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A mortgage broker bond is a type of surety bond that is required in order to obtain a license to operate as a mortgage broker in some states. The purpose of the bond is to protect consumers from financial harm caused by the actions of the mortgage broker.
To obtain a mortgage broker bond, you will need first to determine if your state requires a mortgage broker bond and, if so, how much coverage you need. You can usually find this information on the website of your state’s regulatory agency, such as the Department of Financial Services or the Department of Real Estate.
The cost of mortgage broker bonds can vary depending on the state and the credit of a mortgage broker. Each state requires a unique bond amount for mortgage brokers in order to operate in the industry. However, the principal doesn’t need to pay the entire surety bond amount but rather just the premium.
The cost of the mortgage broker bond premium is determined by sureties and usually depends on the bond amount and the financial history and the credit score of the principal. Most sureties determine the rate between 0.5% to 3% of the total bond amount, but it all depends on the individual client.
A mortgage lender bond offers protection to the mortgage lender’s clients and the state against frauds and state law violations. The agreement is meant to ensure a mortgage lender’s compliance with all the industry standards and regulations within a particular state. In fact, all states demand this surety bond type as a work license. Without it, a mortgage lender can’t operate legally in the industry.
Mortgage lender bonds protect customers from illegal and unethical practices during the mortgage lending process. Although the bond terms can differ, most of them include protection in case of frauds such as charging unnecessary fees, pressuring buyers into purchases, basing the interest rate on factors other than the credit score, and more.
Applying for a mortgage lender bond is simple when you choose Bonding Solutions. We have an easy online application or you can call us directly to speak with a bond specialist. Bonding Solutions is a leading bond agency, licensed to write surety bonds in all 50 states. We have bond programs available to meet the needs of each of our clients and ensure the lowest rates on the market. We provide quick turnarounds and always provide the best bond services in the nation. Contact us today to learn more!Get Started