New Hampshire Mortgage Broker Bond: A Comprehensive Guide
July 23, 2021
This guide provides information for insurance agents to help their customers obtain New Hampshire Mortgage Broker Bonds
At a Glance:
- Average Cost: Between $375 to $2,500 per year based on the applicant’s credit
- Bond Amount: Minimum of $50,000 (more on this later)
- Who Needs it: All mortgage brokers operating in New Hampshire
- Purpose: To ensure the public will receive compensation for any damages should the mortgage broker violate licensing law
- Who Regulates Mortgage Brokers in New Hampshire: The New Hampshire Banking Department
Background
New Hampshire statute 397-A:3 requires all mortgage brokers operating in the state to obtain a license with the Banking Department. The New Hampshire legislature enacted the licensing laws and regulations to ensure that mortgage brokers engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, mortgage brokers must purchase and maintain a surety bond to be eligible for licensure.
What is the Purpose of the New Hampshire Mortgage Broker Bond?
New Hampshire requires mortgage brokers to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that the public will receive compensation for financial harm if the mortgage broker fails to comply with the regulations set forth in New Hampshire statutes 397-A. Specifically, the bond protects the public in the event the mortgage broker engages in any acts of fraud or breaches any contracts made with consumers. In short, the bond is a type of insurance that protects the public if the mortgage broker breaks licensing laws.
How Can an Insurance Agent Obtain a New Hampshire Mortgage Broker Bond?
BondExchange makes obtaining a New Hampshire Mortgage Banker Bond easy. Simply login to your account and use our keyword search to find the “mortgage” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
How is the Bond Amount Determined?
New Hampshire statute397-A:5 dictates that the limit on the New Hampshire Mortgage Broker bond must be a minimum of $50,000. The Department of Banks may increase the bond limit to an amount that reflects the total dollar amount of mortgage loans originated by the broker.
Is a Credit Check Required for the New Hampshire Mortgage Broker Bond?
Surety companies will run a credit check on the owners of the mortgage company to determine eligibility and pricing for the New Hampshire Mortgage Broker bond. Owners with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.
How Much Does the New Hampshire Mortgage Broker Bond Cost?
The New Hampshire Mortgage Broker Bond can cost anywhere between $375 to $2,500 per year. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on the $50,000 bond requirement.
$50,000 Mortgage Broker Bond Cost
| Credit Score | Bond Cost (1 year) |
|---|---|
| 700+ | $375 |
| 650 – 699 | $500 |
| 625 – 649 | $625 |
| 600 – 624 | $750 |
| 550 – 599 | $2,000 |
| 500 – 549 | $2,500 |
How Does New Hampshire Define “Mortgage Broker?”
New Hampshire statute 397-A:1 defines a mortgage broker as any business entity who provides one or more of the following services:
- Acts as an intermediary a lender or borrower for the purpose of negotiating, arranging, finding, or procuring mortgage loans, or commitments for mortgage loans
- Serves as agent for any person in an attempt to obtain a mortgage loan
- Serves as agent for any person who has money to lend for a mortgage loan
How do Mortgage Brokers Apply For a License in New Hampshire?
Mortgage brokers in New Hampshire must navigate several steps to secure their license. Below are the general guidelines, but applicants should refer to the NMLS’s application guidelines for details on the process.
License Period – The New Hampshire Mortgage Broker License expires on December 31 of each year and must be renewed before the expiration date
Step 1 – Meet the Net Worth Requirements
Applicants for the New Hampshire Mortgage Broker License must have a company net worth (assets – liabilities) of at least $25,000. Applicants must submit a financial statement verifying their net worth when submitting their license application.
Step 2 – Purchase a Surety Bond
Mortgage brokers must purchase and maintain a surety bond with a minimum limit of $50,000
Step 3 – Hire a Qualifying Individual
All mortgage brokers must employ a qualifying individual who is responsible for handling the day to day operations of the company. The qualifying individual must have a minimum of three years of industry experience in a supervisory role. Applicants must submit documentation verifying this experience, and qualifying individuals must have an active managerial role within the organization.
Step 4 – Request an NMLS Account
The New Hampshire Mortgage Broker License application is submitted electronically through the Nationwide Multistate Licensing System (NMLS). To submit a license application, applicants must first request to obtain an NMLS account.
Step 5 – Complete the Application
All New Hampshire Mortgage Broker License applications can be completed online through the NMLS. Applicants must complete the entire application, and submit the following items:
-
- Company financial statements indicating a net worth of at least $25,000
- The following company contacts:
- Primary
- Primary consumer complaint
- Exam Billing
- Exam Delivery
- Litigation
- Pre-Exam Contact
- Disclosure questions
- Company’s AML/BSA Policy
- Company business plan containing the following information:
- Marketing strategies
- Products
- Target markets
- Fee schedule
- Operating structure
- Certificate of Good Standing
- Company staffing and internal policies
- Samples of all documents used in the regular course of the lending business
- Company formation documents
- Management chart detailing the company’s hierarchy
- Organization chart detailing the company’s ownership structure
- Affirmation form
- Form U-2
- List of all business activity conducted prior to licensure
Mortgage brokers must pay the following fees when submitting their license application:
-
- $500 license fee
- $100 NMLS processing fee
- $36.25 background check fee (per person)
- $15 credit report fee (per person)
How Do New Hampshire Mortgage Brokers Renew Their License?
Mortgage brokers can renew their licenses online through the NMLS. License holders need to simply login to their account to access their renewal application. The New Hampshire Mortgage Broker License expires on December 31 of each year and must be renewed before the expiration date.
What Are the Insurance Requirements for the New Hampshire Mortgage Broker License?
New Hampshire does not require mortgage brokers to purchase any form of liability insurance as a prerequisite to obtaining a business license. Mortgage brokers must purchase and maintain a surety bond with a minimum limit of $50,000.
How Do New Hampshire Mortgage Brokers File Their Bond?
New Hampshire mortgage brokers should submit the completed bond form, including the power of attorney, electronically through the NMLS. The surety bond requires signatures from both the surety company that issues the bond and a representative from the mortgage company. The surety company should include the following information on the bond form:
- Name and state of incorporation of entity/individual(s) buying the bond
- Surety company’s name and state of incorporation
- Date the bond is signed
What Can New Hampshire Mortgage Brokers Do to Avoid Claims Against Their Bond?
To avoid claims on their bond, mortgage brokers in New Hampshire must follow all license regulations in the state, including some of the most important issues below that tend to cause claim
- Do not engage in any acts of fraud
- Do not breach any contracts made with consumers
What Other Insurance Products Can Agents Offer Mortgage Brokers in New Hampshire?
New Hampshire does not require mortgage brokers to purchase any form of liability insurance as a prerequisite to obtaining a business license. However, most reputable businesses will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue liability insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for New Hampshire Mortgage Broker Customers?
The NMLS conveniently provides a public database to search for active Mortgage Brokers in New Hampshire. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.
