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Mortgage Broker Surety Bonds
What is a mortgage broker surety bond?
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."
Why do I need a mortgage broker surety 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.
How much does a mortgage broker bond cost?
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%.
| State | Bond Amount | Cost* (Annual Premium) |
|---|---|---|
| Arizona | $10,000 / $15,000 | $100 / $150 |
| Connecticut | $50,000 / $100,000 / $150,000 | Varies* |
| Colorado | $25,000 | $188 – $250 |
| Delaware | $25,000 | $188 |
