Mortgage specialists bond changes affect four states

Mortgage specialists in Illinois, Tennessee, Minnesota, and Wisconsin looking to renew their licenses in 2011 should familiarize themselves with new surety bond requirements that have recently been enacted within their respective mortgage industries.

  • Illinois. The Illinois Division of Banking has increased the required surety bond amount for mortgage loan originators from only $20,000/professional to anywhere between $25,000 and $150,000, dependent upon loan volume. Loan originators who process $5 million in loans or less/year need a minimum $25,000 mortgage bond. Those who issue more than $100 million in loans/year will need a $150,000 bond. Other bond amounts are outlined at various points in between.
  • Minnesota. The Minnesota Department of Commerce has increased the necessary surety bond amount for mortgage specialists and loan originators from $50,000 to $100,000. Furthermore, letters of credit and net worth will no longer be accepted as alternatives to surety bonds for those applying for mortgage licenses within the state.
  • Tennessee. The Department of Financial Institutions has enacted new mortgage bond regulations similar to those of Illinois. Mortgage lenders, brokers, and servicers in the state now need increased mortgage bonds where the penal sum is calculated based on the dollar amount of residential loans the licensee produced in the state during the previous calendar year. Only one of three possible penal sum amounts can be required of the professional.
  • Wisconsin. In November 2009, the Department of Financial Institutions increased the required penal sum to $300,000 for mortgage bankers and $120,000 for mortgage brokers. Furthermore, mortgage businesses that maintain more than five branch locations will pay an additional $10,000 for each location.

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