What is a Mortgage Broker Bond?
Mortgage Brokers are real estate financing experts that help people find and negotiate financing terms for their specific mortgage. In addition to being licensed, mortgage brokers must also post a surety bond to ensure compliance with state regulations governing this line of business. These bonds are required by states to protect consumers that are in the process of obtaining mortgages. Our agency has a variety of programs designed to get all types of Mortgage Brokers approved at excellent rates. Also known as Loan Broker Bonds, Mortgage Loan Originator, and Residential Mortgage Originator Bond.
Questions about Mortgage Broker Bonds
How do I become a Mortgage Broker?
Mortgage Broker licensing requirements differ by state. However, the general criteria to become a licensed broker is similar throughout the nation. For most states, prelicensing requirements consist of completing an approved mortgage broker course that covers issues such as state laws and ethical responsibility. Upon completion of the course, brokers will need to submit the state’s license application, along with a licensing fee. Additionally most state’s also require a surety bond to filed with the license.
How much does a Mortgage Broker Bond cost?
Annual premium amounts are determined based on owner personal credit. Brokers with stellar credit may be eligible for standard market rates, which range from 1% to 3% of the total bond amount. If the owner has a low credit score, or derogatory items on their credit report, annual premium typically ranges between 5% to 10% of the bond amount. In most states, we can approve higher risk applicants at no higher than 7.5%.
If I have bad credit, can I get a Mortgage Broker Bond?
Yes. While many sureties only offer quotes to customers with stellar credit, Lance Surety has a variety of Mortgage Broker Bond programs that allows us to approve over 99% of applicants instantly through our online application. Your annual premium will depend on your individual credit profile, but we’re able to offer very aggressive rates to mortgage brokers.
What can I do to lower my rate?
While our agency offers instant quotes based on owner personal credit, it is possible to lower the cost of your Mortgage Broker Bond by providing additional information. For example, if you have strong liquid assets and can provide cash verification, that could be used to strengthen your application. Strong business and personal financial statements can also be considered in determining your rate.
Do I need a physical office in a state to become licensed and bonded?
Not necessarily. This depends on what state you are trying to become licensed in. In the past, this was a standard state requirement, but as more business is being conducted over the internet, many states’ mortgage licensing laws are becoming more lenient. As each state’s laws differ, you’ll want to check specific state requirements to make sure you meet their criteria.
Will one Mortgage Broker Bond cover multiple states?
No. You'll need to post a separate mortgage broker bond for each state that you plan on conducting business in. These are state requirements, so be sure to check with each state for their specific license and bond requirements to ensure compliance.