Iowa Mortgage Broker Bonds Explained
Would you like to start a mortgage brokering business in Iowa? Then you have to go through a state licensing procedure that involves obtaining a mortgage broker bond.
This requirement works as a protection mechanism that safeguards the interests of your customers. It ensures your legal compliance.
The bond represents a contract between your company as the principal, and two more entities. The Iowa Division of Banking is the obligee which requires you to get bonded, while the surety is the bond provider.
Questions about Mortgage Broker Bonds in Iowa
When do I need this bond?
The Iowa Division of Banking requires broker applicants to post a $100,000 surety bond. It is one of the indispensable criteria for obtaining the Iowa mortgage broker license. It ensures you will follow applicable state laws, such as the state Consumer Credit Code, as well as Iowa Statutes, Chapter 535B. The licensing and bonding are submitted via the Nationwide Multistate Licensing System & Registry (NMLS).
What are the bonding costs?
Obtaining an Iowa mortgage broker license entails that you provide a $100,000 surety bond. This is the bond amount, but you only have to pay a fraction of it, called the bond premium.
Your surety bond cost is based on the strength of your finances. When you apply with a surety, it examines your personal credit score, company paperwork, and any fixed and liquid assets. This is how it evaluates the risk involved in the bonding. If your finances are in good shape, the rates you can expect are between 0.5% and 5%.
|Iowa Mortgage Broker Bond Cost Based on Credit Score|
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Mortgage broker bond||$100,000||$500-$1,250||$750-$1,500||$2,000-$5,000||$5,000-$10,000|
Can I get bonded if I have bad credit?
Lance Surety Bonds has created its Bad Credit Surety Bonds program to provide a bonding option for applicants with low credit scores, tax liens, bankruptcies, and civil judgments. If you are facing such issues, you can benefit from this program.
The rates are in the range of 5% to 10%, as the bonding risk is higher in the case of bad credit applicants. Since we work with a number of A-rated, T-listed surety companies, you can still get a top bonding price with us.
How do I get bonded?
In order to launch your bonding process, you can fill out our online application form (it takes 5min). You also have to attach your full set of documents. When we receive your complete information, we can issue your exact quote. You can purchase the bond online afterwards.
Would you like to expand your knowledge about the bonding process? You can refer to our in-depth How to Get Bonded page.
For further questions, don't hesitate to call us at (877) 514-5146.
What happens if I get a bond claim?
The surety bond that you post as a part of your licensing as an Iowa mortgage broker serves as a security mechanism. It protects your customers in case you transgress from your legal obligations. If a party suffers damages, they can bring a claim against your bond to seek fair reimbursement.
Initially, your surety may pay the costs on proven claims. However, you are liable to repay it fully, since this is set in the bond indemnity language. This means that avoiding claims is the best course of action, as they can harm your business' finances as well as reputation.
Still Have Questions? Check Our FAQ Pages
What Our Clients Have To Say?
Kimberlee AblesQuick response times and turn around for issuing bonds. Great customer service and very knowledgeable. We have used Lance Surety multiple times and have never been disappointed. Highly recommend them and Collette!
Andrew PoincotLong story short, these guys cut through the B.S. and get the job done. Responsiveness, excellent! Communication, excellent! Respect for their industry partners, excellent! John, Collette, Ryan, you're all-stars! Thank you!
Margie MartinezWe decided for Lance Surety Bond's quote for 2 reasons; Price and Customer Service. Our Representative Ryan was just SUPERB!! [...] I highly recommend Lance Surety Bond for all your Bonding needs! I'll definitely come back for all of mine. :-) Thanks Ryan!