According to the National Mortgage Licensing System, “any person or company that engages in the business of making consumer or commercial loans, or any person or company that engages in the business of negotiating or performing any act as a broker in connection with loans made by a finance lender, when secured by residential real property” are required to obtain a license in order to conduct business in the State of California. A critical component of the license application process is filing a surety bond.
The California Finance Lender Surety Bond guarantees the Lender’s faithful compliance with the provisions of the California Finance Lenders Law. The bond also ensures compensation for any person who sustains an injury by way of the Lender.
The required amount of the California Finance Lender Surety Bond is at least $25,000; however, the actual bond amount depends on the aggregate dollar amount of residential mortgage loans originated by the mortgage lender in the preceding year:
The California Finance Lender Surety Bond is continuous in nature; therefore, it is in full force and effect until cancelled. The bond may be cancelled by the Surety at any time by giving a notice of cancellation to the Department of Business Oversight at least 30 days before the effective cancellation date.
All fees are required by the obligee, not the Surety Company.