Kentucky Mortgage Broker Bond

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Kentucky Mortgage Broker Bond: A Comprehensive Guide

This guide provides information for insurance agents to help mortgage brokers obtain Kentucky Mortgage Broker Bonds

At a Glance:

  • Lowest Cost: $375 per year or $38 per month based on the applicant’s credit
  • Bond Amount: $50,000
  • Who Needs it: All mortgage brokers operating in Kentucky
  • Purpose: To ensure the public will receive compensation for any damages should the mortgage broker fail to comply with licensing law
  • Who Regulates Mortgage Brokers in Kentucky: The Kentucky Department of Financial Institutions
Kentucky Mortgage Broker Bond Form
Kentucky Mortgage Broker Bond Form


Kentucky statute 286.8-030 requires all mortgage brokers operating in the state to obtain a license with the Department of Financial Institutions. The Kentucky 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 $50,000 surety bond to be eligible for licensure.

What is the Purpose of the Kentucky Mortgage Broker Bond?

Kentucky 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 licensing regulations set forth in Kentucky statute 286.8. Specifically, the bond protects the public in the event the mortgage broker engages in any acts of fraud or fails to honor any agreements 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 Kentucky Mortgage Broker Surety Bond?

BondExchange makes obtaining a Kentucky Mortgage Broker 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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Do All Mortgage Loan Originators Need to Purchase a Bond?

No, in most instances the mortgage loan originator’s employer will cover the MLO under their own surety bond. MLOs are only required to purchase a bond if they are not covered under their employer’s surety bond.

Is a Credit Check Required for the Kentucky Mortgage Broker Bond?

Surety companies will run a credit check on the owners of the mortgage brokerage company to determine eligibility and pricing for the Kentucky Mortgage Broker 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 Kentucky Mortgage Broker Bond Cost?

The Kentucky Mortgage Broker surety bond can cost anywhere between $375 to $2,500 per year or $38 to $250 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 $50,000 bond requirement.

$50,000 Mortgage Broker Bond Cost

Credit Score Bond Cost (1 year) Bond Cost (1 month)
700+ $375 $38
650 – 699 $500 $50
625 – 649 $625 $63
600 – 624 $940 $94
550 – 599 $2,000 $200
450 – 549 $2,500 $250

*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 Kentucky Define “Mortgage Broker?”

Kentucky statute 286.8-010 defines a mortgage broker as any individual or business entity who serves as an agent for a borrower who is attempting to obtain a mortgage loan, or advertises themselves as being capable to do so.

Kentucky Mortgage Broker 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 Brokers Apply for a License in Kentucky?

Mortgage brokers in Kentucky 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 Kentucky Mortgage Broker License expires on November 30 of each year and must be renewed before the expiration date

Step 1 – Purchase a Surety Bond

Mortgage brokers must purchase and maintain a $50,000 surety bond

Step 2 – Hire a Qualifying Individual

Applicants for the Kentucky Mortgage Broker License must have at least one individual with a minimum of two years of experience in the mortgage industry employed by the organization. The applicant must submit documentation verifying the qualifying individual’s work experience, and the qualifying individual must complete an approved pre-licensure education course.

Step 3 – Request a NMLS Account

The Kentucky 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 4 – Complete the Application

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

    • Compiled company financial statements prepared by a CPA
    • Certificate of Good Standing obtained from the Kentucky Secretary of State
    • Company formation documents
    • Organizational chart detailing the company’s ownership structure
    • Personal financial statements for each individual with at least a 10% ownership interest in the company

Mortgage brokers must pay an $850 licensing fee when submitting their application.

How Do Kentucky Mortgage Brokers Renew Their License?

Mortgage brokers can renew their license online through the NMLS. License holders need to simply login to their account to access their renewal application. The Kentucky Mortgage Broker License expires on November 30 of each year and must be renewed before the expiration date.

What Are the Insurance Requirements for the Kentucky Mortgage Broker License?

The State of Kentucky does not require mortgage brokers to obtain any form of liability insurance as a prerequisite to obtaining a business license. Mortgage brokers must purchase and maintain a $50,000 surety bond.

How Do Kentucky Mortgage Brokers File Their Bond?

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 brokerage company. The surety company should include the following information on the bond form:

  • Legal name and address of entity/individual(s) buying the bond
  • Surety company’s name
  • Date the bond goes into effect
  • Date the bond is signed

What Can Kentucky Mortgage Brokers Do to Avoid Claims Against Their Bond?

To avoid claims on their bond, mortgage brokers in Kentucky must 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
  • Pay all required taxes and fees
  • Honor all agreements made with consumers

What Other Insurance Products Can Agents Offer Mortgage Brokers in Kentucky?

Kentucky does not require mortgage brokers 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 Kentucky Mortgage Broker Customers?

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

Kentucky Mortgage Broker Bond