Surety Bond Encyclopedia

Mortgage Broker (NMLS) Bond - Statewide in Virginia

Brief Summary

A Virginia mortgage broker starts at a $25,000 bond, but the figure is not fixed. It is reset every year from the loans you originated the year before, and it climbs to $150,000 for the busiest shops. Getting the tier right at renewal keeps your license file clean with the Bureau of Financial Institutions.

Virginia requires every licensed mortgage broker to file a surety bond with the Commissioner of Financial Institutions under Va. Code 6.2-1604. The broker minimum is $25,000. Under 10VAC5-160-15 the amount is adjusted annually from residential mortgage loans originated in the preceding calendar year, up to $150,000. A company licensed as both broker and lender starts at $50,000.

We can help with all Virginia bonds!

How to Apply for a Mortgage Broker (NMLS) Bond:

Pull last calendar year's residential mortgage loan originations and match them to the 10VAC5-160-15 scale.
Apply for the bond in the exact legal name and NMLS ID used on the license filing.
Owner and principal information for the surety's credit and financial review.
Pay the $500 broker application fee plus $150 for each office location (Va. Code 6.2-1603). Fees are not refundable.
File the executed bond with the Commissioner as part of the application.
Renew on or after November 1. Licenses expire at the end of each calendar year (10VAC5-160-90).

Detailed Information About the Virginia Mortgage Broker (NMLS) Bond:

The amount moves with your volume

Va. Code 6.2-1604 sets a $25,000 bond, or a greater sum the Commissioner requires. The Commissioner's rule, 10VAC5-160-15, supplies that greater sum. The bond is adjusted annually based on residential mortgage loans originated during the preceding calendar year:

$0 to $5,000,000: $25,000
$5,000,001 to $20,000,000: $50,000
$20,000,001 to $50,000,000: $75,000
$50,000,001 to $100,000,000: $100,000
Over $100,000,000: $150,000

The $25,000 floor applies only to a broker license. A company holding dual authority as both mortgage lender and mortgage broker has a $50,000 minimum no matter how little it originated.

What the bond promises

The bond is conditioned on the broker performing all written agreements with borrowers and prospective borrowers, accurately accounting for all funds received in the licensed business, and following Chapter 16 and all applicable law. Anyone damaged by a breach of those conditions can sue the broker, the surety, or both. The surety's total liability stops at the penal sum. The form of the bond is approved by the Commission, and it must be written by a corporate surety authorized in Virginia.

It outlives the license

Under 10VAC5-160-15 B, the Commissioner keeps the bond even if the application is withdrawn or denied, the license is surrendered, suspended or revoked, or the company stops doing business. Keep it in force until the Bureau releases it.

Who does not need a broker license

Va. Code 6.2-1602 exempts, among others, banks, savings institutions and credit unions, insurance companies, and attorneys and real estate licensees who are not actively and principally engaged in negotiating, placing or finding mortgage loans.

Eligibility and Requirements for a Virginia Mortgage Broker (NMLS) Bond:

Corporate surety authorized to write bonds in Virginia.
Bond on a form approved by the State Corporation Commission.
Minimum $25,000 for a broker only license, $50,000 for dual lender and broker authority.
Bond adjusted every year to the volume scale in 10VAC5-160-15.
Bond kept continuously in force for as long as the license exists.

Virginia Mortgage Broker (NMLS) Bond FAQs:

Is the broker bond always $25,000?

No. $25,000 is the floor. 10VAC5-160-15 raises it each year based on residential mortgage loans originated in the preceding calendar year. Above $5,000,000 in originations the broker moves to $50,000, and the top tier is $150,000 for more than $100,000,000.

We broker and also close some loans in our own name. Which minimum applies?

A company with dual authority as both mortgage lender and mortgage broker has a $50,000 minimum under 10VAC5-160-15, even in a low volume year. The volume scale can still push it higher.

Can I cancel the bond once I give up my license?

Not on your own timing. The Commissioner retains the bond after a withdrawal, denial, surrender, suspension, revocation or cessation of business. Ask the Bureau of Financial Institutions before letting it lapse.

Who can make a claim on the bond?

Any person damaged because the broker failed to perform a written agreement with a borrower, failed to account for funds, or broke Chapter 16 or other applicable law. Claims can be brought against the broker, the surety, or both, up to the penal sum.

What does the bond cost?

You pay an annual premium, not the face amount. The surety prices it from the owners' credit, the company's finances and its lending history, and the bond amount for your tier.