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
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.
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.
Have questions? Call 1 (800) 308-4358 to speak with a specialist today.
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!
