Montana Mortgage Broker Bond

It depends on how much you originate. MCA § 32-9-123 sets the broker and lender penal sum by combined annual loan production: $25,000 if that production does not exceed $50 million a year, $50,000 once it passes $50 million but stays at or under $100 million, and $100,000 above $100 million. A brand-new licensee with no prior production starts in the $25,000 tier. Premium — what you actually pay for the bond — usually runs about 1% to 3% of the penal sum per year for well-qualified applicants, so a $25,000 bond commonly costs a few hundred dollars annually, not the full face amount.

This is the part that trips people up. MCA § 32-9-123 does not size the bond per originator or per branch — it tells you to add the annual loan production for every person originating residential mortgage loans and for all business locations of the broker or lender, then apply the schedule to that combined figure. A firm with three loan officers each writing $20 million is at $60 million combined, which lands it in the $50,000 tier even though no single originator crossed $50 million alone. When your production grows across a renewal cycle, re-check which tier the combined number now falls in.

No — servicers bond on a completely different metric. Instead of loan production, a mortgage servicer's penal sum is set by the unpaid principal balance (UPB) it services as of December 31: $75,000 for UPB up to $25 million, $150,000 from $25 million to $100 million, $250,000 from $100 million to $500 million, and $350,000 above $500 million. If you hold both a lender and a servicer license, you are looking at two separate sizing tests — production for the lending side, UPB for the servicing side.

Not necessarily. MCA § 32-9-123 requires every mortgage loan originator to be covered by a surety bond, but it expressly allows an MLO who is an employee of a licensed Montana mortgage lender or broker to be covered by the employer's bond in lieu of a separate individual bond. So a W-2 originator at a bonded company is typically already covered. Independent originators, or those the employer's bond does not extend to, need coverage in their own name. Confirm with your sponsoring company which bond your license sits under before buying anything.

The borrower. MCA § 32-9-123 directs that the bond runs first to the benefit of the borrower harmed by a violation of the Montana Mortgage Act, and then to the benefit of the state and any other person who suffers loss. That ordering matters if multiple parties claim against the same bond: consumer restitution comes ahead of the state and other claimants. The statute also builds in a notice mechanism — the bonded party has to notify the Division within 30 days of commencing a legal action, or of a judgment, on covered claims once they cross the statutory dollar thresholds.

The Montana Division of Banking and Financial Institutions administers the Montana Mortgage Act, and the bond is filed electronically through NMLS like every other state mortgage bond. There is no separate paper filing with a county or the Secretary of State for this bond — the electronic surety bond (ESB) is attached to your company or individual record in NMLS, where the Division verifies it against your license. Keep the bond continuous: a lapse is a licensing problem, not just a paperwork gap.