New Jersey Updates Mortgage Servicer Licensing Act

New Jersey Updates Mortgage Servicer Licensing Act

New Jersey Governor Phil Murphy recently signed into law nine different bills in an attempt to tackle high foreclosure rates in the state. Passed on April 29, 2019, Assembly Bill 4997—also known as the Mortgage Servicers Licensing Act—expands regulations for residential mortgage servicers by requiring any person acting as a mortgage servicer to obtain a license and a surety bond in the amount of $100,000 per office location.

What is a mortgage servicer?

Mortgage servicers are the most direct point of contact between the homeowner and the loan provider. They process payments on the mortgage as well as help homeowners who may be behind on their payments to get them back on track. According to New Jersey Assemblyman Vincent Mazzeo, a key cause of New Jersey’s foreclosure crisis was caused by mortgage servicer businesses with inadequately trained staff engaging in unethical business practices. By requiring mortgage servicers to be licensed and bonded, New Jersey is looking to protect homeowners from financial harm caused by unscrupulous or untrained mortgage professionals.

What are the key provisions of A-4997?

One of the key provisions of A-4997 is to define who must apply for a license and the requirements for obtaining their license. The law establishes non-bank finance companies that specialize in mortgage servicing, but are not already licensed as residential mortgage lenders, must be licensed as mortgage servicers.

Those required to obtain a license must do so within 90 days of the bill’s enactment. Once a mortgage servicer receives a license, they must adhere to record-keeping requirements, late fee restrictions, and required disclosures.

How to Obtain a Mortgage Servicer License in New Jersey

To obtain a mortgage servicer license in New Jersey, applicants must adhere to the following documentation and fee requirements established by the Department of Banking and Insurance.

  • Applicants must identify an employee from their main office and a branch manager from each branch office who have at least three years of experience in the mortgage servicing business. 
  • Applicants must file $100,000 surety bonds for each main office and any branch offices. Mortgage industry license bonds typically cost 1-3% of the total bond amount for highly qualified applicants.  
  • Applicants must file a fidelity bond and an errors & omissions insurance policy to the Department of Banking and Insurance. Each must have a prescribed minimum amount and minimum deductible.
    • A fidelity bond protects against losses resulting from fraudulent activity by employees.
    • Errors & omissions insurance pays claims and costs associated with lawsuits resulting from unintentional errors up to the policy limit.
  • The applicant must pay a $1,000 fee for their initial license and a $3,000 fee for a renewal license

For the license to be issued, the applicant and all branch managers must not have been convicted of or pled guilty to any felonies involving fraud, dishonesty, breach of trust, or money laundering unless pardoned.

How do I get bonded as a mortgage servicer in New Jersey?

Our team of surety experts has years of experience issuing mortgage industry bonds nationwide, meaning they know what it takes to get you bonded while saving you time and money. Apply online in minutes at or give us a call at 1 (800) 308-4358 to get started today!

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About the Author

Trevor Cleveland
Trevor is a Senior at the University of Missouri studying Strategic Communications. He is a marketing intern for, a leading provider of online bonding for clients nationwide.