Indiana Mortgage Lender Bond

Enter the business name to obtain a quote:

Indiana Mortgage Lender Bond: A Comprehensive Guide

This guide provides information for insurance agents to help mortgage lenders obtain Indiana Mortgage lender 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 lenders seeking to obtain a license in Indiana as well as companies who employ licensed mortgage loan originators
  • Purpose: To ensure the public will receive compensation for any damages should the mortgage lender fail to comply with licensing law
  • Who Regulates Mortgage Lenders in Indiana: The Indiana Department of Financial Institutions


Indiana code 24-4.4 requires all mortgage lenders operating in the state to obtain a license with the Department of Financial Institutions. The Indiana 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 Indiana Mortgage Lender Bond?

Indiana 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 licensing regulations set forth in the First Lien Mortgage Lending Act. Specifically, the bond protects consumers in the event the mortgage lender engages in any acts of fraud or misrepresentation. In short, the bond is a type of insurance that protects the public if the mortgage lender breaks licensing laws.

Indiana Mortgage Lender Bond Form
Indiana Mortgage Lender Bond Form

Who is Required to Purchase the Indiana Mortgage Lender Bond?

All mortgage lenders seeking licensure in Indiana must purchase a $100,000 surety bond. Additionally, all businesses who are not subject to licensing requirements but employ licensed mortgage loan originators (MLO) must purchase this bond as a prerequisite to sponsoring their MLO employees.

How Can an Insurance Agent Obtain an Indiana Mortgage Lender Surety Bond?

BondExchange makes obtaining an Indiana 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? 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.

Not an agent? Then let us pair you with one!

BX Agent Finder Link

Click the above image to find a BX Agent near you

Is a Credit Check Required for the Indiana Mortgage Lender Bond?

Surety companies will run a credit check on the owners of the mortgage lending company to determine eligibility and pricing for the Indiana Mortgage Lender bond. Owner’s 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 Indiana Mortgage Lender Bond Cost?

The Indiana Mortgage Lender surety bond can cost anywhere between 0.5% to 5% of the bond amount 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 a $100,000 bond requirement.

$100,000 Mortgage Lender 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

*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.

How Does Indiana Define “Mortgage Lender?”

The Indiana First Lien Mortgage Lending Act defines a mortgage lender as any business entity who regularly engages in the business of originating consumer purpose mortgage loans.

Indiana Mortgage Lender Bond

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 Lenders Apply for a License in Indiana?

Mortgage lenders in Indiana 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 Indiana Mortgage Lender 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 Indiana Mortgage Lender License must have a company net worth (assets – liabilities) of at least $100,000 with a minimum of $50,000 in liquid assets. Applicants must submit either a reviewed or audited financial statement, prepared by a CPA, verifying their net worth when submitting their license application.

Step 2 – Hire a Qualifying Individual

All mortgage lenders must employ at least one qualifying individual who has a minimum of two years experience of lending or credit evaluation experience. Applicants must submit documentation verifying this experience, and qualifying individuals must have an active managerial role within the organization.

Step 3 – Purchase a Surety Bond

Mortgage lenders must purchase and maintain a $100,000 surety bond

Step 4 – Request NMLS Account

The Indiana 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 5 – Complete the Application

All Indiana Mortgage Lender License applications can be completed online through the NMLS. Applicants must complete the entire application, and submit the following items:

    • Audited or reviewed company financial statements
    • Primary company and consumer complaint contact information
    • CDFI Certification Information
    • Company’s independently reviewed AML/BSA policy
    • Company business plan containing the following information:
      • Marketing strategies
      • Products and Services offered in Indiana
      • Target markets
      • Fee schedule
      • Operating structure the company intends to employ
    • Certificate of Good Standing obtained from the Indiana INBiz platform
    • Company staffing and internal policies
    • Required document samples
    • Company formation documents
    • Management chart showing the company hierarchy
    • Copy of any written agreement or contract related to mortgage servicing rights
    • Organizational chart showing the company ownership structure
    • Warehouse line of credit agreement
    • Copies of all non-financial external audits conducted within the past month
    • Copies of all internal control external audits conducted within the past month

Mortgage lenders must pay the following fees when submitting their license application:

    • $1,000 application fee
    • $100 processing fee
    • $36.25 background check fee (per person)

How Do Indiana 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 Indiana Mortgage Lender License expires on December 31 of each year and must be renewed before the expiration date.

What Are the Insurance Requirements for the Indiana Mortgage Lender License?

The State of Indiana does not require mortgage lenders to obtain 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 Indiana 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 lending company. The surety company should include the following information on the bond form:

  • Legal name, city and county of entity/individual(s) buying the bond
  • Surety company’s name
  • Bond amount
  • Date the bond goes into effect
  • Date the bond is signed

What Can Indiana Mortgage Lenders Do to Avoid Claims Against Their Bond?

In order to avoid claims made against their bond, mortgage lenders in Indiana must ensure not to engage in any acts of fraud or misrepresentation when servicing Indiana borrowers.

What Other Insurance Products Can Agents Offer Mortgage Lenders in Indiana?

Indiana does not require mortgage lenders to purchase any form of liability insurance as a prerequisite to obtaining a 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 Indiana Mortgage Lender Customers?

The NMLS conveniently provides a public database to search for active mortgage lenders in Indiana. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

Indiana Mortgage Lender Bond