Pursuant to Vermont House Bill 182, mortgage loan solicitation businesses must now post a mortgage loan solicitation bond through the Nationwide Multistate Licensing System & Registry in order to obtain or maintain their license. The new requirements in the bill must be met by December 30, 2017. Any mortgage loan solicitation business that does not meet the requirements by this date will lose its license on December 31, 2017. Once a license is canceled, the business will have to restart the application process, including the payment of all fines and fees.
What’s the purpose of this bond?
The purpose of posting a bond is to provide evidence of financial security. A surety bond involves three parties: the principal (licensee, the business owner), the obligee (the organization requiring you to get the bond) and the surety (the insurance company backing the bond). The bond will protect the Department of Financial Regulation if the principal fails to meet the requirements associated with the bond.
How much will the bond cost?
The bond must be set at an amount of at least $25,000, although applicants should verify the required amount with the Department prior to the bond’s issuance. Once an application for the bond is approved, the premium that a business owner will pay is a percentage of that amount and is determined by an underwriter.
How does an applicant apply?
The electronic surety bond for Vermont loan solicitation licenses must be uploaded by either the licensee or surety company to the NMLS for it to be accepted. Therefore, no paper copies of the bond will be distributed. Applicants can apply for a license and receive additional information regarding the licensing process online by visiting the NMLS website.
Are there any other fees for registration?
In addition to showing proof of financial security, mortgage loan solicitation businesses must also pay a $500 registration fee, a $500 application fee and an initial NMLS processing fee of $100. There is also a $15 credit report fee per person and a $36.25 background check fee per person.
What is the protocol if already licensed?
Any mortgage loan solicitation company that registered before May 4, 2017 is able to renew its registration on or before December 1 of the third calendar year following its initial registration date. After that, the registration must be renewed annually for as long as the company wishes to provide mortgage loan solicitation services.
Have questions about the bonding process?
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