What Is an Escrow Agency Bond?
Escrow agencies and agents need to get bonded in a number of states across the country. It is a typical licensing requirement for escrow professionals. You have to provide this license bond in a form and amount set by the relevant state authorities.
What’s the purpose of the bonding? In case you transgress from your legal obligations and engage in unlawful practices, such as hiding escrow records and not depositing all monies, you may get a claim against your bond. This is a security mechanism that allows harmed parties to demand a fair reimbursement for suffered losses.
Your escrow agency bond works like a contract between three parties. The principal that has to obtain a bond is your escrow agent business. The state authority that requires you to get bonded is the obligee. The surety provides you with the bond.
Questions about Escrow Agency Bond
Which states require an escrow agency bond?
Escrow agents in the state of Washington have to post a $10,000 surety bond as a part of their licensing.
Arizona escrow agents need to provide a $100,000 bond to the state Department of Financial Institutions. You need to use the official bond form.
Escrow agents in Oregon need to post a $50,000 bond to the state Real Estate Agency.
Escrow licensees in California need to post a surety bond. You have to present it to the Department of Business Oversight.
The Idaho Department of Finance requires escrow agents to provide a $20,000 surety bond prior to conducting operations in the state.
Escrow agents in Utah have to post a surety bond in an amount between $10,000 and $50,000, which is set on the basis of monthly average escrow liability.
How much does it cost to get bonded?
You need to cover only a small fraction of the bond amount that you are required to post as a part of your state’s licensing requirements. This is the bond premium, which depends on your personal and business finances.
When you apply with a surety, it has to consider a number of factors in order to assess and set your surety bond cost. Your personal credit score plays a central role in this process. Other important criteria are your business financials, as well as liquidity and assets and even your business knowhow. The more stable your overall profile is, the less you’re likely to pay for getting bonded. For applicants with stable finances, the typical rates are between 1% and 5%.
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Arizona Escrow Agency Bond||$100,000||$750-$1,500||$1,000-$2,500||$2,500-$5,000||$5,000-$10,000|
|Oregon Escrow Agency Bond||$50,000||$375-$750||$500-$1,250||$1,250-$2,500||$2,500-$5,000|
|Idaho Escrow Agency Bond||$20,000||$150-$300||$200-$500||$500-$1,000||$1,000-$2,000|
|Washington Escrow Agency Bond||$10,000||$100-$150||$100-$250||$250-$500||$500-$1,000|
|Utah Escrow Agency Bond||$10,000
What happens in case I have bad credit?
It is possible to obtain an escrow agency bond, even if you are facing financial issues. Lance Surety Bonds runs its Bad Credit Surety Bonds program to provide a bonding option for applicants with low credit scores, tax liens, bankruptcies, and civil judgements.
The bad credit bonding rates are higher because of the increased risk involved. You can expect premiums between 5% and 10%. But don’t worry about your costs - we’ll make sure you pay the cheapest possible price. We work with numerous A-rated, T-listed surety companies, so we can select the right bonding option that fits your situation.
How do I apply for my escrow agency bond?
We have prepared a detailed How to Get Bonded page that provides a thorough overview of the bonding process.
In case you have more questions or need assistance, our bonding experts are here to help. Just contact us at (877) 514-5146.