Mortgage Broker Bonds in Kentucky Explained
Kentucky mortgage brokers have to undergo a state licensing process, similarly to all such professionals across the U.S. Obtaining a mortgage broker bond is one of the major criteria that you have to fulfill to obtain your legal right to operate in the state.
The goal of the surety bond requirement is to ensure that you will follow the law in your activities. It can serve as a safety instrument in case you transgress from your obligations.
The bond that you get works like a contract between three entities. The principal is your business. The Kentucky Department of Financial Institutions is the obligee to which you have to present the bond. The third party is the surety that provides you with the bond backing.
Questions about Mortgage Broker Bonds in Kentucky
Who is required to obtain a mortgage broker bond in Kentucky?
In order to get a Kentucky mortgage loan broker license, you need to post a $50,000 surety bond. The Nationwide Multistate Licensing System & Registry (NMLS) handles the licensing process, while the authority in charge on the state level is the Kentucky Department of Financial Institutions. The bond that you obtain serves as a guarantee that you will comply with the Kentucky Revised Statutes.
How much does it cost to get a mortgage broker bond in Kentucky?
You have to post a bond amount of $50,000. Your bond price is set on the basis of this amount. It is called the bond premium and is a couple of percents of the required sum. Applicants with stable finances get rates in the range of 0.5% to 5%.
What criteria determine your surety bond cost? The most important factors that shape up the price include your personal and business finances. Most significantly, these are your personal credit score, company financials, and assets and liquidity. By examining them, your surety can assess the level of bonding risk. The lower it is, the smaller your bond cost is likely to get.
|Surety bond name||Surety bond amount||Credit Score|
|Above 700||Between 650-699||Between 600-649||Below 599|
|Kentucky mortgage broker bond||$50,000||$250-$312.5||$375-$750||$1,000-$2,500||$2,500-$5,000|
Can I get bonded with problematic finances?
It can be tough to get bonded if you are struggling with financial issues. Lance Surety Bond has designed its Bad Credit Surety Bonds program with you in mind. For applicants with a low credit score, tax liens, bankruptcies, and civil judgements, this is a great bonding option.
Since the bonding risk is higher, the rates range between 5% to 10%. Nevertheless, with us, you are guaranteed a top price. We foster exclusive partnerships with a number of A-rated, T-listed surety companies, which allows us to get you bonded at the best conditions.
How do I apply for a bond?
Interested in learning more about the way bonding works? Don’t hesitate to consult our in-depth How to Get Bonded page.
For further queries or application issues, you can always get in touch with us. Just call us at (877) 514-5146 to get assistance from our bonding specialists.
What happens in case of a bond claim?
Mortgage broker bonds aim to protect the state and its citizens against potential illegal activities that brokers may engage in. A bond claim can be made in case a harmed party has suffered damages due to your unlawful actions.
The surety has to examine the case at first. If it is proven, you have to pay compensation to the claimant. The penal sum is up to the bond amount you have posted, which is $50,000 for Kentucky brokers. At first, your surety may step in to cover the costs. However, you are liable to repay it, as per the bond indemnity agreement. Claims are certainly to be avoided, as they can harm your brokerage financially and in terms of reputation.