What Is a Georgia Mortgage Broker Bond?
In most states, mortgage brokers need to go through a licensing process with relevant state authorities. You have to post a mortgage broker bond to meet the licensing requirements in Georgia.
The purpose of the broker bond is to safeguard the interests of the general public and the state. It guarantees your legal compliance and ensures a compensation via a bond claim in case you transgress from your obligations.
Your bond is a contract between three parties, just like other surety bonds. The principal is your mortgage brokership that has to satisfy the bonding requirement.The Department Banking and Finance is the obligee that imposes the bond criteria. The entity that gets you bonded is the surety.
Frequently Asked Questions
When do you need to get bonded?
In order to start your mortgage brokerage in Georgia, you have to obtain a state mortgage broker license from the Department of Banking and Finances. The actual licensing is conducted via the Nationwide Multistate Licensing System & Registry (NMLS). That’s where you need to submit the required $150,000 broker bond as well. It has to be filed as an electronic surety bond (ESB).
The bond is a guarantee that you will follow Georgia laws that govern your trade. Its amount was increased from $50,000 in June 2017 when Georgia House Bill 143 came into effect. You have to renew the bond annually together with your license, which should be done before December 31st of each year.
What is this bond’s cost?
The bond amount that you have to obtain as a Georgia mortgage broker is $150,000. Your bond price is also called the bond premium. It is a small fraction of the required amount. For applicants with stable finances, the percentages are often between 1% and 3%.
What exactly influences your surety bond cost? It depends on the strength of your personal and business finances. Your surety considers your personal credit score, business documents, and any assets or liquidity you may have. The stronger your overall profile is, the lower your bond price can get.
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Georgia mortgage broker bond||$150,000||$750-$1,875||$1,125-$2,250||$3,000-$7,500||$7,500-$15,000|
If I have bad credit, can I still get bonded?
Yes, you can obtain the mortgage broker bond you need even if your finances are far from perfect. Lance Surety Bond operates its Bad Credit Surety Bonds program for applicants with credit score, tax liens, bankruptcies, and civil judgements.
The bond rates are slightly higher and are in the range of 5%-10%. Since the bonding risk is increased, they compensate for it. Our tight collaboration with a number of A-rated, T-listed surety companies allows us to offer you the most appropriate bonding option for your case.
How do I apply?
Our How to Get Bonded page is an extensive resource on the bonding process. Make sure to check it out if you want to learn more about how bonding works.
You can always reach us at (877) 514-5146 if you need help with your application or have further questions.
What happens in case of a claim?
Bond claims are the mechanism through which harmed parties can receive a compensation for damages they have suffered as a result of your unlawful activities. If you do not follow the law that governs mortgage brokering in Georgia, you can get a claim. The claimant can seek a reimbursement up to $150,000, which is your bond amount.
For proven claims, your surety will take over the payments at first. You have to repay it afterwards according to the bond’s indemnity agreement. This makes bond claims a financial and reputational threat that it’s best to avoid.