Iowa Mortgage Broker Bond

Iowa Code §535B.9 sets a $100,000 surety bond for anyone licensing as a mortgage broker or mortgage banker, and that same $100,000 is the amount for the great majority of licensees. The figure is not frozen at that number, though: the Superintendent of the Division of Banking adopted a volume scale under Iowa Admin. Code r. 187-18.2(6) that raises the bond to $150,000 once your prior calendar-year Iowa residential mortgage loan volume exceeds $100 million. Premium — what you actually pay a surety — typically runs about 1% to 3% of the $100,000 penal sum for well-qualified applicants, so roughly $1,000 to $3,000 a year rather than the full bond amount.

Yes, and that is what makes Iowa unusual. Many states write a separate bond statute (and separate amounts) for lenders/bankers versus brokers. Iowa folds mortgage bankers, mortgage brokers, and closing agents into a single chapter — Iowa Code Chapter 535B — and §535B.9 applies the exact same bond and the exact same volume scale to bankers and brokers alike. So whether you fund loans on your own line or arrange them for a wholesale lender, you file the same $100,000 (or $150,000) bond with the same obligee, the Superintendent of Banking.

Under Iowa Admin. Code r. 187-18.2(6), the amount is set from the volume of residential mortgage loans made, originated, arranged, brokered, processed, underwritten, and serviced during the preceding calendar year. Notice how broad that list is — servicing and processing count, not just loans you originated. That is why a broker who touches a large book on a wholesale basis can cross the $100 million line and land in the $150,000 tier even without funding the loans directly. Count everything the rule lists, not just closed originations.

The scale is recalculated annually. If your prior calendar-year Iowa residential mortgage loan volume is $100 million or less, the bond stays at $100,000; above $100 million, it moves to $150,000. Because the Division adjusts the required amount each year based on the preceding year's activity, a fast-growing shop can move up a tier at renewal — and the higher bond has to be on file for the license to renew. Treat the volume threshold as a renewal deadline, not a one-time calculation at first licensing.

The bond runs to the Superintendent of the Iowa Division of Banking as obligee — §535B.9 requires an applicant to file a bond from a surety company authorized to do business in Iowa. In practice you file it through NMLS as an electronic surety bond (ESB) alongside your Iowa company license, because the Division of Banking administers 535B licensing through the Nationwide Multistate Licensing System. We place the Iowa-accepted bond form and post it electronically so the bond is on record before the Division approves or renews the license.

You pay a premium, not the full penal sum. For a $100,000 bond, a well-qualified applicant usually pays about 1% to 3% — roughly $1,000 to $3,000 a year — and the rate is driven mostly by personal credit and business financials, not by the state. Weaker credit pushes the rate higher; strong credit and seasoned financials pull it toward the low end. A $150,000 tier bond costs proportionally more at the same rate. Because the bond amount itself is fixed by statute, shopping the rate across carriers is where the real savings come from.