Michigan Mortgage Broker Bond

Summary

A Michigan mortgage broker bond is a type of surety bond that mortgage brokers in Michigan are required to obtain as a licensing requirement. The bond is designed to protect consumers from financial harm in case the mortgage broker engages in unethical or illegal activities, such as fraud, misrepresentation, or violation of state regulations. If a consumer is harmed by the broker's actions, they can make a claim against the bond to seek financial compensation. The bond amount varies depending on the broker's volume of business and other factors, and it must be obtained from a licensed surety bond provider.

What is an Michigan Mortgage Broker Bond? 

Michigan Mortgage Broker Bonds are required by Michigan's Department of Insurance and Finnancial Services to obtain your Mortgage Broker license. The Michigan Mortgage Broker Bond amount is set at $10,000. This license is required of any sole proprietor or entity that directly or indirectly serves or offers to serve as an agent for a person in an attempt to obtain a 1st mortgage loan, or offers to serve as an agent for a person who makes or offers to make 1st mortgage loans for residential property located in the State of Michigan.

The State requires a Mortgage Broker bond for :  

$10,000 - if the individual is currently licensed as a loan originator that did not close any mortgage loans in the preceding calendar year, or the sum of the principal amounts of mortgage loans closed by the mortgage loan originator in the preceding calendar year is less than $12,000,000.

$25,000 - if the sum of the principal amounts of mortgage loans closed by the licensed mortgage loan originator in the preceding calendar year is $12,000,000 or more and less than $24,000,000.

$50,000 - if the sum of the principal amounts of mortgage loans closed by the mortgage loan originator in the preceding calendar year is $24,000,000 or more.

Different parts of a bond:

 There are 3 parts to a Mortgage broker surety bond. The Principal "YOU", The Surety Company, and the Obligee. The Principal is the business or individual applying for the Mortgage Broker Surety Bond. The Obligee is the individual or entity requiring the Surety Bond and the Surety Company is the company who provides the Surety Bond coverage.

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Michigan Mortgage Broker Bond Information and Requirements:

$10,000 - if the individual is applying for a loan originator license for the first time.

$10,000 - if the individual is currently licensed as a loan originator that did not close any mortgage loans in the preceding calendar year, or the sum of the principal amounts of mortgage loans closed by the mortgage loan originator in the preceding calendar year is less than $12,000,000.

$25,000 - if the sum of the principal amounts of mortgage loans closed by the licensed mortgage loan originator in the preceding calendar year is $12,000,000 or more and less than $24,000,000.

$50,000 - if the sum of the principal amounts of mortgage loans closed by the mortgage loan originator in the preceding calendar year is $24,000,000 or more.