Residential Mortgage Loan Servicer Bond - Statewide in Texas

Brief Summary

The number that matters is your Texas unpaid principal balance as of October 31 last year. At or under $25 million the bond is $25,000. Above that it is $50,000. New applicants start at $25,000. The $200,000 figure in the statute is a ceiling the finance commission never used, so anyone quoting it is reading the wrong line. Recalculate before you renew, because the rule makes that your job, not the Department's.

Texas Finance Code section 158.055 requires an applicant for registration as a residential mortgage loan servicer to file a surety bond with the commissioner before the registration is approved, payable to the commissioner, in an amount not to exceed $200,000, with a lower ceiling of $25,000 for servicers of the limited property types described in the statute. The finance commission sets the operative amounts by rule. Under 7 TAC 58.107, the minimum is $25,000 for a new applicant and for a servicer whose Texas unpaid principal balance is $25 million or less, and $50,000 where that balance exceeds $25 million. The bond is filed electronically through NMLS on the current NMLS form.

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How to Apply for a Residential Mortgage Loan Servicer Bond:

• Pull the total unpaid principal balance of Texas secured residential mortgage loans you serviced as of October 31 of the preceding year. That figure sets the tier.
• Confirm you are not exempt from registration under section 158.052, and if you are a third party debt collector bonded under Chapter 392 that does not own the loans, check the bond exemption in 158.055.
• Legal entity name exactly as filed with the Texas Secretary of State. The principal insured name has to match it.
• Company financial statements and servicing portfolio detail for the surety's underwriting file.
• Owner, officer and control person information with consent to a credit review.
• Complete the bond application and review the quoted premium.
• Have a surety authorized to transact business in Texas issue the bond payable to the Commissioner as sole payee, on the current NMLS form.
• File the bond electronically through the NMLS electronic surety bond system. Paper bonds are no longer accepted.
• Recalculate the required amount before requesting renewal during the November 1 to December 31 renewal period, and renew by December 31.

Detailed Information About the Texas Residential Mortgage Loan Servicer Bond:

The schedule, and the date it is measured on

Rule 7 TAC 58.107 fixes the minimum bond by volume, calculated on the total unpaid principal balance of all residential mortgage loans serviced by the mortgage servicer secured by real property located in Texas as of October 31 of the preceding year:

• A new applicant, $25,000
• Texas unpaid principal balance of $25 million or less, $25,000
• Texas unpaid principal balance above $25 million, $50,000
• A servicer of unimproved property or foreclosed properties only, $25,000 regardless of volume

Two things about that measure catch people out. It is unpaid principal balance, not loan count and not servicing revenue. And it is Texas collateral only, so a national servicer measures the Texas slice of the book, not the whole portfolio.

The statute reads differently, which is where most of the confusion on this bond comes from. Section 158.055 authorizes a bond in an amount not to exceed $200,000, with a not to exceed $25,000 figure for the limited property category. Those are ceilings on the finance commission's rulemaking authority. The amounts you actually file are the ones in the rule.

The rule number changed

If you are working from older guidance, check the citation. The servicer bond requirement used to sit at 7 TAC 79.4. That section was repealed effective November 23, 2024, and the requirement now lives at 7 TAC 58.107, effective the same date, as part of SML's reorganization of the mortgage rules into Chapter 58.

Recalculating is on you

Section 58.107 requires the servicer to recalculate the minimum amount for the surety bond before requesting renewal of the registration during the annual renewal period, which runs November 1 to December 31. Nobody sends you a notice that you crossed $25 million.

That is why the October 31 measurement date matters. It sits one day before the renewal window opens, so the figure you need is the one from the day before you can start filing.

Paper bonds are done

Section 58.107 requires the surety bond to be submitted electronically through NMLS using the current form prescribed by NMLS. The Department began accepting electronic surety bonds on October 1, 2022 and made the electronic system mandatory as of January 1, 2026, with all residential mortgage loan servicer registrants required to have an electronic surety bond on file by that date. A paper bond is no longer a filing option, so the surety has to be set up in NMLS ESB before it can place your bond.

Payee and name matching

The bond must be payable to the Commissioner as the sole payee, and the principal insured's name must match the Texas Secretary of State filing exactly. The surety must be a company authorized to transact business in Texas and in compliance with the applicable requirements of the Insurance Code. A name that reflects an operating or trade name rather than the registered entity is a routine rejection.

Who does not register, and who does not bond

Two separate exemptions apply, and they are not the same list.

Section 158.052 exempts from registration a federal or state depository institution or a subsidiary or affiliate of one, a person registered under Chapter 157, a person licensed under Chapter 342 or regulated under Chapter 343 if the person does not service first lien loans, and a person making a residential mortgage loan with the person's own funds or to secure all or a portion of the purchase price of real property sold by that person. No registration means no bond.

Section 158.055 then exempts a registrant from the bond itself where the registrant collects delinquent consumer debts owed on residential mortgage loans, does not own the residential mortgage loans, and is a third party debt collector that has filed a bond in compliance with Chapter 392. That is the one path where a registered servicer files no bond under Chapter 158, and it exists because the Chapter 392 bond already covers the activity.

There is no grandfather clause for a servicer that was operating before the chapter took effect and no waiver for small portfolios beyond the $25,000 tier.

Fees and the renewal deadline

Section 158.053 sets the initial registration fee at an amount not to exceed $500 as determined by the finance commission, and section 158.058 sets the annual renewal fee on the same not to exceed $500 basis. Registration is renewed annually by December 31 to continue operating, on the November 1 to December 31 renewal cycle.

So three things happen in that same two month window every year: recompute the bond against the October 31 balance, adjust the bond if you crossed the threshold, and file the renewal. Treat them as one task.

Eligibility and Requirements for a Texas Residential Mortgage Loan Servicer Bond:

• A surety company authorized to transact business in Texas and in compliance with the applicable requirements of the Insurance Code.
• Bond amount of $25,000 or $50,000 under 7 TAC 58.107, depending on Texas unpaid principal balance as of October 31 of the preceding year.
• The Commissioner named as sole payee.
• Principal insured name matching the Texas Secretary of State filing exactly.
• Submitted electronically through NMLS on the current NMLS prescribed form.
• Filed before the registration is approved.
• Recalculated by the servicer before each annual renewal.
• Underwriting review of the company. At this class the surety looks at financials and servicing operations alongside owner credit.

Texas Residential Mortgage Loan Servicer Bond FAQs:

Official and Additional Resources for the Texas Residential Mortgage Loan Servicer Bond: