Wednesday, January 21, 2009

Massachusetts Surety Bonds

If you haven’t obtained one yet, you are now overdue in complying with Massachusetts’ requirement that all mortgage lenders and brokers have a surety bond (you should have had it by December 31, 2008). If you are applying for a new license, the surety bond is part of your application.

The amount of the bond is different for lenders and brokers but for lenders, it is based on your volume of business in Massachusetts. If you are a lender, and the volume of the loans you have closed is reported on your Annual Report for the previous year as between $0-$49,999,999, then you must have the minimum bond of $100,000. If your closed loan volume is between $50,000,000 and $249,999,999, then your bond must be in the amount of $250,000. If you closed loans with a dollar volume of $250,000,000 or more, then you need a $500,000 surety bond.

For mortgage brokers, the amount of the bond is $75,000, regardless of how many Massachusetts loans you brokered in the previous year.

Those licensees who hold both a lender and a broker license need two bonds, a lender bond in the amount that corresponds to its closed loan volume and a $75,000 broker bond.

Both lenders and brokers will be required to submit Continuation Certificates each year to confirm that the surety bond is in effect and that it is in the proper amount.

Thursday, January 8, 2009

It's Annual Reports Season Again

I’ve already received my first annual report form and I know from my calendar system that other states have early annual reporting requirements. Most states require an annual report to be filed, some states require semi-annual reports. The vast majority of the annual reports require information about loans that you closed in the previous year. There are also reporting requirements in some states requesting information about the loan officers that you hired and fired in the last quarter or last year.

If this is your first year filing an annual report in a particular state, it may take you awhile to gather the information that the report asks for. So don’t wait until the last minute to review the report to see what information you need to find. If you have filed a report in prior years, you should have your computers and files stored in such a way that you can access the needed data in minutes (if you don’t, maybe you want to update your technology).

Some of the annual reports require financial information in their format, not your accountants’ format, which means that you are spending a lot of time manipulating the numbers to conform to the categories that your state has on its form. If this is not your area of expertise, hire an outside specialist to handle it for you. Your time is better spent closing loans than puzzling how to complete a form.