The State of Michigan requires any sole proprietor or company who conducts business as a mortgage servicer to be licensed through the Michigan Department of Insurance and Financial Services (DIFS). Per Michigan law, there are two types of servicer licenses: 1st Mortgage Broker (Lender and Servicer License) and 2nd Mortgage Broker (Lender and Servicer License). 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 for both types of licenses are $1,550, including the NMLS processing fees, and all fees paid through the NMLS are not refundable.
As part of the licensing requirements for both types of licenses, servicers must submit a $125,000 Electronic Surety Bond through the NMLS website. This surety bond guarantees that the principal (mortgage servicer) 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.
Mortgage Servicer Bonds are required as part of the licensing process for Michigan mortgage professionals in order to comply with provisions of the Michigan Mortgage Loan Originator Licensing Act. The bonds ensure that the bonded party will comply with the rules, regulations and guidelines established by the state of Michigan and the Director, Department of Insurance and Financial Services of the State of Michigan. The bond is conditioned upon the principal’s compliance with the provision of Michigan Act No. 173, Public Acts of 1987. Furthermore, the bond guarantees payment of monies due to the state or any person by virtue of the provisions of the Act.
Pacific Surety is proud to offer industry low rates and quick turnaround time for quoting of Michigan Mortgage Broker bonds. Feel free to complete our simple application to obtain an approval within hours.