Louisiana Mortgage Broker or Lender Bond

The Louisiana Office of Financial Institutions is the responsible authority on licensing for mortgage brokers, originators, lenders and servicers. The Louisiana Residential S.A.F.E. Mortgage Lending Act establishes these licensing requirements. A condition of licensing is a surety bond.

This surety bond is an agreement between three parties: 

• Principal: The mortgage broker, originator or lender 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 acts as financial assurance that those affected by unethical actions of the mortgage broker, originator or lender will be fairly compensated. The surety company is responsible for paying the claimant on a validated claim. The principal, however, must reimburse the surety in full.

Complying with the state’s regulations and rules is the best strategy for avoiding claims against the bond.

The cost of a Louisiana mortgage broker bond is between $250 to $5,000. This is based on the required bond amount of $25,000 or $50,000, depending on the previous year’s loan volume. The bond requirements and costs for a mortgage originator or lender are the same as for a mortgage broker. 

The bond premium is typically between 1% and 10% of the total bond amount required. This is also called the cost of the bond or the bond rate. This chart will help you estimate the cost of your bond before applying.

From time to time our customers ask about the factors that affect how much a bond costs. The applicant’s credit scores are a major factor that we review. In addition, we consider the applicant’s finances, bond history and industry experience.

1. Apply For Your Bond

Obtaining a Louisiana mortgage broker, originator, or lender bond is easy and involves just three simple steps. First, select your application method from two convenient options.

1. Apply for a bond online – Use our online application at any hour of the day. Our customers appreciate how quick and easy our application is to complete. In fact, many customers only spend a few minutes completing the form. 
2. Call us at (888) 592-6631 – If you prefer to apply directly through one of our bond specialists, we are happy to help. 

When applying, you will need:

• Bond name (Residential Mortgage Lender Surety Bond)
• Bond amount ($25,000 to $50,000)
• Email and contact information

2. Get a Quote

Your bond quote will be delivered by email immediately. Please let us know if you identify anything that needs to be revised. Our trusted bond experts are standing by to answer your questions about the quote.

3. Purchase Your Bond

Our customers enjoy the ability to quickly sign the bond documents and pay the invoice online. After taking these steps, you will receive the original bond in your inbox without delay.

When applying for a Louisiana mortgage broker license or a license for an originator or lender, surety bond must be submitted through the NMLS. The Louisiana Office of Financial Institutions enforces licensing requirements, while the NMLS handles application processing. To comply with these requirements, you must submit the appropriate bond form.

Mortgage brokers, lenders and originators all use the same form, and this is the Residential Mortgage Lending Surety Bond. The bond is continuous, and it remains in effect until the surety cancels it. The surety is required to provide the principal and obligee with a 30-day written cancellation notice. 

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

One of our new customers needed to apply for a mortgage broker surety bond in Louisiana recently. Because she had a few questions before applying, she reached out to our friendly bond experts and quickly got the answers she needed. At that same time, she applied directly with us over the phone and got an immediate bond quote. 

The licensing process for Louisiana mortgage brokers, originators and lenders is completed via the Nationwide Mortgage License System. To apply for a new license, you must provide the following items:

• Application
• Surety bond
• Mortgage loan origination agreement, for brokers
• FBI criminal background check
• Organization chart
• Line of credit, for lenders
• Certificate of corporate resolution
• Employer coverage affidavit, for originators
• Wholesale lender statement, if applicable for lenders
• Business plan
• Unlicensed activity statement
• Financial responsibility
• Credit report

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

Office of Financial Institutions. (n.d.).
https://ofi.la.gov/

Nationwide Multistate Licensing System & Registry. (n.d.). Louisiana residential mortgage lending license - ESB company new application checklist. https://mortgage.nationwidelicensingsystem.org/slr/StateForms/LA_Residential%20Mortgage%20Lending%20License%20ESB_v1.pdf

Louisiana State Legislature. (n.d.). Louisiana Revised Statutes.
https://www.legis.la.gov/legis/Law.aspx?d=105688