In the wake of the recession, reports of mortgage servicer companies mishandling accounts and using inappropriate business practices have substantially increased. To combat this problem, Texas established a new registration process for mortgage loan servicers and originators who work in the state. The law, which went into effect on September 1, 2011, includes a Texas mortgage loan originator bond requirement.
The surety bond requirements are as follows.
- The surety bond amount cannot exceed $200,000.
- The surety bond amount cannot exceed $25,000 if the servicer’s volume of sales is less than $1 million per year.
Once mortgage professionals have obtained the required Texas mortgage loan originator bond, they must register with the state Department of Savings and Mortgage Lending. The agency will then have the ability to investigate consumer complaints and claims and impose penalties on mortgage professionals who engage in abusive practices.
The Texas Senate Business and Commerce Committee is confident this law will provide protection from several types of mortgage abuse, including loan modifications that increase monthly payments, failure to credit customers for payments made and failure to recognize existing insurance policies.
If you’re a mortgage servicer or originator who works in Texas and you need a bond, you can contact a surety specialist online or by phone at 1 (800) 308-4358.