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Who is Required To Purchase a South Carolina Mortgage Broker Bond?
All mortgage professionals are required to purchase a surety bond:
- Mortgage lenders
- Mortgage brokers
Just to recap, a mortgage lender is responsible for providing the loan and in many cases servicing the loan if they keep it on their books. A lender can elect to act as a broker.
A mortgage broker, also called a mortgage originator, is responsible for helping consumers find the best mortgage product to meet their qualifications and requirements.
Again, both of these license classifications are required to purchase a mortgage broker bond.
Why is a South Carolina Mortgage Broker Bond Required?
The South Carolina Office of Commissioner of Consumer Finance is responsible for the licensing guidelines for mortgage lenders.
The South Carolina Department of Consumer Affairs is responsible for the licensing guidelines for mortgage brokers.
The licensing process is a set of standards and regulations you're committing yourself and your business to follow. Plus you must be licensed to legally conduct business in South Carolina.
And despite this licensing process, every year there will be a handful of mortgage professional who purposefully:
- Approve a borrower for a loan they can't afford
- Help a borrower get approved for a loan by providing false information
- Hinder a borrower from getting approved by providing false information
- Press a borrower to enter a high commission loan to make more money
- Create and charge fabricated fees
If a mortgage lender or broker is found guilty of these acts or similar, the customer can make a claim against the mortgage bond for financial compensation. The total compensation available only extends to the amount of the bond.
What Are The South Carolina Mortgage Broker and Lender Bond Amounts?
Mortgage Brokers
Mortgage brokers (or originators) have a bond amount starting at $25,000 per individual. This is the minimum.
This bond amount can change based on the dollar volume of mortgage loans being written:
| Mortgage Dollar Amount | Bond Amount |
|---|---|
| $0 to $49,999,999 | $25,000 |
| $50,000,000 to $99,999,999 | $40,000 |
| Amounts greater than $100,000,000 | $55,000 |
In South Carolina, it's the responsibility of the mortgage broker employer/company to purchase a surety bond to cover the volume for the business.
The individual mortgage brokers in your company all need to be licensed, but they do not purchase an individual bond.
Mortgage Lenders
Mortgage lenders have a bond amount starting at $50,000 per office location.
Like the mortgage broker, this bond amount will change based on the dollar volume of mortgages created:
| Mortgage Dollar Amount | Bond Amount |
|---|---|
| $0 to $49,999,999 | $50,000 |
| $50,000,000 to $249,999,999 | $100,000 |
| Amounts greater than $250,000,000 | $150,000 |
Remember this bond amount is the maximum amount of financial coverage available to your customers. The bond amount will affect the price to purchase the bond.
How Much Does a South Carolina Mortgage Broker Bond Cost?
The price of a mortgage broker bond and mortgage lender bond is determined by a rate, quoted from a surety.
A surety is an insurance company who chooses to underwrite mortgage broker bonds. Every surety is different and conducts their own independent analysis based factors such as:
- Personal credit of the individual or business owner
- Mortgage and lending experience
- Prior bond claims if the individual or owner has been licensed in the past
CALLOUT - This rate multiplied by your bond amount is the price you pay.
This is why using a specialized surety agency like Surety Bonds Direct is so valuable. We price shop for you, find the lowest possible price, and help you purchase your surety bond.
It costs you nothing to have us price shop for you and once you get your pricing, you're under no obligation to purchase. Obtaining pricing is free information.
There's no reason to request your free quote right now or call a bond specialist at 1-800-608-9950.
Mortgage Broker and Lender Price Examples
Let's look at the $25,000 bond amount for mortgage brokers.
Pay attention to the rates and how one percentage point can make huge difference in the price.
| Bond Amount | Premium Rate | Total Cost |
|---|---|---|
| $25,000 | 0.08% | $200 |
| $25,000 | 1% | $250 |
| $25,000 | 1.5% | $375 |
| $25,000 | 2% | $500 |
| $25,000 | 3% | $750 |
Example pricing is great, but you can get your exact price with no risk or obligation to purchase within one business day.
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.
Request a FREE Price Quote Today
Let us price shop for you and find the lowest possible price. This costs you nothing and there's no obligation to buy once you get pricing.
Need Help? Call Us Today
Talk to a bond specialist today. They will help you find the surety bond you need and get you the lowest possible price. 1-800-608-9950
How To File Your Mortgage Broker or Lender Bond?
After you agree to a price, purchasing your bond is as easy as completing an online checkout form.
Once your payment is processed, our issuance team will immediately begin the process to issue your bond with the National Multi-State Licensing System.
We provide you with detailed instructions to help us file your bond. The process takes only a few minutes.
How Long Does a South Carolina Mortgage Broker Bond Last?
Both the South Carolina Office of the Commissioner of Consumer Finance and Department of Consumer Affairs require an active surety bond on file with the NMLS (National Multi-State Licensing System) to legally conduct business in South Carolina.
Every mortgage broker and lender bond has a bond term or 12 months from the effective date.
The effective date is a date you choose when you purchase your bond. This is the "activation" date of your bond.
12 months from this date, your bond will have to be renewed.
How Do You Renew a Mortgage Broker and Lender Bond?
Renewing a mortgage broker and lender bond is easy. As your bond expiration date approaches, your bond specialist will contact you 30 to 45 days in advance to ensure you don't miss paying the renewal premium.
Your bond specialist will have renewal pricing already quoted allowing this process to get finished with little headache or effort.
Once you pay the renewal premium, your bond remains active. You don't have to do anything.
Mortgage Broker Bonds And Getting Your South Carolina Business License/Registration
Mortgage Brokers and Originators
Getting licensed as a broker is a straightforward process consisting of:
- A state criminal background check through the NMLS
- Providing a copy of the appropriate forms including the Mortgage Fee Agreement, Privacy Policy Notice, Attorney and Insurance Preference
- Providing a personal financial statement using the appropriate forms
- Purchasing the appropriate mortgage broker surety bond
- Agree to state laws like the Mortgage Advertising Standards and Guidelines and the prohibition of referral fees
Mortgage Lenders
Getting licensed as a mortgage lender consists of the following steps:
- A state criminal background check through NMLS
- A financial condition report including, credit history and business history
- Pay a $1,000 licensing fee
- Purchase the required surety bond
Identify a qualifying individual who meets the following requirements:
- Provide proof of at least three years of experience in financial services or a financial services related business
- The three year experience requirement can be waived if you have three years work experience with a Federally insured depository institution
Every branch office is considered independent and must obtain a separate licensing following the above steps.
Once you obtain your lender license, you can notify the commissioner and act as a broker. If you do, you do not have to obtain a separate broker license.
Additional South Carolina Mortgage Broker Bond Resources & Links
Contact South Carolina Department of Consumer Affairs licensing staff by phone at 803-734-4200 or send your questions via e-mail to SCMortgageBroker@scconsumer.gov for additional assistance.
The state of South Carolina has two Mortgage Agencies:
The South Carolina Board of Financial Institutions regulates Mortgage Lender/Servicers and Mortgage Loan Originators.
South Carolina Department of Consumer Affairs regulates Mortgage Brokers and Mortgage Broker Loan Originators.