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How much does a residential mortgage lending act bond cost?
There is not a set amount that residential mortgage lending businesses need to be bonded for in Ohio. The Residential Mortgage Lending Act states that the bond needs to be 0.5% of the aggregate loan amount of residential mortgage loans originated in the preceding calendar year. The bond needs to be at least $50,000 and cannot exceed $150,000.
These bonds are subject to underwriting, meaning that the financial history of the applicant must be evaluated before they can get a quote. The better the applicant’s credit, the lower their premium will be and the higher the likelihood is they will be approved for their bond. A highly qualified applicant with exceptional credit is typically approved at a rate of 1-3% of the total bond amount.
We can provide your free, no-obligation bond quote within 1 business day. Call 1 (800) 308-4358 or submit a bond request to get started!
Why are mortgage lender bonds required in Ohio?
Mortgage lender bonds in Ohio are required because they ensure the lender will conduct business ethically and in accordance with Ohio law. This is essential for this type of business because mortgage lenders are entrusted with large amounts of money and consumers want reassurance that their money will be handled well. Therefore, a surety bond must be on file with the mortgage lending company at all times while they remain in business. The bond needs to be renewed every year and it expires on December 31 of the year it was issued.
What’s the fine print?
Ohio mortgage lender bonds expire annually on December 31. This bond may be continued for a subsequent year if the surety and principal sign a continuation certificate. These bonds remain in full force during their term unless canceled by the surety or principal. For cancellation, the surety must send a written cancellation notice to the obligee 30 days before bond termination.
How to become a licensed residential mortgage lender in Ohio
Residential mortgage lender licenses are issued through the Nationwide Mortgage Licensing System (NMLS). Prospective residential mortgage lenders must fill out an application on the NMLS website, which includes a $600 application filing fee, financial statement of the company, credit report, FBI background check, business plan, proof of surety bond, and formation documents. To see a full list of requirements needed to submit the application, please visit the NMLS website.