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Do Illinois Mortgage Brokers Need a Bond?

A

The State of Illinois Department of Financial and Professional Regulation, Division of Banking, Residential Mortgage Board, is tasked with the oversight of licensure of residential mortgage industry professionals which includes mortgage brokers, mortgage bankers, residential mortgage individuals and companies and mortgage loan originators.

The Illinois Residential Mortgage License Act of 1987 (RMLA) defines the licensing of residential mortgage loan companies and individuals, and mortgage loan originators.

Illinois Residential Mortgage Broker License requirements are as follows:

1. Complete education and pass the examination.
2. Complete the application through the NMLS system and pay the applicable filing fee, credit report fee, and FBI Criminal Background Check fee.
3. A credit report is required for each person of control for the business. If any credit report contains liens, a bankruptcy, or other negative credit remark, an explanation and/or proof of settlement is required.
4. FBI Criminal Background Check is required for any person of control (director, officer, partner, agent, employee, or a person having more than 10% ownership, or person that establishes policy or directs affairs).
5. Provide formation documentation for applicants that are partnerships, corporations, or limited liability companies.
6. Provide an audited financial statement prepared by a CPA, dated within 90 days of the business fiscal year end. Submitted financials must include a balance sheet, income statement, statement of cash flows and any relevant notes. The financial statement must reflect a minimum net worth of $50,000 for mortgage brokers with an office located in Illinois and a minimum net worth of $150,000 for mortgage brokers/bankers located outside of Illinois.
7. Obtain a Certificate of Authority or Good Standing from the Illinois Secretary of State no older than 60 days from the date of application.
8. Provide bank account information as well as letter and lines of credit, and trust primary accounts if applicable.
9. All control persons (direct owners and executive officers) for the business must submit employment history.
10. Indicate on the application any trade names or dba’s that will be used. Trade names or dba’s must be registered with the Illinois Secretary of State.
11. If applicant answers Yes to any of the Disclosure Questions, provide complete details and any applicable documents.
12. A $100,000 fidelity bond is a license requirement. Submit a copy of the policy with the application. The name on the policy must match the full legal name of the applicant.
13. A surety bond is needed for licensure and the bond amount is based on the below criteria:

Total Aggregate of Loans Surety Bond Amounts
$0 - $5,000,000 $25,000
$5,000,001 - $20,000,000 $50,000
$20,000,001 - $50,000,000 $75,000
$50,000,001 - $100,000,000 $100,000
Over $100,000,000 $150,000

How Much Will These Bonds Cost?

The premium that you pay for an Illinois Residential Mortgage Bond is dependent on credit and the bond amount required. Bond amounts exceeding $50,000 will require personal and/or business financial statements.

The premium that you pay for a fidelity bond is dependent on the number of employees covered and the number of years of coverage.

Did You Know?

Illinois residential mortgage licenses must be renewed annually by December 31.

Related Links:

License Renewal Information
NMLS Registration Portal
Information for Illinois Residential Mortgage Company Licensees
NMLS - Illinois Residential Mortgage License New Application Checklist

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