Oklahoma Mortgage Lender Bond: A Comprehensive Guide
August 10, 2021
This guide provides information for insurance agents to help their customers obtain Oklahoma Mortgage Lender Bonds
At a Glance:
- Average Cost: Between $500 to $5,000 per year based on the applicant’s credit
- Bond Amount: $100,000
- Who Needs it: All mortgage lenders operating in Oklahoma
- Purpose: To ensure the public will receive compensation for any damages should the mortgage lender violate licensing law
- Who Regulates Mortgage Lenders In Oklahoma: The Oklahoma Department of Consumer Credit Licensing
Background
Oklahoma statute 2095.11.1 requires all mortgage lenders operating in the state to obtain a license with the Department of Consumer Credit Licensing. The Oklahoma legislature enacted the licensing laws and regulations to ensure that mortgage lenders engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, mortgage lenders must purchase and maintain a $100,000 surety bond to be eligible for licensure.
What is the Purpose of the Oklahoma Mortgage Lender Bond?
Oklahoma requires mortgage lenders 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 lender fails to comply with the regulations set forth in Oklahoma statute 2095.18. Specifically, the bond protects the public in the event the mortgage lender 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 lender breaks licensing laws.
How Can an Insurance Agent Obtain an Oklahoma Mortgage Lender Surety Bond?
BondExchange makes obtaining an Oklahoma Mortgage Lender 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.
Is a Credit Check Required for the Oklahoma Mortgage Lender Bond?
Surety companies will run a credit check on the owners of the mortgage company to determine eligibility and pricing for the Oklahoma Mortgage Lender 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 Oklahoma Mortgage Lender Bond Cost?
The Oklahoma Mortgage Lender Bond can cost anywhere between $500 to $5,000 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 $100,000 bond requirement.
$100,000 Mortgage Lender Bond Cost
| Credit Score | Bond Cost (1 year) |
|---|---|
| 700+ | $500 |
| 650 – 699 | $1,000 |
| 625 – 649 | $1,250 |
| 600 – 624 | $1,880 |
| 550 – 599 | $4,000 |
| 500 – 549 | $5,000 |
How Does Oklahoma Define “Mortgage Lender?”
Oklahoma statute 2095.2 defines a mortgage lender as any business entity who takes an application for, makes, or services a residential mortgage loan.
How Do Mortgage Lenders Apply for a License in Oklahoma
Mortgage lenders in Oklahoma 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 Oklahoma mortgage lender license expires on December 31 of every year and must be renewed before the expiration date
Step 1 – Meet the Net Worth Requirements
Applicants for the Oklahoma Mortgage Lender License must maintain a minimum company net worth (assets – liabilities) of at least $25,000. Mortgage lenders must submit an audited financial statement, prepared by a CPA, when submitting their license application.
Step 2 – Purchase a Surety Bond
Mortgage lenders must purchase and maintain a $100,000 surety bond
Step 3 – Request a NMLS Account
The Oklahoma Mortgage Lender 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 4 – Complete the Application
All Oklahoma Mortgage Lender License applications can be completed online through the NMLS. Applicants must complete the entire application, and submit the following items:
-
- Audited company financial statements indicating a net worth of at least $25,000
- Primary company and consumer complaint contact information
- Disclosure questions
- Certificate of Good Standing
- Company formation documents
Mortgage lenders must pay the following fees when submitting their license application:
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- $950 application fee
- $710 licensing fee
- $100 NMLS licensing fee
- $36.25 background check fee (per person)
- $15 credit report fee (per person)
How Do Oklahoma Mortgage Lenders Renew Their License?
Mortgage lenders can renew their license online through the NMLS. License holders need to simply login to their account to access their renewal application. The Oklahoma mortgage lender license expires on December 31 of every year and must be renewed before the expiration date.
What Are the Insurance Requirements for the Oklahoma Mortgage Lender License?
Oklahoma does not require mortgage lenders to purchase any form of liability insurance as a prerequisite to obtaining a business license. Mortgage lenders must purchase and maintain a $100,000 surety bond.
How Do Oklahoma Mortgage Lenders File Their Bond?
Mortgage lenders 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 of entity/individual(s) buying the bond
- Surety company’s name
- Date the bond is signed
What Can Oklahoma Mortgage Lenders Do to Avoid Claims Against Their Bond?
To avoid claims on their bond, mortgage lenders in Oklahoma must ensure that they follow all license regulations in the state, including some of the most important issues below that tend to cause claims:
- Do not engage in any acts of fraud
- Do not breach any contracts made with consumers
What Other Insurance Products Can Agents Offer Mortgage Lenders in Oklahoma?
Oklahoma does not require mortgage lenders 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 other types of 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 Oklahoma Mortgage Lender Customers?
The NMLS conveniently provides a public database to search for active mortgage lenders in Oklahoma. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.
