Vermont Loan Servicer Bond Guide
If you are applying to become a loan servicer in Vermont, you'll need a surety bond. Learn how the bonding process works with this quick guide.
Bond Overview
- Purpose: To protect the state and public in the event of misconduct
- Who Needs It: All loan solicitation and servicer licensees in Vermont
- Regulating Body: The Vermont Commissioner of Financial Regulation
- Required Coverage: $25,000 for loan solicitors, $100,000 for loan servicers
- Premium Rate: Start at $375 and $2,000 respectively, credit-based
What Is a Vermont Loan Servicer Bond?
The Vermont Department of Financial Regulation requires loan servicers to get a $100,000 loan servicer bond as part of the licensing process. This bond provides financial protection for clients and the state if a loan servicer acts unethically or illegally.
How Much Do Vermont Loan Servicer Bonds Cost?
If you receive scheduled periodic payments from borrowers of residential mortgage loans (including escrow accounts) and make the payments to a third party or owner of the loan, the Vermont Commissioner of Financial Regulation requires you to post a surety bond. Loan servicers are required to submit a $100,000 surety bond, while loan solicitations only require a $25,000 bond.
Your bond cost will be a small percentage of the bond amount, typically 1–3%, based on credit score. Highly-qualified applicants may pay just $2,000 for a $100,000 Vermont loan servicer bond! Apply for a free quote now.
If you work as a mortgage professional in other states, we offer mortgage industry license bonds nationwide.
How Do Loan Servicer Bonds Work in Vermont?
A Vermont loan servicer bond establishes a contractual agreement among three parties:
- Principal: The loan servicer purchasing the bond
- Surety: The company issuing the bond to the principal
- Obligee: The Vermont DFR requiring the bond
If the principal breaks the bond terms, any party who suffers a loss can be indemnified by the bond. Unethical acts protected by this bond include the following:
- Obtaining property by fraud or misrepresentation
- Using any unfair means in servicing a loan
- Misapplying loan payments to the balance of a loan
- Failing to manage escrow accounts
How to Become a Loan Servicer in Vermont
Use the NMLS Vermont Loan Servicer License New Application Checklist to gather the appropriate documentation and meet the licensing requirements. Take the first step in becoming a licensed loan servicer in Vermont by applying for your surety bond today!
