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Texas Mortgage Broker or Loan Servicer Bond

Texas Mortgage Broker or Loan Servicer Bond

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Who Requires the Mortgage Broker or Loan Servicer Bond and Why Is It Needed?

A mortgage broker surety bond or mortgage loan servicer bond is required in Texas by the Texas Department of Savings and Mortgage Lending. The bond typically has a coverage amount or limit of $25,000 or $50,000 based on servicing volume. The surety bond is needed to satisfy the state licensing requirements for mortgage servicers and brokers operating in the state of Texas. The mortgage bonds ensure that the bonded principal will duly and fully comply with all regulations, rules, and orders and timely discharge all obligations arising under the Act. Nationwide minimum standards for mortgage broker licenses were developed in 2008 and adopted in each state including Texas. As a result, in order to obtain a mortgage broker or servicer license, applicants must first register with The Nationwide Mortgage Licensing System (NMLS) and meet certain requirements. Surety Bonds Direct will file your mortgage surety bond electronically with the NMLS.

How Much Will My Surety Bond Cost?

Take 2 minutes to provide the basic information required to get the best rates for your Texas Mortgage Broker or Loan Servicer Bond. The quote request is free and there is no obligation to you. If you prefer, please call 1‐800‐608‐9950 to speak with one of our friendly bond experts. We can help guide you through the bonding process and identify the lowest cost in the market for your situation.

If you are interested in spreading out the cost of your bond over time, we can offer convenient financing plans for many types of surety bonds. More information will be provided with your quote.

What Does the Bond Protect Against?

A mortgage broker bond protects Texas consumers from violations of the Texas Mortgage Broker License Act committed by the broker.  In the event of non-compliance with the Act, a consumer may file a claim against the bond seeking reimbursement for damages incurred.

Key provisions of this bond include protections related to breach of contract, fraudulent licensing practices, discrimination, improper accounting, and deceitful advertising materials. 

What is Needed to Obtain My License or Registration?

Texas Residential Mortgage Loan Servicers must have be registered to legally conduct business in the state. The state of Texas defines a Residential Mortgage Loan Servicer as any person/entity who:

  • Receives scheduled payments from a borrower under the terms of a residential mortgage loan, including amounts for escrow accounts; and
  • Makes the payments of principal and interest to the owner of the loan or other third party and makes any other payments with respect to the amounts received from the borrower as may be required under the terms of the servicing loan document or servicing contract.

Pre-requisites for registration application include furnishing a surety bond in the amount of $25,000 for servicing volume of <$25,000,000, or $50,000 for servicing volume of >$25,000,000.

Registration is not required for state or federal depository institution, those registered under Chapter 157 and those who have properly notified the Department of its servicing activities, if licensed under Chapter 342 or regulated by Chapter 343, if the entity does not act as a residential mortgage loan servicer servicing first lien secured loans, or those making a residential mortgage loan with the person’s own funds, or to secure all or a portion of the purchase price of real property sold by that entity.

List of Texas surety bonds.

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