Correspondent Residential Mortgage Lender ($150,000) - Corporation Bond - Statewide in New Jersey
Table of Contents
Brief Summary
$150,000 is only the starting bond for a New Jersey correspondent lender. After every annual report the corporation has to check its closed loan volume and raise the bond to $200,000, $250,000 or $300,000 if it has grown, with proof due within 30 days. Starting with a bond written in the corporation's exact legal name, on DOBI's form, keeps the license application in order.
A corporation applying for a New Jersey correspondent residential mortgage lender license files an original surety bond of at least $150,000 with the Department of Banking and Insurance, along with an audited financial statement showing $150,000 in tangible net worth. The bond runs to the State of New Jersey, covers the company's qualified individual licensee, loan originators, employees and agents, and steps up with closed loan volume under N.J.A.C. 3:15-3.1.
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How to Apply for a Correspondent Residential Mortgage Lender ($150,000) - Corporation Bond:
- Corporation's full legal name exactly as filed in NMLS, followed on the bond by "a corporation of the State of" and the state of incorporation.
- Certified copy of the Certificate of Incorporation.
- Certificate of Authority to Do Business in New Jersey if organized outside New Jersey.
- Audited, unqualified financial statement showing at least $150,000 tangible net worth, dated within one year of filing.
- Officer and owner information for the surety's underwriting review.
- Original bond signed by the president, with the corporate seal if the corporation uses one, sent to DOBI within 5 business days of the NMLS submission.
Detailed Information About the New Jersey Correspondent Residential Mortgage Lender ($150,000) - Corporation Bond:
The amount grows with volume
N.J.A.C. 3:15-3.1 sets the initial bond at $150,000, applicable to the first $50,000,000 of closed loan volume. After each annual report, the licensee must increase the bond if needed and send proof to the Department within 30 days of submitting the report.
- Closed loan volume up to $50,000,000: $150,000
- $50,000,001 to $75,000,000: $200,000
- $75,000,001 to $100,000,000: $250,000
- $100,000,001 and over: $300,000
Writing the bond for a corporation
DOBI's bond form RMLABOND1118 has a box for Correspondent Residential Mortgage Lender. For a corporate principal, the form says to insert the name and add the words "a corporation of the State of" followed by the state of incorporation. DOBI requires the name of the principal on the bond to match the applicant's full legal name exactly. The corporate signature lines call for the corporate seal, if the corporation has one, and the president's signature. DOBI wants an original, fully executed bond.
Corporate application documents
Alongside the bond, a corporation submits a certified copy of its Certificate of Incorporation, plus a Certificate of Authority to Do Business in New Jersey if it was organized outside the state. Any d/b/a name needs a file-stamped Alternate Name authorization from the N.J. Division of Revenue, and a company may use no more than three trade names per license. At least one officer, director, owner or principal must obtain a Qualified Individual Residential Mortgage Lender License, and each control person completes an F.B.I. and New Jersey State Police background check. The New Jersey specific items are due to DOBI within 5 business days of the NMLS submission.
Who the bond protects
Under N.J.S.A. 17:11C-63 the bond runs to the State for the benefit of any person injured by the wrongful act, default, fraud or misrepresentation of the licensee, its qualified individual licensees, mortgage loan originators, other employees or agents. It cannot be cancelled unless notice of intention to cancel is filed with the Department at least 30 days before cancellation takes effect.
Bank affiliates are not exempt
N.J.S.A. 17:11C-55 exempts depository institutions from the act, but it says their subsidiaries and service corporations are not exempt.
Eligibility and Requirements for a New Jersey Correspondent Residential Mortgage Lender ($150,000) - Corporation Bond:
- Minimum bond of $150,000, rising to $200,000, $250,000 or $300,000 as closed loan volume grows.
- Surety company authorized to conduct business in New Jersey.
- Runs to the State of New Jersey on DOBI form RMLABOND1118 with the Correspondent Residential Mortgage Lender box checked.
- Blanket coverage of the qualified individual licensee, loan originators, other employees and agents.
- At least 30 days notice to the Department before any cancellation takes effect.
- Proof of any required bond increase sent to DOBI within 30 days after each annual report.
New Jersey Correspondent Residential Mortgage Lender ($150,000) - Corporation Bond FAQs:
No. It is the starting amount and covers the first $50,000,000 of closed loan volume. N.J.A.C. 3:15-3.1 steps it up to $200,000, $250,000 and $300,000 as volume grows, and proof of any increase is due within 30 days of submitting the annual report.
As the applicant's full legal name, followed by the words "a corporation of the State of" and the state of incorporation, as DOBI's form instructs. DOBI requires the principal name to match the full legal name exactly.
The form's corporate lines call for the president's signature and the corporate seal, if the corporation has one. The surety signs through its attorney in fact.
Yes. N.J.S.A. 17:11C-63 requires the business licensee to obtain a blanket bond covering its qualified individual licensees and all mortgage loan originators, other employees and agents.
No. N.J.S.A. 17:11C-55 exempts depository institutions themselves, but not their subsidiaries or service corporations.
