Minnesota Mortgage Broker Bond

The legislature restructured the whole tier schedule effective August 1, 2024 (Laws 2024, chapter 114, article 2). Before that date, Minn. Stat. § 58.08, subd. 1a set the floor at $100,000, stepping to $125,000 at $5 million in closed volume, $150,000 at $10 million, and topping out at $200,000 above $25 million. The 2024 rewrite pushed every band up one level and added a new top tier: the floor is now $125,000, and the ceiling for originators doing more than $100 million a year in closed Minnesota loans is $300,000. If you're quoting from an older source that still says "$100,000," it's citing the pre-August-2024 schedule.

Yes — that's how Minnesota structures it, and it's worth understanding before you assume you need your own policy. Minn. Stat. § 58.08, subd. 1a requires the bond to "cover all mortgage loan originators who are employees or independent agents" of the licensed company. Individual MLOs register through NMLS and work under the sponsoring company's license, and the company's single surety bond extends to every originator it sponsors. You don't file a separate personal bond as an employee or independent agent — the obligation, and the cost, sits with the licensed entity.

Your bond has to move up before the next filing closes. Minnesota ties the bond amount directly to the mortgage call report (MCR) you file under section 58.141 — once your reported total dollar amount of closed residential mortgage loans crosses into a higher band ($10 million, $25 million, or $100 million), the statute requires you to "maintain or increase" the surety bond to match. In practice this means a rider or a new bond filed with the department, and any change to the bond itself has to be submitted for the commissioner's approval within ten days. Growing companies should build this into their MCR filing checklist — it's not automatic, and a stale bond amount is a licensing compliance gap even if nothing else about the file has changed.

For servicers, yes — subd. 2 explicitly lets a residential mortgage servicer satisfy the requirement with "a surety bond or irrevocable letter of credit." Subdivision 4 sets the standard: the letter of credit must be clean and irrevocable, carry an evergreen clause that auto-renews annually, and give the department 60 days' notice before it can lapse or be canceled, and the issuing bank needs an investment-grade debt rating. For residential mortgage originators under subd. 1a, the statute's text calls for a surety bond specifically — most originators use the bond rather than a letter of credit, since tying up bank credit capacity against a six-figure LC is usually more expensive than the bond premium.

No — they're two separate subdivisions of the same statute with different tier schedules, and a company that both originates and services loans in Minnesota needs to track both. Subdivision 1a (originators) scales off closed loan volume: $125,000 under $10 million, up to $300,000 over $100 million. Subdivision 2 (servicers) scales off the unpaid principal balance of the servicing portfolio instead: $125,000 under $10 million UPB, $200,000 from $10-50 million, $300,000 above $50 million. The dollar bands look similar at a glance, but the volume metric behind them is different — closed originations for one, outstanding serviced balance for the other.

Financial institutions as defined in Minn. Stat. § 58.02, subd. 10 — banks, savings associations, and credit unions and their subsidiaries, broadly — are exempt from Chapter 58 licensing, and their MLO employees register through NMLS federally instead of holding a Minnesota state license. No state license means no Minn. Stat. § 58.08 bond obligation. That exemption does not extend to non-depository mortgage bankers, brokers, or independent mortgage companies, and Minnesota requires anyone claiming an exemption under section 58.04 to obtain a certificate of exemption from the commissioner rather than simply asserting it.