A mortgage broker surety bond is a binding legal agreement designed to encourage honest, ethical and legal behavior in how you run your brokerage. If you act in violation of state regulations and cause harm to your clients, the surety that holds the bond can be tapped to compensate them for financial losses. You, the mortgage loan broker or originator, will then be required to pay back the full amount to the surety company.
Mortgage brokers working in Illinois may also know this surety bond by the name “residential mortgage license bond."
Many states require mortgage brokers, or loan originators, to post a surety bond as part of the licensing process to operate a mortgage loan business. You should check the regulations in your state for specifics related to your mortgage brokerage.
Your bond premium can range from .75% to 3%, depending on your personal credit score and on your business’s financial health and history.
Here is a list of the states in which NNA Surety Bonds provides bond policies for mortgage brokers, with premiums as low as .75%.
|Indiana||$60,000||$788 (two years)|
* Cost can vary depending on the bond amount required and your credit rating
State laws regulating mortgage loan professionals vary, but many states require you to get a surety bond for licensing purposes.
Here are some steps to take if you want to qualify for a mortgage broker bond:
We provide surety bonds for mortgage brokers and loan originators in the following states: Arizona, Colorado, Connecticut, Delaware, Idaho, Illinois, Indiana, Kentucky, New Hampshire, New Mexico, New York, North Dakota, Ohio, Oregon, South Carolina, South Dakota, Vermont, Virginia, West Virginia, and Wyoming.
If you are ready to get a surety bond policy, or would like to learn more about the bond coverage required in your state, contact us!
As with all surety bonds, the surety bond for mortgage brokers is a contract among three entities: the principal (your mortgage broker business), the obligee (the state regulating authority), and the surety (the company providing the bond). Should your company violate the terms of your mortgage broker license and damages are awarded, your surety will pay the affected party in the event that you become insolvent. The surety company will still seek reimbursement from you for any losses paid on the claim.