Washington Mortgage Broker Bond

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Washington Mortgage Broker Bond: A Comprehensive Guide

This guide provides information for insurance agents to help their customers obtain a Washington Mortgage Broker Bond

At a Glance:

  • Lowest Cost: 0.75% of the bond amount per year based on the applicant’s credit
  • Bond Amount:  Between $20,000 to $60,000 (more on this later)
  • Who Needs it: All mortgage brokers operating in Washington
  • 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 Washington: The Washington Department of Financial Institutions
Washington Mortgage Broker Bond Form
Washington Mortgage Broker Bond Form


Washington statute 19.146.200 requires all mortgage brokers operating in the state to obtain a license with the Department of Financial Institutions. The Washington legislature enacted the licensing laws and regulations to ensure that mortgage brokers engage in ethical business practices. To provide financial security for the enforcement of the licensing law, mortgage brokers must purchase and maintain a surety bond to be eligible for licensure.

What is the Purpose of the Washington Mortgage Broker Bond?

Washington 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 broker fails to comply with the licensing regulations set forth in the Washington Mortgage Broker Practices Act. Specifically, the bond protects the public in the event the mortgage broker 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 broker breaks licensing laws.

How Can an Insurance Agent Obtain a Washington Mortgage Broker Surety Bond?

BondExchange makes obtaining a Washington 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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How is the Bond Amount Determined?

Washington statute 19.146.205 dictates that the limit on the mortgage broker bond must be a minimum of $20,000. The statute also grants the Department of Financial Institutions the authority to increase the bond amount, on a case by case basis, to a maximum of $60,000 based on the total amount of loans originated by the broker.

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

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

The Washington Mortgage Broker Bond can cost anywhere between 0.75% to 5% of the bond amount per year. Insurance companies determine the rate based on several factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on a $20,000 bond requirement.

 $20,000 Mortgage Broker Bond Cost

Credit Score Bond Cost (1 year) Bond Cost (1 month)
700+ $150 $15
650 – 699 $200 $20
625 – 649 $250 $25
600 – 624 $500 $50
550 – 599 $750 $75
500 – 549 $1,000 $100

*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 Washington Define “Mortgage Broker?”

Washington statute 19.146.010 defines a mortgage broker as any business entity who assists consumers in obtaining residential mortgage loans or who performs loan modification services on residential mortgage loans.

Washington 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 Washington?

Mortgage brokers in Washington must navigate several steps to secure their license. Below are the general guidelines, but applicants should refer to the NMLS’s application checklist for details on the process.

License Period – The Washington Mortgage Broker License expires on December 31 of each year and must be renewed before the expiration date

Step 1 – Register with the Secretary of State

Mortgage brokers must register their business entity with the Washington Secretary of State. Instructions on how to register can be found here.

Step 2 – Obtain a Business License

Mortgage brokers who service Washington consumers must obtain a standard business license prior to submitting their mortgage broker license application

Step 3 – Purchase a Surety Bond

Mortgage brokers must purchase and maintain a surety bond with a minimum limit of $20,000

Step 4 – Hire a Designated Broker

Mortgage brokers must employ a designated broker who is capable of handling the day to day operations of the brokerage business. The designated broker must satisfy the following criteria:

    • Has passed the required exam
    • Has a high school diploma or its equivalent
    • Has at least 2 years of relevant industry experience

Step 5 – Request an NMLS Account

The Washington 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 6 – Complete the Application

All Washington Mortgage Broker License applications can be completed online through the NMLS. Completed applications will include the following items:

    • List of all web addresses the company operates
    • Company management and organizational charts
    • Company business plan containing the following information:
      • Marketing strategy
      • Products
      • Target markets
    • Trust account authorization

Mortgage brokers must pay a $1,001 fee when submitting their license application.

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

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

The State of Washington 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 surety bond with a minimum limit of $20,000.

How Do Washington 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 company. The surety company should include the following information on the bond form:

  • Legal name, UBI, and NMLS number of entity/individual(s) buying the bond
  • Surety company’s name
  • Bond amount
  • Date the bond is signed

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

To avoid claims made against their bond, mortgage brokers in Washington 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
  • Do not breach any contracts made with consumers

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

Washington does not require mortgage brokers 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 Washington Mortgage Broker Customers?

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

Washington Mortgage Broker Bond