Texas Mortgage Loan Servicer Bond

How Much Do Texas Mortgage Servicer Bonds Cost?

Texas mortgage servicer bond pricing is based on the bond amount required by the TX Department of Savings and Mortgage Lending and the applicant’s qualifications. 

State-required bond coverage is based on annual mortgage servicing volume: 

• Less than $25,000 loan servicing volume: $25,000 surety bond 
• $50,000+ loan servicing volume: $50,000 surety bond 

The bond premium is a small percentage of the total bond amount based on credit score. Typically, rates are 1–5% of the total bond amount. For example, a $25,000 mortgage servicer bond could cost $250 for an applicant with excellent credit. 

If you work as a mortgage professional in several states, we offer mortgage industry license bonds nationwide. 

What Is a Texas Mortgage Loan Servicer Bond?

Texas mortgage servicer bonds ensure that any clients who are wronged in the process of a mortgage transaction are compensated for financial losses. They also hold supplemental and mortgage servicers accountable to applicable industry laws and regulations. 

Who Needs This Bond? 

Section 158.052 of the Texas Finance Code § 158.002(6) requires residential mortgage loan servicers in Texas to be licensed and bonded. A residential mortgage loan servicer refers to any person or entity who: 

• Receives scheduled payments from a borrower under the terms of a residential mortgage loan, including escrow
• Makes mortgage-related payments to the loan owner or other third-party as required under the terms of the servicing loan document or contract

How Do Texas Mortgage Servicer Bonds Work?

Texas mortgage license surety bonds create a contract between three parties: 

1. Principal: The mortgage servicer who purchases the bond
2. Surety: The company that issues the bond to the principal and provides financial liability to the obligee 
3. Obligee: The Texas Department of Savings and Mortgage Lending that requires the bond before issuing a mortgage license

If the principal violates the bond terms, the surety will pay claims for damages up to the full bond amount. Then, the principal is responsible for reimbursing the surety.

These bonds remain active unless otherwise canceled by the surety or the principal. If either party decides to terminate the bond early, they must provide 60-days’ written notice to the obligee.

How to Become a Mortgage Servicer in Texas

Use the NMLS TX Residential Mortgage Loan Servicer Registration New Application Checklist to gather the appropriate documentation and meet the licensing requirements. Take the first step in becoming a licensed mortgage servicer by applying for your surety bond today!