Residential mortgage loan professionals must post a Louisiana mortgage broker bond with the Office of Financial Institutions in order to complete the approval and licensing process. The mortgage broker bond form contains identical wording and intent as the Louisiana mortgage lender bond. Pursuant to the Louisiana S.A.F.E. Residential Mortgage Lending Act each broker/lender/originator is required to provide a surety bond based on the licensee’s loan volume of the previous year. The formula is as follows:
1.) For loan originations from $0 to $99,999,999, the surety bond requirement is $25,000.
2.) For loan originations over $100,000,000, the surety bond requirement is $50,000.
The state statute (LSA-R.S. 6:1088) provides that an original Louisiana mortgage broker bond in the amount as determined above, must be executed by a surety company authorized to conduct business in Louisiana. The surety bond must name the Office of Financial Institutions as obligee and the name of the principal insured on the bond must match exactly the full legal name of applicant. MLOs are not exempt from this statutory requirement. A Louisiana mortgage loan originator bond is required of all MLOs UNLESS he or she is employed by a mortgage broker or lender that has already provided the surety bond. The bond form guarantees the licensee’s compliance with LSA-R.S. 6:1088(G)(2) of the Louisiana Secure and Fair Enforcement of Mortgage Licensing Act of 200. The obligations is continuous in form however it can be canceled by surety upon giving a sixty-day written notice to the Office of Financial Institutions. The Louisiana mortgage broker bond also indemnifies any person(s) who suffer any damage(s) or loss as a result of the residential mortgage broker’s/lender’s breach of contract or of any obligation arising therefrom, or by any violation of law. The State or any person claiming against the bond may pursue an action for damages or other relief against the principal or the surety, or both. The bond is not cumulative, the liability of the surety for all breaches of the conditions of the Louisiana mortgage lender bond may in no event exceed the amount of the same.
Louisiana surety leader, Surety One, Inc. is a specialist in the bonding needs of the mortgage lending and brokering services industry. We offer both the surety and fidelity bonds required of mortgage professionals in ALL fifty states, Puerto Rico and the U.S. Virgin Islands. Visit us at SuretyOne.com, call (787) 333-0222 or (800) 373-2804, or email us at Underwriting@SuretyOne.com for a Louisiana mortgage broker bond application or information on ANY bond need.
