New Mexico Mortgage Loan Bond

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Who is Required To Purchase a New Mexico Mortgage Broker Bond?

The New Mexico Regulation And Licensing Department issues two mortgage related licenses:

• Individual mortgage originator licenses
• Mortgage company licenses

If you're an individual mortgage originator, you are not required to purchase a surety bond. You will be covered by your employing company's surety bond.

However, if you're an individual but you own a company, you will have to purchase a surety bond as a mortgage company.

All licensed mortgage companies are required to purchase a surety bond based on the loan volume handled in the previous 12 months.

Here are the bond amounts and loan volume breakdown:

Just to be clear, these bond amounts are set by the Licensing Department. They are written into New Mexico law.

The bond amount itself is set as the maximum amount of financial compensation available to a customer from any financial harm done through a violation of licensing laws.

Why is a New Mexico Mortgage Loan Bond Required?

Again, the purpose of this surety bond is to hold you accountable to the laws and regulations for being a licensed mortgage professional in New Mexico.

It's the state's only method of mortgage fraud prevention.

The entire licensing process was created as a minimum set of requirements in order to legally run a mortgage business in the state.

The New Mexico Regulation and Licensing Department wants to identify the businesses that have the best chance of successfully operating a business in the state and serving the public.

And yet, every year there will be a small number of licensed mortgage professionals who will purposefully and financially harm their customers so they can save or make more money.

Examples of these fraudulent actions can include:

• Approving a borrower for a loan they can't afford
• Helping a borrower get approved for a loan by providing false information
• Hindering a borrower from getting approved by providing false information
• Pressing a borrower to enter a high commission loan to make more money
• Creating and charging fabricated fees
• Stealing money from escrow accounts

If a customer is harmed by a mortgage business they can make a claim against the company's surety bond for financial compensation. If the claim is deemed valid, the compensation is capped by the bond amount you're required to have at that time.

The bond amount is also important because it will impact the price you'll pay for your surety bond.

How Much Does a New Mexico Mortgage Surety Bond Cost?

Mortgage surety bonds are priced by a surety. A surety is a specialized insurance company that chooses to underwrite mortgage license surety bonds.

All New Mexico mortgage license bonds are going to be priced based the following three factors:

• The personal credit of the business owner or owners
• Mortgage and all financial lending experience
• Prior bond claims if any owner has been licensed in the past

From these factors the surety will determine a rate and this rate multiplied by your bond amount is the price you're going to pay.

This price will be one payment for your bond term, which in New Mexico is 12 months from the bond's active date, a date you choose when you purchase your bond.

Prices for mortgage surety bonds can get expensive, but you can save hundreds, even thousands of dollars by using a surety agency like Surety Bonds Direct.

How Save Save Money Buying Your New Mexico Mortgage Surety Bond

We are Surety Bonds Direct, a specialized surety agency, and we'll help you purchase a mortgage license surety bond and pay considerably less for it.

We're able to find you the lowest price because of our network of A-rated sureties.

We use this network to price shop for our customers. Every surety is unique in the risk and price they determine because each surety has their own risk tolerance.

By price shopping we consistently find pricing that is hundreds, even thousands less (one to three percentage points different) than the nearest sureties pricing.

Here is example pricing so you can see how the price changes drastically based on the rate.

Pay close attention to how one to three percentage points difference changes the price you'll pay.

Let's use the minimum $50,000 bond amount for this example. The rates used in the table are from really good to average.

Just imagine the pricing difference if you have a higher bond amount.

Having Us Price Shop For You Costs Nothing Extra

When you request your pricing with us, we'll find you the lowest possible price at no cost to you. And you have no obligation to purchase either. We just want the opportunity to earn your business.

And all quotes are guaranteed for 30 days so there is no rush or pressure if you're not ready to purchase.

Go request your price quote today. Remember, this is free information for you. There's no obligation to purchase.

If you prefer to speak with a bond specialist, you can call 1-800-608-9950.

What Do You Do After You Purchase Your Mortgage Surety Bond?

When you're ready to purchase, all you have to do is complete an online order form or purchase over the phone.

There are two important things to make sure of when you purchase:

• One, make sure the business name you use is the exact name that's on file with the Secretary of State (typically this will include all DBAs as well)
• Two, choose a start date when your bond becomes active

After your payment is complete, our bond issuance team will get to work preparing your bond with the:

• Correct bond form (this is critical)
• Required signatures and seals
• Power of attorney to make it legal

Mortgage bonds are e-filed with the National Multi-State Licensing Agency (NMLS) and we'll help make sure you bond gets e-filed correctly.

How Do You Keep Your New Mexico Mortgage Broker Bond Active?

As long as you're in business, you have to have an active mortgage surety bond on file that will cover your level of mortgage activity.

Remember, we said when you purchase your bond, it's one payment for a bond term, or 12 months.

As your 12 month term approaches the end, you'll have to renew your bond for the following year. During this renewal process is when you can manage your bond amount and increase or decrease it as necessary.

Renewing your bond is easy.

As a Surety Bonds Direct customer, you're assigned your own bond specialist to manage your bond for you.

As your renewal date approaches, your bond specialist will contact you to remind you of the expiration date and help you adjust your bond if needed.

Can You Get Your Mortgage License In Other States?

It's very common for mortgage businesses to get licensed in neighboring states. We regularly help mortgage professions in New Mexico also get their mortgage license bond in:

• Texas mortgage broker bond
• Arizona mortgage broker bond
• Colorado mortgage broker bond
• Oklahoma mortgage broker bond

Mortgage Loan Bonds And Getting Your New Mexico Business License/Registration

Here are the high level steps so you know what to expect.

Use the NMLS Checklist Compiler to help with the details of each step.

Submit Your Financial Statements

You must submit a financial statements, including:

• Balance sheet
• Income statement
• Statement of cash flow

This must be prepared in accordance to GAAP so you will need to have a CPA or relevant software prepare these statements.

Criminal Background Checks

A criminal background check will be required for any owner with a 10% or greater position in the business. The Qualifying individual and all control persons in the business will also have to have a background check completed.

Credit Check

A credit report must be completed for all owners (10% or more) and the same qualifying individual and control persons. This is to show financial stability.

Business Formation Documents

You will have to provide your business formation filings

This includes making sure all trade names or "doing business as" names are registered and outlined here as well. You will need to provide a written statement for each trade name as to the reason why it exists and how you'll use it.

Flow Of Funds Structure

You must describe each type of transaction or service you intend to conduct. You need to describe the flow starting from when you encounter a customer to when the last financial transaction is made.

Appoint Registered Agent

You need to appoint a registered agent. This is the individual who helps to manage the office.

Appoint the Qualified Individual

You must have a qualified individual, the person who oversees the mortgage company's operations and who is responsible for managing all the loan activities.

You must highlight the experience of this individual including:

• Detailed job descriptions and duties from the past
• Verifiable proof of at least 2 years of experience as a principal, partner, officer, director, manager, or underwriter of a mortgage company
• Getting licensed as a mortgage loan originator

Finally this individual must upload their own financial documentation including two consecutive years of W-2s and 2 years or personal tax returns.

Go request your price quote today. Remember, this is free information for you. There's no obligation to purchase. Quotes are good for 30 days.

If you prefer to speak with a bond specialist, you can call 1-800-608-9950.