Virginia Mortgage Broker Bonds Explained
If you want to launch a mortgage brokering business in Virginia, you have to pass a licensing procedure with state authorities. It includes posting a mortgage broker bond.
The purpose of the bond requirement is to provide an additional safety layer for the state and your customers. If you fail to follow the law as a mortgage broker, the bond can provide fair compensation to harmed parties.
In essence, your mortgage broker bond works as a contract between three entities. The principal that needs the bonding is your company. The obligee is the Virginia State Corporation Commission. The surety is the third party, which extends the bonding coverage to you.
Questions about Mortgage Broker Bonds in Virginia
Who needs to get this bond?
In order to get your Virginia mortgage broker license, you have to obtain a $25,000 surety bond. It is one of the indispensable requirements imposed by the State Corporation Commission for the licensing of mortgage brokers who want to operate on the territory of Virginia. The bond guarantees your compliance with the Code of Virginia, Title 6.2, Chapter 16. The actual licensing process is conducted via the website of the Nationwide Multistate Licensing System & Registry (NMLS).
How much does the bonding cost?
Virginia mortgage brokers are required by the state to obtain a $25,000 surety bond. The process entails covering a bond premium, which is a fraction of this bond amount. The rates for applicants with stable finances are in the range of 0.5% and 5%.
How exactly is your surety bond cost determined? The factors that influence it include your personal credit score, company finances, and fixed and liquid assets that you may have. The surety that you apply with considers these indicators and thus assesses the level of risk. The lower it is, the smaller your premium would be.
|Virginia Mortgage Broker Bond Cost Based on Credit Score|
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Mortgage broker bond||$25,000||$125-$312.5||$187.5-$375||$500-$1,250||$1,250-$2,500|
What if I have bad credit?
You can still obtain your Virginia mortgage broker bond despite financial difficulties you may be facing. Lance Surety Bonds' Bad Credit Surety Bonds program is designed for applicants struggling with low credit scores, tax liens, bankruptcies, and civil judgments.
Due to the higher bonding risk, the rates you can expect are between 5% to 10%. Nevertheless, we are able to offer you a top premium. We collaborate with a number of A-rated, T-listed surety companies, which allows us to shop around for you.
How do I get my bond?
It is easy to get started with your bonding. You can complete our online application form (it takes 5min) and attach the required paperwork. Then we will send you a bond quote. If you're happy with it, you can buy the bond straight away. We will provide you with a paper and a digital version of it.
Do you want to delve into the nitty-gritty details of the bonding procedure? Make sure to consult our extensive How to Get Bonded page.
You can also speak with our bonding experts by calling us at (877) 514-5146.
What happens in case of a claim against my bond?
The goal of the surety bond that you obtain is to protect the interests of your customers against potential illegal activities on your side. If you fail to follow applicable laws and a party is harmed as a result, they can file a claim against your bond. The maximum compensation they can seek is the bond amount you have obtained, which is $25,000 in this case.
For proven cases, the surety that bonded you may step in to cover the costs. Then you will need to reimburse it fully, as per the bond indemnity agreement. Thus, the full responsibility for bond claims remains with you, so it is best to avoid them as much as possible.
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What Our Clients Have To Say?
Kimberlee AblesQuick 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!
Andrew PoincotLong 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!
Margie MartinezWe decided for Lance Surety Bond's quote for 2 reasons; Price and Customer Service. Our Representative Ryan was just SUPERB!! [...] I highly recommend Lance Surety Bond for all your Bonding needs! I'll definitely come back for all of mine. :-) Thanks Ryan!