Arkansas Mortgage Broker Bonds Overview
Mortgage brokers in Arkansas have to get a state license prior to launching their operations. The process entails posting a mortgage broker bond.
Similarly to other surety bonds, this bond serves as an extra layer of protection for the state and your customers. By obtaining it, you provide an additional guarantee that you will comply with all applicable rules and regulations.
The bond functions as a legal agreement between your mortgage brokerage and two other entities. Your business is the principal, the Arkansas Securities Department is the obligee, and the surety is the bond provider that covers the cost of any problems that might arise while you are in business in order to protect the public.
Questions about Mortgage Broker Bonds in Arkansas
When do you have to provide this bond?
In order to obtain an Arkansas mortgage broker license, the state Securities Department requires that you post a $100,000 surety bond. The licensing is conducted through the website of the Nationwide Multistate Licensing System & Registry (NMLS). Your bonding ensures that you will follow the Arkansas Fair Mortgage Lending Act, and any other relevant laws.
What is the surety bond cost?
The bond amount that you have to post as an Arkansas mortgage broker is $100,000. However, you have to cover only a portion of it, called the bond premium. The bonding rates are between 0.75% and 5% for applicants with good finances.
The exact formulation of your surety bond cost depends on a thorough review of your personal credit score, company finances, and any assets and liquidity that you may have. Your surety assesses these factors in order to determine the bonding risk involved. The lower it is, the less you will pay for getting bonded.
|Arkansas Mortgage Broker Bond Cost Based on Credit Score|
|Bond Name||Bond amount||Credit Score|
|Above 700||Between 650-699||Between 600-649||Below 599|
|Arkansas mortgage broker bond||$100,000||$500-$625||$750-$1,500||$2,000-$5,000||$5,000-$10,000|
Can I obtain the needed bonding with bad credit?
Yes, you can get bonded even with problematic finances via our Bad Credit Surety Bonds program. It's designed to provide a bonding option for applicants with a low credit score, tax liens, bankruptcies, and civil judgements.
As the bonding risk is higher, the rates are between 5%-10%. Since we collaborate with numerous A-rated and T-listed surety companies, we are able to shop around and offer you the best type of bond for your specific circumstance.
How does the bonding process work?
Would you like to gather further information about the bonding process? Make sure to consult our in-depth guide on the How to Get Bonded page.
Our bonding experts are available to assist you with any queries you may have. Just contact us at (877) 514-5146.
How are bond claims handled?
The mortgage broker bond that you obtain as an Arkansas mortgage professional guarantees that your customers are protected in case you transgress from your legal obligations. Thus, if you fail to follow the law, you can end up with a claim against the bond.
The maximum compensation that harmed parties can demand is $100,000, which is the bond amount you have posted. At first, your surety may cover the costs on proven claims. However, you are liable to reimburse it in full thereafter, as per the bond indemnity agreement. That's why it's best to avoid situations that can give rise to claims. They can harm both your finances and your business reputation.