Mortgage Broker/Lender Bond in the amount of $25,000, $35,000, or $50,000 as part of the licensing process. The bond serves as a financial safeguard for clients and the state against any losses caused by the licensee. The bonding company issuing the bond usually assesses the financial history and creditworthiness of the broker. The NNA has secured a premium of $6 per $1,000 in liability for all South Dakota Mortgage Brokers/Lenders without a credit check.

What is a mortgage broker surety bond?

A mortgage broker surety bond is a binding legal agreement designed to encourage honest, ethical and legal behavior in how you run your brokerage. If you act in violation of state regulations and cause harm to your clients, the surety that holds the bond can be tapped to compensate them for financial losses. You, the licensed mortgage loan broker or originator, will then be required to pay back the full amount to the surety company. This loan broker/originator bond policy is one of the most popular types of surety bonds required for mortgage professionals. However, depending on the type of mortgage license you hold, you may need to purchase a mortgage banker/lender bond instead of a broker bond. Alternatively, a mortgage servicer bond may be necessary based on your licensure.

What are the surety bond requirements for mortgage brokers and lenders?

Many states require mortgage brokers, or loan originators, to post a surety bond as part of the licensing process to operate a mortgage loan business. In addition to being licensed, mortgage bankers/lenders must also get a surety bond to guarantee compliance with state regulations governing this line of business.

Laws regulating mortgage loan professionals vary from state to state. Here are some general steps to take if you want to qualify for a mortgage surety bond:

  • Get in touch with the department in your state government that handles business licensing. Many states have helpful websites with checklists for getting started.
  • Determine the bond amount required in your state and the exact license type needed (e.g. Broker/Lender/Servicer).
  • Contact us for a free quote and begin the application process for a mortgage broker bond.

You should check the regulations in your state for specifics related to your mortgage brokerage, lending, or servicing business.

The Simple Bonding Process

View your price or request a free quote
Discover unbeatable value with coverage options tailored to your needs.
Sign your contract and pay the premium
Seal the deal and ensure protection and peace of mind for your business.
Receive your surety or fidelity bond
Expect a speedy turnaround. Our typical turnaround time is 24 hours or less.
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