Maine Mortgage Loan Originator Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain Maine Mortgage Loan Originator Bonds
At a Glance:
- Lowest Cost: $188 per year or $19 per month based on the applicant’s credit
- Bond Amount: $25,000
- Who Needs it: All Maine mortgage loan originators (MLOs) who do not have a company sponsorship or do not meet the net worth requirements (more on this later)
- Purpose: To ensure the public will receive compensation for any damages should the mortgage loan originator fail to comply with licensing law
- Who Regulates Mortgage Loan Originators in Maine: The Maine Bureau of Consumer Credit Protection
Background
Maine statute 13-103 requires all mortgage loan originators operating in the state to obtain a license with the Bureau of Consumer Credit Protection. The Maine legislature enacted the licensing laws and regulations to ensure that mortgage loan originators engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, mortgage loan originators who are not sponsored by their employer must purchase and maintain a $25,000 surety bond to be eligible for licensure.
What is the Purpose of the Maine Mortgage Loan Originator Bond?
Maine requires mortgage loan originators 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 loan originator fails to comply with the regulations set forth in Maine statutes 13-101 through 13-120. Specifically, the bond protects the public in the event the mortgage loan originator 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 loan originator breaks licensing laws.
How Can an Insurance Agent Obtain a Maine Mortgage Loan Originator Surety Bond?
BondExchange makes obtaining a Maine Mortgage Loan Originator 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.
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Who is Required to Purchase a Bond?
Maine statute 13-113 requires all mortgage loan originators who are not sponsored by their employer or who do not have a positive net worth of at least $25,000 to purchase and maintain a $25,000 surety bond. MLOs who are sponsored by their company or who have at least a $25,000 net worth are exempt from the bond requirement.
Is a Credit Check Required for the Maine Mortgage Loan Originator Bond?
Surety companies will run a credit check on the mortgage loan originator to determine eligibility and pricing for the Maine Mortgage Loan Originator bond. MLOs with excellent credit and work experience can expect to receive the best rates. MLOs 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 MLO’s credit.
How Much Does the Maine Mortgage Loan Originator Transmitter Bond Cost?
The Maine Mortgage Loan Originator bond can cost anywhere between $188 to $1,250 per year or $19 to $125 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.
$25,000 Mortgage Loan Originator Bond Cost
| Credit Score | Bond Cost (1 year) | Bond Cost (1 month) |
|---|---|---|
| 700+ | $188 | $19 |
| 650 – 699 | $250 | $25 |
| 625 – 649 | $313 | $32 |
| 600 – 624 | $470 | $47 |
| 550 – 599 | $1,000 | $100 |
| 450 – 549 | $1,250 | $125 |
How Does Maine Define “Mortgage Loan Originator?”
Maine statute 13-102 defines a mortgage loan originator as any individual who takes a residential mortgage loan application or offers or negotiates terms of a residential mortgage loan.
Exemptions to this definition include:
- Loan processors and underwriters
- Real estate brokers
- Individuals and businesses involved solely in extensions of credit related to time share plans
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 Loan Originators Apply for a License in Maine?
Mortgage loan originators in Maine 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 Maine Mortgage Loan Originator License expires on December 31 of each year and must be renewed before the expiration date
Step 1 – Purchase a Surety Bond
MLOs who are not sponsored by their employer or who do not have a net worth of at least $25,000 must purchase and maintain a $25,000 surety bond
Step 2 – Complete the Pre-Licensure Education
MLOs must complete complete at least 20 hours of pre-licensure education administered by an approved course provider
Step 3 – Pass the Exam
After completing the required 20 hours of pre-licensure education, MLOs must pass the licensing exam
Step 4 – Request a NMLS Account
The Maine Mortgage Loan Originator 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 Maine Mortgage Loan Originator License applications can be completed online through the NMLS. Applicants must complete the entire application, and submit the following items:
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- Detailed list of the MLO’s employment history
- Employment verification form
MLO’s must pay the following fees when submitting their license application:
-
- $36.25 background check fee
- $30 processing fee
- $20 application fee
- $15 credit report fee
How Do Maine Mortgage Loan Originators Renew Their License?
Mortgage loan originators can renew their license online through the NMLS. License holders need to simply login to their account to access their renewal application. The Maine Mortgage Loan Originator License expires on December 31 of each year and must be renewed before the expiration date.
What Are the Insurance Requirements for the Maine Mortgage Loan Originator License?
The State of Maine does not require mortgage loan originators to obtain any form of liability insurance as a prerequisite to obtaining a business license. MLOs who are not sponsored by their employer or who do not have a net worth of at least $25,000 must purchase and maintain a $25,000 surety bond.
How Do Maine Mortgage Loan Originators File Their Bond?
Mortgage loan originators 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 the mortgage loan originator. 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 and state of incorporation
- Date the bond is signed
What Can Maine Mortgage Loan Originators Do to Avoid Claims Against Their Bond?
To avoid claims on their bond, mortgage loan originators in Maine 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
- Honor all contractual agreements with consumers
- Pay all required taxes and fees
What Other Insurance Products Can Agents Offer Mortgage Loan Originators in Maine?
Maine does not require mortgage loan originators 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 Maine Mortgage Loan Originator Customers?
The NMLS conveniently provides a public database to search for active mortgage loan originators in Maine. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.