Kentucky Mortgage Broker Bond

The Kentucky Department of Financial Institutions is responsible for monitoring license compliance for mortgage brokers, individual originators and loan companies in the state. The licensing regulations are established by the Kentucky Mortgage Loan Company and Loan Broker Act, or Revised Statutes Chapter 286.

This surety bond is an agreement between three parties: 

• Principal: The mortgage broker, individual originator or loan company that needs to get the bond.
• Obligee: The entity requiring the principal to get bonded.
• Surety: The company that issues the bond.

A surety bond ensures that anyone negatively affected by unethical behavior by a mortgage broker, individual originator or loan company can be fairly compensated. The surety receives and researches all claims to determine if they are valid. It pays the claimant on valid claims, and the principal must then reimburse the surety for the full sum. 

The best strategy for avoiding claims against the bond is to follow the state’s regulations, according to our valued customers.

A Kentucky mortgage broker bond typically costs between $500 and $5,000 for the required $50,000 bond. For individual originators, costs range from $150 to $2,000, depending on the bond amount, which is set at $15,000 or $20,000 based on last year’s loan volume. Loan companies can expect bond costs between $2,500 and $25,000, with a required bond amount of $250,000.

The bond rate is typically between 1% and 10% of the total bond amount required. Often, this is referred to as the bond premium or the cost of the bond. Use this chart to estimate your bond cost before applying. 

From time to time, our customers ask about the factors impacting how much a bond costs. We review the applicant’s finances, credit scores, industry experience and bond history to determine the bond rate.

1. Apply For Your Bond

Obtaining a Kentucky mortgage broker bond, individual originator bond or loan company bond is an easy, three-step process. The first step is to apply for your bond using one of our two convenient methods. 

1. Apply for a bond online – You can access our online application 24/7. The application is brief, and many of our customers can submit the form within a few minutes.  
2. Call us at (888) 592-6631 – When you call our friendly bond experts we can answer your questions and take your application over the phone.   

When applying, you will need:

• Bond name (Mortgage Broker License Surety Bond, Surety Bond for Individual Mortgage Originator or Surety Bond for Mortgage Loan Company) 
• Bond amount ($15,000 to $250,000)
• Email and contact information

2. Get a Quote

Our customers appreciate receiving a fast bond quote from us by email. We will happily review the quote with you upon request. If you identify any areas that require a revision during your review, please let us know.

3. Purchase Your Bond

You can conveniently pay the invoice and sign the documents online. After completing these steps, you will receive the original bond via email.

When applying for a Kentucky mortgage broker license, an individual originator license or a loan company license, an electronic surety bond must be submitted through the NMLS. The Kentucky Department of Financial Institutions is the authority on licensing and compliance. 

To comply with licensing regulations enforced by the Kentucky Department of Financial Institutions, you must submit the appropriate bond form. These are the Mortgage Broker License Surety Bond, the Surety Bond for Individual Mortgage Originator or the Surety Bond for Mortgage Loan Company. Each of these bonds runs continuously until canceled. To cancel the bond, the surety must provide the principal and the obligee with a 30-day notice in writing. 

If you have any questions regarding required bond amount, the definition and role of mortgage brokers, individual originators and loan companies in Kentucky, etc., please contact us. 

Recently, a new customer who needed a mortgage broker bond contacted us about the Kentucky bond requirements and the cost. Our bond experts answered his questions and took his application over the phone for his convenience. Not long after, he received his bond quote from us. He appreciated our excellent customer service and speedy response.

The licensing process for Kentucky mortgage brokers, individual originators and loan companies is completed via the Nationwide Mortgage License System. To apply for a new license, you must submit the following items:

• Application
• Surety bond
• Credit report
• Criminal background check
• Disclosure questions

Additional documents needed for a mortgage broker or loan company license:

• Resident/registered agent
• Qualifying individual
• Financial statements
• Certificate of Authority/Good Standing
• Formation documents
• Organizational chart
• Prior activity attestation
• Contact employees
• Verification of experience
• Managing principal
• Residential location documents, if applicable
• Sponsored mortgage loan originators
• Management chart

Additional documents needed for an originator license are: 

• Completion of education requirements
• Company sponsorship
• Employment history
• Individual form

Nationwide Mortgage Licensing System. (n.d.). Checklist compiler. https://mortgage.nationwidelicensingsystem.org/slr/SitePages/Checklist-Compiler.aspx

Nationwide Multistate Licensing System & Registry. (n.d.). Surety bond mortgage broker license. https://mortgage.nationwidelicensingsystem.org/slr/StateForms/KY%20ESB%20V1.%20SuretyBondforMortgageLoanBroker.pdf

Kentucky Department of Financial Institutions. (n.d.). Surety bond for mortgage loan originator. https://kfi.ky.gov/Documents/ML-4SuretyBondforMortgageLoanOriginator.pdf

Kentucky Department of Financial Institutions. (n.d.). Surety bond for mortgage loan company. https://kfi.ky.gov/Documents/ML-1SuretyBondforMortgageLoanCompany.pdf

Kentucky General Assembly. (n.d.). Kentucky Revised Statutes Chapter 286. https://apps.legislature.ky.gov/law/statutes/chapter.aspx?id=38641

Kentucky Department of Financial Institutions. (n.d.). Home page.
https://kfi.ky.gov