Missouri Mortgage Broker Bonds
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Missouri Mortgage Broker Bonds Explained
If you want to start a mortgage brokering business in Missouri, you have to undergo a state licensing process. It entails posting a mortgage broker bond.
The purpose of the bond requirement is to provide a safety mechanism for the state and for your customers. It protects against illegal activities that you may commit in your capacity as a mortgage professional.
Your business is the principal in the three-party contract that a surety bond constitutes. The obligee is the Missouri Division of Finance, which sets the licensing criteria. The third entity is the surety, which gets you bonded.
Questions about Mortgage Broker Bonds in Missouri
When do I need to obtain this bond?
Missouri mortgage brokers need to provide a surety bond as a part of the licensing process with the state Division of Finance. The procedure is handled via the Nationwide Multistate Licensing System & Registry (NMLS). The bond ensures you will comply with Chapter 443 of the Missouri Revised Statutes, as well as any other applicable rules and regulations.
How much does the bonding cost?
In order to obtain a Missouri mortgage broker license, you have to provide a surety bond between $50,000 and $250,000. The exact bond amount is based on your annual volume of brokered loans. In order to get bonded, you have to pay a bond premium, which is a small percentage of it.
What indicators influence your surety bond cost? Your surety needs to take into consideration your personal credit score, business finances, and any fixed and liquid assets you may demonstrate. This is how it can assess the level of the bonding risk. The lower it is, the smaller your premium would be.
|Missouri Mortgage Broker Bond Cost Based on Credit Score|
|Yearly volume of brokered loans||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Less than $15 million||$50,000||$250-$625||$375-$750||$1,000-$2,500||$2,500-$5,000|
|$15 million to $22.5 million||$75,000||$375-$938||$562-$1,125||$1,500-$3,750||$3,750-$7,500|
|$22.5 million to $30 million||$100,000||$500-$1,250||$750-$1,500||$2,000-$5,000||$5,000-$10,000|
|$30 million to $45 million||$150,000||$750-$1,875||$1,125-$2,250||$3,000-$7,500||$7,500-$15,000|
|$45 million to $60 million||$200,000||$1,000-$2,500||$1,500-$3,000||$4,000-$10,000||$10,000-$20,000|
|More than $60 million||$250,000||$1,250-$3,125||$1,875-$3,750||$5,000-$12,500||$12,500-$25,000|
What if my credit is bad?
Lance Surety Bonds runs its Bad Credit Surety Bonds program for applicants who struggle with issues such as low credit scores, tax liens, bankruptcies, and civil judgments.
The rates you can expect are between 5% to 10% due to the higher bonding risk. As we work with numerous A-rated, T-listed surety companies, you can still get a top bonding option with us.
How do I obtain a mortgage broker bond?
The first step to getting bonded is to complete our online application form (it takes 5min). We can provide you with an exact quote once we have all your documents. Then you can buy your bond online.
For further information about the way bonding works, you can consult our detailed How to Get Bonded page.
In case you need help, you can speak with our bonding experts by calling us at (877) 514-5146.
What happens if I receive a claim?
The surety bond works as protection for your customers and not for your business. Thus, if you fail to follow the law in your operations as a mortgage broker in Missouri, you can end up with a claim. This is how harmed parties can demand fair reimbursement, which can be up to the bond amount you have posted.
On proven cases, your surety may step in to cover the costs at first. However, as per the bond indemnity agreement, you need to fully repay it afterwards. Thus, claims can cause serious financial and reputational burden for your business, and it's best to avoid them.
What Our Clients Have To Say?
Quick response times and turn around for issuing bonds. Great customer service and very knowledgeable. We have used Lance Surety multiple times and have never been disappointed. Highly recommend them and Collette!
Long story short, these guys cut through the B.S. and get the job done. Responsiveness, excellent! Communication, excellent! Respect for their industry partners, excellent! John, Collette, Ryan, you're all-stars! Thank you!
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