New Hampshire Mortgage Banker Bond: A Comprehensive Guide
July 23, 2021
This guide provides information for insurance agents to help their customers obtain New Hampshire Mortgage Banker Bonds
At a Glance:
- Average Cost: Between $750 to $5,000 per year based on the applicant’s credit
- Bond Amount: Minimum of $100,000 (more on this later)
- Who Needs it: All mortgage bankers operating in New Hampshire
- Purpose: To ensure the public will receive compensation for any damages should the mortgage banker violate licensing law
- Who Regulates Mortgage Bankers in New Hampshire: The New Hampshire Banking Department
Background
New Hampshire statute 397-A:3 requires all mortgage bankers 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 bankers engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, mortgage bankers must purchase and maintain a surety bond to be eligible for licensure.
What is the Purpose of the New Hampshire Mortgage Banker Bond?
New Hampshire requires mortgage bankers 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 banker 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 banker 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 banker breaks licensing laws.
How Can an Insurance Agent Obtain a New Hampshire Mortgage Banker 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 statute 397-A:5 dictates that the limit on the New Hampshire Mortgage Banker bond must be a minimum of $100,000. The Department of Banks may increase the bond limit to an amount that reflects the total dollar amount of mortgage loans originated by the banker.
Is a Credit Check Required for the New Hampshire Mortgage Banker 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 Banker 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 Banker Bond Cost?
The New Hampshire Mortgage Banker Bond can cost anywhere between $750 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 Banker Bond Cost
| Credit Score | Bond Cost (1 year) |
|---|---|
| 700+ | $750 |
| 650 – 699 | $1,000 |
| 625 – 649 | $1,250 |
| 600 – 624 | $1,500 |
| 550 – 599 | $4,000 |
| 500 – 549 | $5,000 |
How Does New Hampshire Define “Mortgage Banker?”
New Hampshire statute 397-A:1 defines a mortgage banker as any business entity who provides one or more of the following services:
- Makes or originates a mortgage loan as payee
- Advances or makes a commitment to advance funds for a mortgage loan
- Otherwise funds or offers to fund a mortgage loan
How do Mortgage Bankers Apply For a License in New Hampshire?
Mortgage bankers 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 Banker 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 Banker License must have a positive company net worth (assets – liabilities). Applicants must submit a financial statement verifying their net worth when submitting their license application.
Step 2 – Purchase a Surety Bond
Mortgage bankers must purchase and maintain a surety bond with a minimum limit of $100,000
Step 3 – Hire a Qualifying Individual
All mortgage bankers 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 a NMLS Account
The New Hampshire Mortgage Banker 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 Banker License applications can be completed online through the NMLS. Applicants must complete the entire application, and submit the following items:
-
- Company financial statements showing a positive net worth
- Disclosure questions
- The following company contacts:
- Primary
- Primary consumer complaint
- Exam Billing
- Exam Delivery
- Litigation
- Pre-Exam Contact
- Company’s AML/BSA Policy
- Company business plan containing the following information:
- Marketing strategies
- Products
- Target markets
- Fee schedule
- 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 bankers 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 Bankers Renew Their License?
Mortgage bankers can renew their license online through the NMLS. License holders need to simply login to their account to access their renewal application. The New Hampshire Mortgage Banker 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 Banker License?
New Hampshire does not require mortgage bankers to purchase any form of liability insurance as a prerequisite to obtaining a business license. Mortgage bankers must purchase and maintain a surety bond with a minimum limit of $100,000.
How Do New Hampshire Mortgage Bankers File Their Bond?
New Hampshire mortgage bankers 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 and state of incorporation
- Date the bond is signed
What Can New Hampshire Mortgage Bankers Do to Avoid Claims Against Their Bond?
To avoid claims on their bond, mortgage bankers 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 Bankers in New Hampshire?
New Hampshire does not require mortgage bankers 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 Banker Customers?
The NMLS conveniently provides a public database to search for active Mortgage Bankers 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.
