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What Is the Bond Requirement for a Maryland Mortgage Lender?

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Mortgage Lenders in Maryland are required to go through a licensing process, which includes securing a surety bond.

The State of Maryland (MD), Department of Labor, Office of the Commissioner of Financial Regulation, through the National Mortgage Licensing System (NMLS), is tasked with the licensing of mortgage lenders, mortgage brokers, mortgage servicers and mortgage loan originators.

The Code of Maryland Regulation Citation 09.03.06.09, defines the licensing of mortgage loan originators and mortgage lenders.

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 Criminal Background Check fee.
3. Provide a resume for each individual that includes job title, place of employment, employment dates, job description and duties (send this attachment directly to the state).
4. A credit report is required for each person of control for the business.
5. Provide an organizational chart indicating the structure of the company.
6. Provide formation documentation for applicants that are partnerships, corporations, or limited liability companies.
7. The Resident Agent or Registered Agent must match the name listed with the Maryland Department of Assessments and Taxation.
8. Provide an audited financial statement prepared by a Certified Public Accountant, 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. For lending agencies with security in the form of a dwelling or residential real estate, a minimum net worth is required for the following aggregate loans issued (in the prior 12 months): Under $1,000,000 = net worth of $25,000, $1,000,001 to $5,000,000 =net worth of $50,000, $5,000,001 to $10,000,000= net worth $100,000, more than $10,000,000 = net worth $250,000.
9. If minimum net worth has not been met through proof of financial statements, obtain a bank letter that states the account balance, how the funds are held that the funds are not encumbered or a letter of credit, or other assets and submit with the application.
10. Provide a Certificate of Authority or a Good Standing Certificate issued by the Maryland Department of Assessments and Taxation or from the state of domicile if applicable.
11. Indicate on the application any trade names or dba’s that will be used. Provide a copy of the trade name registration certificate from the Maryland Department of Assessments and Taxation.
12. List the qualifying individual of the business which can be a sole proprietor, general partner, member, etc. The qualifying individual must have a minimum three years of experience in the mortgage in industry.
13. Complete the Maryland Business Activity questions, and if applicable, the Explanation of Exemption Claimed. Submit these attachments directly to the state.
14. Provide a ownership information that includes: residential and business addresses; cell, residential and business phone numbers; email address; social security number and ownership share.
15. A surety bond is required based on the volume of loans for the past 12 months. The minimum bond amount is $50,000. Each branch location requires a separate bond and application.

Volume of Loans in the Past 12 Months Minimum Bond Amount
Under $3,000,000 $50,000
$3,000,000 - $10,000,000 $100,000
Over $10,000,000 $150,000

If applicant has five or more business branches/locations, the Commissioner of Financial Regulation can approve a blanket bond in the amount of $750,000.
16. To determine the bond amount, a Volume of Mortgage Business statement is required that declares the volume of mortgage business for the previous 12 months, mortgage lending business for the prior 36 months from date of application, aggregate of loans secured in Maryland and in any other state for the prior 12 months preceding the month of application.

How Much Will This Bond Cost?

The premium that you pay for a Maryland a Mortgage Lender Bond is dependent on credit and the bond amount. For bond amounts over $50,000, personal and business financial statements will be required.

Did You Know?

The State of Maryland requires mortgage lender licenses to be renewed by December 31 of each year.

Related Links:

NMLS Registration Portal
Maryland Mortgage Lenders, Brokers and/or Services - Quick Links
NMLS - Maryland Mortgage Lender License - New Application Requirements
Read our blog, "Maryland Mortgage Lenders and Mortgage Brokers"



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