Pennsylvania Mortgage Servicer Bond

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Pennsylvania Mortgage Servicer Bond: A Comprehensive Guide

This guide provides information for insurance agents to help their customers obtain Pennsylvania Mortgage Servicer Bonds

Mortgage servicers are required to purchase both a fidelity bond and a separate business license bond. This guide focuses solely on the business license bond. For assistance obtaining a fidelity bond, contact BondExchange.

At a Glance:

  • Lowest Cost: $3,750 per year or $375 per month, based on the applicant’s credit
  • Bond Amount: $500,000
  • Who Needs it: All mortgage servicers operating in Pennsylvania
  • Purpose: To ensure the public will receive compensation for any damages should the mortgage servicers violate licensing law
  • Who Regulates Mortgage Servicers In Pennsylvania: The Pennsylvania Department of Banking and Securities
Pennsylvania Mortgage Servicer Bond Form
Pennsylvania Mortgage Servicer Bond Form


Pennsylvania statute 6111 requires all mortgage servicers operating in the state to obtain a license with the Department of Banking and Securities. The Pennsylvania legislature enacted the licensing laws and regulations to ensure that mortgage servicers engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, mortgage servicers must purchase and maintain a $500,000 surety bond to be eligible for licensure.

What is the Purpose of the Pennsylvania Mortgage Servicer Bond?

Pennsylvania requires mortgage servicers 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 servicer fails to comply with the regulations set forth in the Pennsylvania Mortgage Licensing Act. Specifically, the bond protects the public in the event the mortgage servicer 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 servicer breaks licensing laws.

How Can an Insurance Agent Obtain a Pennsylvania Mortgage Servicer Surety Bond?

BondExchange makes obtaining a Pennsylvania Mortgage Servicer 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 Pennsylvania Mortgage Servicer Bond?

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

The Pennsylvania Mortgage Servicer Bond can cost anywhere between $3,750 to $25,000 per year or $375 to $2,500 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 $500,000 bond requirement.

$500,000 Mortgage Servicer Bond Cost

Credit Score Bond Cost (1 year) Bond Cost (1 month)
700+ $3,750 $375
650 – 699 $5,000 $500
625 – 649 $6,250 $625
600 – 624 $7,500 $750
550 – 599 $20,000 $2,000
500 – 549 $25,000 $2,500

How Does Pennsylvania Define “Mortgage Servicer?”

Pennsylvania statute 6102 defines a mortgage servicer as any business entity who collects periodic mortgage payments from a borrower and uses these funds to pay lenders on the borrower’s behalf.

Pennsylvania Mortgage Servicer 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 Servicers Apply for a License in Pennsylvania

Mortgage servicers in Pennsylvania 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 Pennsylvania Mortgage Servicer License expires on December 31 of each year and must be renewed before the expiration date

Step 1 – Purchase a Surety Bond

Mortgage servicers must purchase and maintain a $500,000 surety bond as well as a fidelity bond

Step 2 – Meet the Net Worth Requirements

Applicants for the Pennsylvania Mortgage Servicer License must have a company net worth (assets – liabilities) of at least $250,000. Applicants must submit company financial statements, prepared by a CPA, verifying their net worth when submitting their license application.

Step 3 – Hire a Qualifying Individual

Mortgage servicers must employ a qualified individual who is capable of handling the day to day operations of the mortgage business. The qualifying individual must be a licensed mortgage originator, or meet the licensing requirements of a mortgage originator, live within 100 miles of the licensed office location, and be employed in a management position.

Step 4 – Complete the Pre-Licensure Education

At least one management level employee must complete the required 20 hour pre-licensure education course. After completion of the training course, the employee must satisfy one of the following exam requirements:

    • Passing results on both the National and Pennsylvania State components of the SAFE Test
    • Passing results on both the National and Stand-alone UST components of the SAFE Test
    • Passing results on the National Test Component with Uniform State Content

Step 5 – Request a NMLS Account

The Pennsylvania Mortgage Servicer 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 6 – Complete the Application

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

    • Company financial statements indicating a net worth of at least $250,000
    • The following company contacts:
      • Primary
      • Primary consumer complaint
      • Exam Billing
      • Consumer Complaint (Regulator)
      • Pre-Exam Contact
    • Information regarding any approvals/designations the company holds (if applicable)
    • Disclosure questions
    • Detailed company business plan
    • All company staffing and internal policies and procedures
    • Certificate of authority (if incorporated in another state)
    • Company formation documents
    • Company management and organizational charts
    • List of all mortgage servicing business conducted in Pennsylvania prior to licensure
    • Company memorandum tax certification
    • Individual memorandum tax certification

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

    • $2,500 license fee
    • $100 NMLS processing fee
    • $22 background check fee (per person)
    • $15 credit report fee (per person)

How Do Pennsylvania Mortgage Servicers Renew Their License?

Mortgage servicers can renew their license online through the NMLS. License holders need to simply login to their account to access their renewal application. The Pennsylvania Mortgage Servicer License expires on December 31 of each year and must be renewed before the expiration date.

What Are the Insurance Requirements for the Pennsylvania Mortgage Servicer License?

Pennsylvania does not require mortgage servicers to purchase any form of liability insurance as a prerequisite to obtaining a business license. Mortgage servicers must purchase and maintain a $500,000 surety bond as well as a fidelity bond.

How Do Pennsylvania Mortgage Servicers File Their Bond?

Mortgage servicers 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, address, and phone number of entity/individual(s) buying the bond
  • Surety company’s name, address, and phone number
  • Bond amount
  • Date the bond goes into effect
  • Date the bond is signed

What Can Pennsylvania Mortgage Servicers Do to Avoid Claims Against Their Bond?

To avoid claims on their bond, mortgage servicers in Pennsylvania must ensure that they 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
  • Do not breach any contracts made with consumers
  • Pay all required taxes and fees

What Other Insurance Products Can Agents Offer Mortgage Servicers in Pennsylvania?

Pennsylvania does not require mortgage servicers 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 other types of 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 Pennsylvania Mortgage Servicer Customers?

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

Pennsylvania Mortgage Servicer Bond