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How much does a mortgage licensee bond cost in Connecticut?
All companies offering mortgage services must post $50,000 or $100,000 surety bonds, depending on their type of license. Those who do a larger volume of loans may need to obtain a higher bond amount. Surety bonds for mortgage brokers, mortgage lenders, and mortgage correspondent lenders are subject to underwriting, meaning an application must be sent to an underwriter before the cost of the bond can be determined. Highly qualified applicants may be approved for as little as 1% to 3% of the total bond amount.
Why Connecticut mortgage licensee bonds are necessary
By posting a Connecticut mortgage licensee surety bond, principals (mortgage lenders, correspondent lenders, and brokers) pledge to conduct business in accordance with the provisions of Section 36a-485 to 36a-498f (inclusive), 36a-534a and 36a-534b of the Connecticut General Statutes. If the principal fails to comply with these terms, the bond protects any consumer harmed as a result of the principal’s unethical business practices up to the full amount of the bond. The principal must reimburse the surety for all damages paid out.
How long are Connecticut mortgage licensee bonds valid?
Mortgage licensee bonds in Connecticut remain continuous until canceled. The surety can cancel the bond at any time by giving written notice to the Banking Commissioner stating the date cancellation will take effect. Notice must be sent by certified mail at least 30 days prior to the effective date.
The specific license type (mortgage lender, mortgage correspondent lender, mortgage broker, or mortgage loan originator) must be indicated on the bond form.
How to become a mortgage licensee in Connecticut
The requirements to become a licensed mortgage professional in Connecticut vary depending on the type of license being sought.
Mortgage Broker License
- The term “mortgage broker” refers to anyone who might need compensation, gain, or the expectation of compensation or gain to take a residential mortgage loan application or potentially offers the terms of a residential mortgage loan.
- This is secured by a mortgage on an interest in a one- to four-family owner-occupied residential property in Connecticut made by a mortgage lender.
Mortgage Correspondent Lender License
- The term “mortgage correspondent lender” refers to anyone or any entity involved in the business of making residential mortgage loans or issuing extensions of credit.
- The lender must be doing so in their own name for one- to four-family owner-occupied residential property in Connecticut. These loans cannot be held by a person or entity for more than 90 days.
Mortgage Lender License
- The term “mortgage lender” refers to any person or entity engaged in the business of making residential mortgage loans, or issuing extensions of credit, in their own name.
- These lenders use their own funds, secured by a mortgage on an interest in one- to four-family owner-occupied property in Connecticut.
Note: Connecticut mortgage servicers require a mortgage servicer bond. For more information, call 1 (800) 308-4358 to speak with one of SuretyBonds.com’s surety experts.
Mortgage Industry Surety Bonds Available Nationwide
Many states have their own surety bond requirements for mortgage professionals. This means mortgage professionals who work in several states often have multiple surety bonds. Use the map below to learn more about mortgage bonds in other states.