Mortgage Broker Bonds in Kansas Explained
As in most states across the country, mortgage brokers in Kansas need to get a license that allows legal operations. Posting a mortgage broker bond is among the main requirements you have to meet in the process.
Authorities require surety bonds in order to ensure an extra level of security for citizens. The bond functions as a safety net in case you transgress from your obligations under the law.
Your bond is, in essence, a three-party contract. The principal is your mortgage broker business. The Kansas Office of the State Bank Commissioner is the obligee that requires the surety bond. The third entity is the surety that backs your brokerage.
Questions about Mortgage Broker Bonds in Kansas
Who is required to obtain a mortgage broker bond in Kansas?
If you want to obtain a Kansas mortgage broker license, you have to provide a surety bond in an amount between $50,000 and $125,000. The exact amount depends on your loan volume, and on whether you have an office in Kansas or not. The Nationwide Multistate Licensing System & Registry (NMLS) handles the actual licensing process, while the Kansas Office of the State Bank Commissioner is the state licensing authority. The bond that you obtain ensures you will comply will all applicable laws and regulations.
How much does it cost to get a mortgage broker bond in Kansas?
The bond cost that you have to cover depends on the bond amount that you are required to obtain. Your mortgage broker bond amount can be one of the following:
$50,000 for applicants with Bona Fide Kansas office
$75,000 for applicants with Bona Fide Kansas office with yearly loan volume above $50 million
$100,000 for applicants with no Bona Fide Kansas office
$125,000 for applicants with no Bona Fide Kansas office with yearly loan volume above $50 million
Your bond premium is only a small percentage of the required bond amount. You can expect a rate between 0.5% and 5% if your finances are in good shape.
How exactly is your surety bond cost set? The most important factors that shape the price include your personal credit score, business financials, and assets and liquidity. By scrutinizing these factors, your surety can assess how risky it is to provide you with a bond. The more stable your overall profile is, the lower your bond cost is likely to be.
|Surety bond name||Surety bond amount||Credit Score|
|Above 700||Between 650-699||Between 600-649||Below 599|
|Kansas mortgage broker bond - Bona Fide state office||$50,000||$250-$312.5||$375-$750||$1,000-$2,500||$2,500-$5,000|
|Bona Fide state office with volume above $50 million||$75,000||$375-$469||$562.5-$1,124||$1,500-$3,750||$3,750-$7,500|
|No Bona Fide state office||$100,000||$500-$625||$750-$1,500||$2,000-$5,000||$5,000-$10,000|
|No Bona Fide state office with volume above $50 million||$125,000||$625-$781||$937.5-$1,875||$2,500-$6,250||$6,250-$12,500|
Is it possible to get bonded with bad credit?
Yes, you can get your mortgage broker bond even with problematic finances. Lance Surety Bond operates its Bad Credit Surety Bonds program for applicants facing issues like a low credit score, tax liens, bankruptcies, and civil judgements.
As the bonding risk is higher, the usual rates are between 5%-10%. Since we foster close partnerships with a number of A-rated, T-listed surety companies, we are still able to offer you a great bonding option, whatever your credit score is.
How do I get my bond?
Do you want to delve into the nitty-gritty details of how bonding works? Don’t miss out our in-depth guide on the How to Get Bonded page.
Have further queries or need assistance with your bond application? You can reach us at (877) 514-5146. Lance Surety Bonds’ experts will help you out.
What if I get a claim against my bond?
The purpose of bonding is to protect the state and your customers against potential illegal activities you may engage in. If this occurs, a harmed party can file a claim against your surety bond.
If the case of a proven claim, you are liable to cover the reimbursement for the claimant. The penalty can be up to the bond amount you have posted, which is between $50,000 and $125,000 for Kansas mortgage brokers. The surety that provided the bond may first step in to pay the claim, but you have to repay it in full. This makes bond claims a financial threat that’s best to be avoided.