The state of Michigan defines a loan originator as any individual who for compensation or gain, or in the expectation of compensation or gain, takes a residential mortgage loan application, offers or negotiates terms of a residential mortgage loan, and who is not an employee of a depository financial institution or a subsidiary of a depository financial institution. Individuals must obtain a license through the Michigan Department of Insurance and Financial Services (DIFS) to conduct business as a Loan Originator. License applications are submitted through the Nationwide Mortgage Licensing System (NMLS), and additional requirements for Michigan can be found on the NMLS website. Licensing costs are $280, including the NMLS processing fees, and all fees paid through the NMLS are not refundable.
As part of the licensing requirements, Loan Originators must submit a surety bond to the DIFS. There are two types of bonds, individual and company, that have varying bond amounts based on the following:
Individual MLO Surety Bond
- $10,000 Bond – First Time Applicant
- $10,000 Bond – If the individual is currently licensed as a loan originator and did not close any mortgage loans in the preceding calendar year, or if the sum of the principal amounts of mortgage loans closed by the mortgage loan originator in the preceding calendar year is less than $12,000,000
- $25,000 Bond – If the sum of the principal amounts of mortgage loans closed by the licensed mortgage loan originator in the preceding calendar year is $12,000,000 or more and less than $24,000,000
- $50,000 Bond – If the sum of the principal amounts of mortgage loans closed by the mortgage loan originator in the preceding calendar year is $24,000,000 or more
Company MLO Surety Bond
- $50,000 Bond – If the sum of the principal amounts of mortgage loans closed or modified in the preceding calendar year by the Sponsoring Company is less than $12,000,000
- $150,000 Bond – If the sum of the principal amounts of mortgage loans closed or modified in the preceding calendar year by the Sponsoring Company is $12,000,000 or more and less than $24,000,000
- $250,000 Bond – If the sum of the principal amounts of mortgage loans closed or modified in the preceding calendar year by the Sponsoring Company is $24,000,000 or more
This surety bond guarantees that the principal (loan originator) complies with all provisions of Michigan law and protects individuals and the state from loss or damages. If a consumer or the state incurs any losses or damages due to the principal’s failure to comply with Michigan law, a claim may be filed against the surety bond. All damages paid out by the surety must be reimbursed by the principal.
Pacific Surety is proud to offer industry low rates and quick turnaround time for quoting of Michigan Mortgage Loan Originator Surety Bonds. Feel free to complete our simple application to obtain an approval within hours.