Michigan Mortgage Broker Bond

 Anyone operating as a mortgage broker, lender, servicer, or loan originator in Michigan must post a surety bond before receiving a state license. The bond protects borrowers and the public by ensuring the licensee complies with Michigan’s mortgage laws and fulfills all financial obligations. In this guide, you’ll learn who needs the bond, how much it costs, how to file through NMLS, and how to apply through our online application in minutes.

A Michigan mortgage broker bond is a surety bond required by the Mortgage Loan Originator Licensing Act (Act 75 of 2009) and MCL § 493.159. It serves as a financial safeguard for borrowers and the public, ensuring that mortgage professionals operate honestly and comply with all Michigan Department of Insurance and Financial Services (DIFS) regulations.

In practical terms, this bond guarantees that brokers, lenders, and servicers fulfill their duties—such as properly handling funds, following disclosure rules, and avoiding misrepresentation. If a licensee violates these laws and causes financial harm, the surety company can compensate affected parties up to the bond amount.

The Michigan DIFS enforces these requirements to maintain integrity in the state’s mortgage market. Bond amounts depend on the license category and, for originators, on loan volume:

• $25,000 – For a broker or lender license (or combined broker/lender license)
• $125,000 – For a servicer license, or for any licensee also acting as a servicer (the higher amount applies)
• Mortgage Loan Originators (MLOs):
   
  • $10,000 if total annual originations are less than $12 million
  • $25,000 for $12–24 million
  • $50,000 for more than $24 million

Each bond is a condition of obtaining and maintaining a license. Without one, an application cannot be approved. You can review related bond types and coverage options in our mortgage broker bond resource section.

The cost of a Michigan mortgage bond depends primarily on your credit and the required bond amount. Applicants pay a small fraction of the total coverage—known as the premium—typically ranging from 1% to 5% of the bond amount per year.

Applicants with excellent credit can expect rates near the lower end of that range, while those with credit challenges or limited experience may pay slightly more. Here’s what that looks like in practice:

• A $25,000 broker or lender bond may cost $250–$500 annually
• A $125,000 servicer bond may cost $1,250–$3,750 annually
• An MLO bond between $10,000 and $50,000 might cost $100–$800 per year
   

Beyond credit score, other factors influence pricing:

• Business history and years in the mortgage industry
• Financial stability and liquidity of your business
• Bond size and claim history (if applicable)

Because surety underwriting evaluates overall financial responsibility, even new brokers with limited experience can usually qualify. To understand how surety rates are calculated across industries, visit our Surety Bond Cost guide.

Bonds are renewed annually, but continuous coverage is expected to maintain compliance. Renewal pricing often decreases for returning clients with a clean claim record.

If you’re ready to begin, you can apply directly through our online application to receive a same-day quote.

Securing your Michigan mortgage bond is a simple process that can usually be completed within a day. Here’s how to do it:

1. Confirm your license category.
    Determine whether you need a bond for a broker, lender, servicer, or MLO license. The category determines your bond amount and filing requirements.
    
2. Apply through a licensed surety provider.
    Start by completing Lance Surety Bonds’ secure online application. For first-time applicants, our guide on how to get bonded explains the process step by step.
    
3. Underwriting and quote review.
    Once you submit your application, the surety underwriter evaluates your credit history, business background, and financial stability. Most approvals are issued within 24 hours.
    
4. Electronic filing via NMLS.
    Michigan uses the Electronic Surety Bond (ESB) system within the Nationwide Multistate Licensing System (NMLS). After you receive your approved bond, it’s filed directly through your NMLS account, which transmits it to the Department of Insurance and Financial Services (DIFS) automatically.
    
5. Keep your bond active.
    Mortgage license bonds are continuous but require annual renewal. You’ll typically receive reminders 30–60 days before expiration to allow time for re-issuance. Keeping your bond active ensures uninterrupted license validity and compliance with Michigan law.
    

If your business expands or loan origination volume increases, check whether your bond amount must also increase. For MLOs, higher origination volume triggers a bond adjustment threshold, and you’ll need to file an updated bond to stay compliant.

Yes. Even if you’ve faced credit challenges, you can still qualify for a Michigan mortgage bond. Lance Surety Bonds works with multiple A-rated surety companies that specialize in helping applicants with lower credit scores or limited financial history.

Underwriters look beyond your credit score. They also consider factors such as:

• Experience in the mortgage or financial services industry
• Verified business revenue and liquidity
• Prior bonding or licensing record
• Absence of outstanding claims or defaults

While rates for credit-challenged applicants may fall between 5% and 8%, approvals are still common. Our team ensures transparent communication and offers tailored guidance on strengthening future applications. In many cases, maintaining a clean renewal history can help you secure lower rates over time.

What happens if I violate licensing rules – can claims be filed against the bond?

Yes. If a broker, lender, servicer, or loan originator fails to comply with Michigan law—for example, by mismanaging funds or engaging in fraudulent activity—affected parties can file a claim against the bond. The surety company compensates the claimant up to the bond limit, but the bonded licensee is responsible for repaying the surety for any valid claims.

When is renewal due and how often must I renew?

Michigan mortgage license bonds must be renewed annually through the NMLS Electronic Surety Bond (ESB) system. Renewal ensures continuous compliance with the Michigan DIFS licensing requirements. Brokers, lenders, servicers, and MLOs should renew early to prevent licensing interruptions.

What happens if my loan originations exceed the current threshold?

If your annual loan volume grows into a higher category, you’ll need to increase your bond amount. For instance, an MLO moving from under $12 million in originations to over $24 million must raise their bond coverage from $10,000 to $50,000. The updated bond must be filed immediately through NMLS to remain in good standing.

Lance Surety Bonds. (2025). Surety Bond Quote – Online Application. Retrieved October 15, 2025, from
https://www.lancesuretybonds.com/surety-bond-quote

Lance Surety Bonds. (n.d.). How to get bonded.
https://www.lancesuretybonds.com/learn/how-to-get-bonded

Lance Surety Bonds. (n.d.). Surety Bond Cost.
https://www.lancesuretybonds.com/learn/surety-bond-cost

Lance Surety Bonds. (n.d.). Mortgage broker bonds.
https://www.lancesuretybonds.com/license-bonds/mortgage-broker-bonds

Michigan Department of Insurance and Financial Services (DIFS). (n.d.). Mortgage Loan Originator Licensing Act.
https://www.michigan.gov/difs/industry/licensing-cf/mort-loan-org

Michigan Legislature. (n.d.). Act 173 of 1987.
https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-Act-173-of-1987

Michigan Legislature. (n.d.). Secondary Mortgage Act.
https://legislature.mi.gov/Laws/MCL?objectName=mcl-Act-125-of-1981