The state of Maryland Department of Labor requires mortgage lenders to post a surety bond in the amount of $50,000, $100,000, or $150,000 depending upon your business's annual loan volume. 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.
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.
As a lender in MD, your required bond amount will vary depending on your annual loan volume. The minimum coverage amount is $50,000, which applies to mortgage lenders and brokers who handled less than $3,000,000 in loans during the past 12 months.
The amount you pay for a surety bond policy will depend on the bond's full coverage amount plus a review of your financial qualifications, such as personal credit history and business experience. Premiums for highly qualified applicants are in the range of 0.75% to 3% of the bond amount, or $375 to $1,500 for a $50,000 bond.
|Annual Loan Volume||Bond Amount Required||Cost
* Cost can vary depending on the bond amount required and your credit rating
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:
Consult the application checklist to get the complete instructions and requirements for entering information into the NMLS.
A surety bond is a binding legal contract among three parties:
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.