Surety Bond Professionals is a family-owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your Oregon mortgage broker bond needs. Learn how to become a mortgage broker in Oregon, below.
What Mortgage Broker Licenses Are Issued in Oregon?
Oregon defines mortgage brokers as “those who make or negotiate mortgage loans.” Mortgage brokers are licensed by the Division of Finance & Corporate Securities of the Oregon Department of Consumer & Business Services (DCBS). Mortgage broker license applications are processed through the Nationwide Mortgage Licensing System, or NMLS.
What Are the Steps in the Licensing Process?
Certain financial, educational, and experiential requirements must be met before applying for licensure as a mortgage broker in Oregon. Once those are met, the licensing process for a company offering mortgage brokerage services involves:
- Applying for an NMLS account and ID number.
- Submitting a license application as a company or sole proprietor.
- Uploading a completed Notice of Client’s Trust account or completed Affidavit and Undertaking – No Clients’ Trust Account, depending on whether or not you will be accepting refundable funds from clients prior to the close of escrow.
- Submitting a $50,000 surety bond. For subsequent license renewals, the bond amount will depend on the previous year’s loan volume.
- Submit a criminal background check, if required.
- Pay the required application, background check, and NMLS processing fees.
Why is a Mortgage Broker Bond Required?
An Oregon mortgage broker bond serves these important purposes:
- It guarantees a mortgage broker’s compliance with all applicable state laws and regulations.
- It indemnifies the state of Oregon against liability for claims filed against the bond.
- It ensures the payment of damages to those filing a claim against the bond to recover a loss resulting from the mortgage broker’s unlawful or unethical actions.
The bond must remain in force at all times to avoid license suspension or revocation.
How Are Mortgage Broker Bond Claims Paid?
An Oregon mortgage broker bond is a legally binding contract between these three parties:
- The Oregon DCBS is the “obligee” requiring the bond
- The mortgage broker is the “principal” required to purchase the bond
- The surety company is the “surety” underwriting and authorizing the bond
Under the terms of the surety bond agreement, the principal is legally obligated to pay all valid claims. However, in practice, the surety typically pays a valid claim on behalf of the principal, creating a debt that the surety must subsequently repay to the surety.
How Much Does an Oregon Mortgage Broker Bond Cost?
Oregon mortgage broker bonds are sold on a premium basis, with an annual premium that is a small percentage of the required amount of the bond. Because the surety’s main concern is being repaid for claims paid out on behalf of the principal, the primary underwriting consideration is the principal’s personal credit score.
If your credit is good, you’ll most likely be assigned a premium rate in the range of 1% to 3%.
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Our surety bond professionals will get you the Oregon mortgage broker bond you need at a competitive rate.