According to the National Mortgage Licensing System, “any entity… who engages in the mortgage loan business by directly or indirectly negotiating or placing mortgage loans for others in the primary market for consideration” is required to be licensed as a mortgage broker with the Commonwealth of Pennsylvania. A provision of the Pennsylvania Mortgage Licensing Act, Section 6131 requires all license applicants to file a Surety Bond with the Department of Banking and Securities. The Pennsylvania Mortgage Broker Bond ensures that the Mortgage Broker will perform all business activities in compliance with the Pennsylvania Mortgage Licensing Act. The bond is in place for the protection of the public. If any person is harmed by wrongdoing of the broker, the third party may file a claim against the bond. If the claim is valid, the bond offers financial compensation for damages caused by the mortgage broker.
The required amount for a Pennsylvania Mortgage Broker Bond depends on the anticipated or actual amount of Pennsylvania mortgage loans originated by the Principal:
If the broker is accepting advanced fees, he or she must file a $100,000 surety bond.
The Pennsylvania Mortgage Broker Bond is continuous in nature; therefore, the bond will remain in full force and effect until cancelled by the Surety. The Surety may cancel the bond at any time by providing the Department of Banking and Securities with a written notice of cancellation at least 30 days prior to the effective date of cancellation.
All fees are required by the obligee, not the Surety Company.