Connecticut Mortgage Broker Bonds Overview
If you want to launch your operations as a mortgage broker in Connecticut, you have to obtain a state license that permits your activities. This entails posting a mortgage broker bond.
The surety bond that you provide serves as an additional layer of protection for the state and for your customers. It guarantees you will follow the law in your mortgage brokering business.
The bond constitutes a contract between your company as the principal, together with two more parties. The Connecticut Department of Banking is the obligee that requires you to get a bond. The surety is the third entity providing the bonding.
Questions about Mortgage Broker Bonds in Connecticut
In which cases do you need to post this bond?
Any person that wants to engage in mortgage brokering in the state needs a Connecticut mortgage broker license. The Connecticut Department of Banking requires a minimum of a $50,000 bond to issue the license, with bond amounts going all the way up to $150,000 depending on your yearly volume of loans. The licensing is handled via the Nationwide Multistate Licensing System & Registry (NMLS). The bond that you obtain ensures your compliance with the Banking Law of Connecticut.
What is the Connecticut mortgage broker bond cost?
The cost of your bond depends on the bond amount that you have to post, which is between $50,000 and $150,000. You will need to pay only a small percentage of it, called the bond premium. If your finances are stable, you can expect to pay between 1% and 5% of the bond amount.
|Connecticut mortgage broker bond amount|
|Yearly business volume||Bond amount required|
|Less than $30 million||$50,000|
|Between $30 million and $50 million||$100,000|
|Above $50 million||$150,000|
The surety bond cost depends on many factors, including but not limited to your personal credit score, company finances, and any assets as well as liquidity you may be able to demonstrate. When you apply, your surety has to examine these indicators to evaluate how risky or not it is to get you bonded. The more stable your finances are, the lower your bond cost is likely to be, and vice versa.
|Connecticut Mortgage Broker Bond Cost Based on Credit Score|
|Mortgage broker bonds based on yearly business volume||Bond amount||Credit Score|
|Above 700||Between 650-699||Between 600-649||Below 599|
|Volume below $30 million||$50,000||$250-$625||$375-$750||$1,000-$2,500||$2,500-$5,000|
|Volume between $30 million and $50 million||$100,000||$500-$625||$750-$1,500||$2,000-$5,000||$5,000-$10,000|
|Volume on or above $50 million||$150,000||$750-$1,875||$1,125-$2,250||$3,000-$7,500||$7,500-$15,000|
What happens if I have problematic finances?
Getting a bond while having bad credit is more difficult, but not impossible. With our Bad Credit Surety Bonds program, you can get bonded even if you have a low credit score, tax liens, bankruptcies, or civil judgements.
Since the bonding risk is increased, the rates are slightly higher - in the range of 5%-10%. We are still able to offer you a top bonding option due to our partnerships with a number of A-rated and T-listed surety companies.
How do I get bonded?
Interested in learning more about the way the bonding process works? Don't hesitate to delve deeper into the extensive guide on our How to Get Bonded page.
In case you have any further inquiries, we are here to help. Just call us at (877) 514-5146 to get in touch with one of our bonding experts.
What is the process if I get a bond claim?
The surety bond that you acquire as a mortgage broker protects your customers in Connecticut against potential illegal activities you may engage in. In such cases, if a party suffers damages due to your actions, they can file a claim against the bond.
At first, the surety that bonded you may step in to cover the costs and thus ensure the claimant receives a fast compensation. However, you will need to repay all sums, as this is declared in the bond indemnity clause. Claims are a serious threat to your business, and they can hamper you from getting bonded in the future.