Nebraska Mortgage Banker Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain Nebraska Mortgage Banker Bonds
At a Glance:
- Lowest Cost: $500 per year or $50 per month based on the applicant’s credit
- Bond Amount: $100,000
- Who Needs it: All mortgage bankers operating in Nebraska
- Purpose: To ensure the public will receive compensation for any damages should the mortgage banker violate licensing law
- Who Regulates Mortgage Brokers in Nebraska: The Nebraska Department of Banking and Finance
Background
Nebraska statute 45-705 requires all mortgage bankers operating in the state to obtain a license with the Department of Banking and Finance. The Nebraska 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 $100,000 surety bond to be eligible for licensure.
What is the Purpose of the Nebraska Mortgage Banker Bond?
Nebraska 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 the Nebraska Residential Mortgage Licensing Act. 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 Nebraska Mortgage Banker Bond?
BondExchange makes obtaining a Nebraska 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? Gain access 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.
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Is a Credit Check Required for the Nebraska Mortgage Banker Bond?
Surety companies will run a credit check on the owners of the mortgage company to determine eligibility and pricing for the Nebraska 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 Nebraska Mortgage Banker Bond Cost?
The Nebraska Mortgage Banker Bond can cost anywhere between $500 to $5,000 per year or $50 to $500 per month. 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) | Bond Cost (1 month) |
|---|---|---|
| 700+ | $500 | $50 |
| 650 – 699 | $1,000 | $100 |
| 625 – 649 | $1,250 | $125 |
| 600 – 624 | $1,880 | $188 |
| 550 – 599 | $4,000 | $400 |
| 500 – 549 | $5,000 | $500 |
How Does Nebraska Define “Mortgage Banker?”
Nebraska statute 45-702 defines a mortgage banker as any business entity who makes, originates, services, acquires, sells, negotiates or arranges for a residential mortgage loan.
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How do Mortgage Bankers Apply For a License in Nebraska?
Mortgage bankers in Nebraska 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 Nebraska Mortgage Banker License expires on December 31 of each year and must be renewed before the expiration date
Step 1 – Purchase a Surety Bond
Mortgage bankers must purchase and maintain a $100,000 surety bond
Step 2 – Request a NMLS Account
The Nebraska 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 3 – Complete the Application
All Nebraska Mortgage Banker License applications can be completed online through the NMLS. Applicants must complete the entire application, and submit the following items:
-
- The following company contacts:
- Primary
- Consumer complaint (Primary)
- Accounting
- Exam Billing
- Licensing
- Consumer Complaint (Public)
- Exam Delivery
- Litigation
- Consumer Complaint (Regulator)
- Legal
- Pre-Exam Contact
- Disclosure questions
- Certificate of Good Standing
- Company formation documents
- Management chart detailing the company’s hierarchy
- Organization chart detailing the company’s ownership structure
- Registered agent appointment and consent form
- Citizen attestation form (sole proprietors only)
- The following company contacts:
Mortgage bankers must pay the following fees when submitting their license application:
-
- $400 application fee
- $100 processing fee
How Do Nebraska 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 Nebraska 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 Nebraska Mortgage Banker License?
Nebraska 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 $100,000 surety bond.
How Do Nebraska Mortgage Bankers File Their Bond?
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 and NMLS number of entity/individual(s) buying the bond
- Surety company’s name
- Date the bond goes into effect
- Date the bond is signed
What Can Nebraska Mortgage Bankers Do to Avoid Claims Against Their Bond?
To avoid claims on their bond, mortgage bankers in Nebraska 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 Nebraska?
Nebraska 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 Nebraska Mortgage Banker Customers?
The NMLS conveniently provides a public database to search for active mortgage bankers in Nebraska. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.
