Sponsor of Mortgage Originators Bond - Statewide in Pennsylvania

Brief Summary

This is the company side of Pennsylvania originator bonding. A bank affiliate or credit union subsidiary that sponsors licensed originators has to carry it, and a bank or credit union can carry it so its originators do not each need an individual bond. One bond sized to the team's combined Pennsylvania volume takes the place of a separate bond for every originator.

Under 7 Pa.C.S. § 6112, businesses excepted from Pennsylvania mortgage licensing that sponsor licensed mortgage originators carry bond coverage for those originators in the same manner as a mortgage lender under § 6131(c)(5). The amount runs from $100,000 to $500,000 based on the total Pennsylvania loan volume of the sponsor's originators. Affiliates of banking institutions and subsidiaries and affiliates of credit unions must post it. Banks and credit unions may instead show the Department of Banking and Securities each year that every originator holds an individual bond.

We can help with all Pennsylvania bonds!

How to Apply for a Sponsor of Mortgage Originators Bond:

• Confirm which paragraph of 7 Pa.C.S. § 6112 your organization falls under.
• Total the Pennsylvania originations your originators are expected to produce in the first calendar year to pick the tier.
• Register in NMLS as a Partially Exempt Mortgage Company on Form MU1 and pay the $100 NMLS initial processing fee.
• Submit prior fiscal year financial statements, or an initial Statement of Condition if newly formed.
• Obtain the bond from a surety company authorized to do business in Pennsylvania, in a form acceptable to the Department of Banking and Securities.
• File periodic reports so the department can reset the bond amount each year.

Detailed Information About the Pennsylvania Sponsor of Mortgage Originators Bond:

Must carry it, or may carry it

Section 6112 of Title 7 lists businesses excepted from Pennsylvania mortgage licensing that can still sponsor licensed mortgage originators. How this bond applies depends on the paragraph you fall under.

Affiliates of banking institutions, and subsidiaries and affiliates of federally or state chartered credit unions, fall under § 6112(7). They must register with the Department of Banking and Securities and, in the same manner as a mortgage lender, obtain and maintain bond coverage for their mortgage originators consistent with § 6131(c)(5). That paragraph does not apply to consumer discount companies. Under § 6112(6) a consumer discount company that acts as a mortgage broker, lender or servicer is subject to § 6131(c)(5) directly.

Banking institutions and credit unions themselves fall under § 6112(1). They may register so their people can be licensed as originators, and then they choose. Either they carry this bond and file periodic reports like a mortgage lender, or they demonstrate to the department each year that every originator holds an individual bond under § 6131(f)(4).

Bond amount by originator volume

The tier follows the combined volume of the sponsor's originators in mortgage loans secured by Pennsylvania dwellings or residential real estate in a calendar year.

• Less than $30,000,000: $100,000
• $30,000,000 to $99,999,999.99: $200,000
• $100,000,000 to $249,999,999.99: $300,000
• $250,000,000 or more: $500,000

A new registrant uses the volume its originators are expected to produce in the first calendar year. After that the department sets the amount each year from the periodic report.

What the bond answers for

The bond runs to the Commonwealth and is for the use of the Commonwealth and any consumer injured by the acts or omissions of the sponsor's originators related to the regulated mortgage loan business. It must be written by a surety company authorized to do business in Pennsylvania, in a form acceptable to the department. Cancellation requires at least 30 days' notice to the department, and the bond still answers for the period it was in effect.

Registering in NMLS

These sponsors register in NMLS as a Partially Exempt Mortgage Company. The NMLS checklist shows a $0 Pennsylvania application fee and a $100 NMLS initial processing fee. It also asks for the prior fiscal year's financial statements, or an initial Statement of Condition for a startup, and a Qualifying Individual who is a management level officer at the principal place of business.

Eligibility and Requirements for a Pennsylvania Sponsor of Mortgage Originators Bond:

• Bond amount matching the originators' combined volume: $100,000, $200,000, $300,000 or $500,000.
• Bond running to the Commonwealth for its use and the use of injured consumers.
• A clause barring cancellation unless the department receives at least 30 days' notice.
• A Qualifying Individual who is a management level officer at the principal place of business.
• Every sponsored originator individually licensed through NMLS.

Pennsylvania Sponsor of Mortgage Originators Bond FAQs:

Official and Additional Resources for the Pennsylvania Sponsor of Mortgage Originators Bond: