Michigan Mortgage Broker Bonds Explained
Mortgage brokers in Michigan need to pass a licensing procedure set by state authorities. Among the main criteria you need to satisfy is to get a mortgage broker bond.
The bonding requirement aims to provide an additional layer of security for the state and for your customers. It ensures you will follow the law in your work as a mortgage broker.
In the three-party contract that the bond represents, your mortgage brokerage is the principal. The Michigan Department of Insurance and Financial Services is the obligee that requires the bond. The surety is the bond provider that backs your business.
Questions about Mortgage Broker Bonds in Michigan
When do I need this bond?
One of the essential Michigan mortgage broker license requirements that you have to fulfill is to post a $25,000 surety bond. It is required for first and second mortgage broker licenses, as well as for combined broker and lender licenses. The bond guarantees the licensee’s compliance with the Michigan Mortgage Brokers, Lenders and Servicers Licensing Act, and other applicable laws.
The Nationwide Multistate Licensing System & Registry (NMLS) handles the licensing process for all applicants. The state authority that sets the requirements, however, is the Michigan Department of Insurance and Financial Services.
How much does the bonding cost?
In order to obtain a Michigan mortgage broker license, you have to provide a $25,000 surety bond. You only have to pay the bond premium, which is a small fraction of the required amount. It depends on your financial strength.
What factors affect your surety bond cost? The most important ones include your personal credit score, business finances, and fixed and liquid assets that you may demonstrate. The surety that you apply with examines these indicators to evaluate the bonding risk involved. You are likely to get a lower premium if your finances are stable.
|Michigan Mortgage Broker Bond Cost Based on Credit Score|
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|1st and 2nd mortgage broker license bond, mortgage broker/lender license bond||$25,000||$150-$313||$188-$375||$500-$1,250||$1,250-$2,500|
Can I get bonded with bad credit?
Yes, you can still obtain a bond even if your finances are not stellar. Lance Surety Bonds runs its Bad Credit Surety Bonds program for applicants who face low credit scores, tax liens, bankruptcies, and civil judgments.
The bad credit premiums are in the range of 5% to 10%. Still, we are able to offer you a top bonding option. This is possible due to our excellent partnerships with a number of A-rated, T-listed surety companies.
How do I get my bond?
It is easy to get started with your bonding. Just fill out our online application form (it takes 5min) and attach your documents. Then we’ll get in touch with an exact quote. If you’re satisfied with it, you can purchase the bond straight away. We will send you both a digital and a paper version.
Want to learn more about the bonding process? Don’t miss our detailed How to Get Bonded guide.
If you have further questions, you can reach us at (877) 514-5146.
How are bond claims handled for mortgage brokers?
A claim can be brought against your surety bond if you fail to follow the law in your operations as a mortgage broker in Michigan. Harmed parties can demand compensation of up to the bond amount, which is $25,000. You are liable to cover these costs if the claim is proven.
Your surety may initially pay the reimbursement, but you need to repay it fully soon after. Thus, the responsibility for claims remains yours, so they can be harmful for your business.
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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!