Mortgage Loan Originator Bond - Statewide in Delaware

Brief Summary

A new Delaware loan originator with no prior Delaware volume starts at the $25,000 tier, and if you work for a licensed Delaware lender or broker, its bond may already cover you. When you do need your own bond, we size it to last year's Delaware origination volume, issue it in a form the Commissioner accepts, and keep it at the right tier as your volume grows.

Every Delaware mortgage loan originator must be covered by a surety bond under 5 Del. C. § 2415. The amount is set by Bank Commissioner Regulation 2401, section 12.0, according to the dollar volume of Delaware mortgage loans the originator produced in the prior calendar year, starting at $25,000 for $11,000,000 or less and rising in steps to $200,000 above $83,000,000. An originator who is an employee or exclusive agent of a Chapter 21 or Chapter 22 licensee may be covered by that company's bond instead.

We can help with all Delaware bonds!

How to Apply for a Mortgage Loan Originator Bond:

• Check whether your employer, as a Chapter 21 or Chapter 22 licensee, already covers you under its bond and has notified the Commissioner.
• If you need your own bond, total your Delaware mortgage loan volume for the prior calendar year to find your tier.
• Provide your legal name and NMLS details exactly as they appear on the license application.
• Provide your home address and Social Security number for the surety's credit review.
• Pay the premium and receive the executed bond at your tier amount.
• File the original bond with the Office of the State Bank Commissioner and pay the $250 investigation fee and $250 license fee.

Detailed Information About the Delaware Mortgage Loan Originator Bond:

The bond amount depends on last year's Delaware volume

There is no single flat amount. Section 12.2 of Regulation 2401 ties the minimum bond to the dollar volume of Delaware mortgage loans the originator originated in the year ending December 31 before the license year:

• Not more than $11,000,000: $25,000
• $11,000,001 to $23,000,000: $50,000
• $23,000,001 to $35,000,000: $75,000
• $35,000,001 to $47,000,000: $100,000
• $47,000,001 to $59,000,000: $125,000
• $59,000,001 to $71,000,000: $150,000
• $71,000,001 to $83,000,000: $175,000
• $83,000,001 and over: $200,000

A bond that stays in effect for more than one year must be adjusted as of December 31 each year so the required minimum is maintained. Section 12.3 also lets the Commissioner require a larger bond based on the particular circumstances of an applicant or licensee.

When your employer's bond covers you

Under 5 Del. C. § 2415, an originator who is an employee or exclusive agent of a licensee under Chapter 21 or 22 of Title 5 can be covered by that licensee's bond in place of an individual bond. When the originator tier is greater than the limit in the employer's chapter, the originator amount applies. Regulation 2204 adds two points for Chapter 22 licensees. The company must notify the Commissioner in writing which originators its bond covers and of any change in that coverage, and a letter of credit cannot be used to cover originators. Only a surety bond does that.

Who the bond protects

The bond runs to the State for the benefit of the Office of the State Bank Commissioner and all consumers injured by wrongful acts. The surety must notify the Commissioner immediately when it receives a claim and may not pay one without the Commissioner's authorization. Cancellation requires written notice filed with the Commissioner at least 30 days before it takes effect.

Who does not need the license

Section 2404(b) exempts registered originators employed by depository institutions or their regulated subsidiaries, individuals who deal only with immediate family members, individuals financing their own residence, and attorneys who negotiate loan terms as an ancillary part of representing a client, unless the attorney is compensated by a lender. Anyone else originating loans on Delaware dwellings needs the license and the bond coverage that comes with it.

Fees and license term

Applicants pay a nonrefundable $250 investigation fee plus a $250 license fee that is payable annually. Every license expires December 31, and renewal applications are due at least 30 days before expiration.

Eligibility and Requirements for a Delaware Mortgage Loan Originator Bond:

• Bond amount set by Regulation 2401 section 12.2, from $25,000 up to $200,000 based on prior year Delaware volume.
• Original corporate surety bond in a form satisfactory to the Commissioner.
• Bond running to the State for the benefit of the State Bank Commissioner and consumers injured by wrongful acts.
• Annual adjustment as of December 31 to keep the bond at the required minimum.
• At least 30 days written notice to the Commissioner before any cancellation takes effect.

Delaware Mortgage Loan Originator Bond FAQs:

Official and Additional Resources for the Delaware Mortgage Loan Originator Bond: