What Is a Nevada Mortgage Broker Bond?
Mortgage brokers across the country need to post a mortgage broker bond to get licensed. Brokers in Nevada need to obtain a Nevada mortgage broker bond.
The goal of the bond is to guarantee that brokers will comply with relevant laws, including Chapter 645B of the Nevada Revised Statutes. It guarantees that their customers are protected from any fraudulent practices and unethical conduct.
Nevada mortgage broker bonds work the same way as other surety bonds do. They function as a contract between three parties. Your mortgage brokerage is the principal, the Nevada Division of Mortgage Lending that requires the bond is the obligee, and the surety is the entity which underwrites the bond.
Questions about Mortgage Broker Bonds 2
Who needs to obtain a Nevada mortgage broker bond?
Any business who would like to engage in mortgage brokering in Nevada is required to get bonded in order to obtain a Nevada mortgage broker license. Mortgage agents must be included in the bond form of the company that’s sponsoring them, in order to get their license.
The goal of the bond is to ensure protection for mortgage clients against cases in which the broker approves them for an unaffordable loan, encourages them to lie in their application, commits fraud with high-risk loans or interest rates, or demands superfluous brokering fees.
How much does a Nevada mortgage broker bond cost?
The surety bond price you have to pay depends on the bond amount you need to provide. For Nevada mortgage brokers who have an annual loan production below $20 million, the bond amount is $50,000. For brokers with production above $20 million, the bond requirement is $75,000.
You need to pay a small fraction of this bond amount. This is called the bond premium, and is usually between 1%-5% of the amount.
How is your Nevada mortgage broker bond cost determined? You must submit a complete application to your surety, which has to examine the stability of your business. It assesses your personal credit score, company finances, and assets and liquidity. If your overall status is solid, your bond premium is likely to be lower.
If you need more information about the way your bond price is set, you can consult our surety bond cost page for a full overview.
|Bond Type||Surety Bond Amount||Credit Sore|
|Above 700||Between 650-699||Between 600-649||Below 599|
|Nevada mortgage brokers with an annual loan production below $20 million||$50,000||$250-$625||$375-$750||$1,000-$2,500||$2,500-$5,000|
|Nevada mortgage brokers with an annual loan production above $20 million||$75,000||$375-$937||$562-$1,125||$1,500-$3,750||$3,750-$7,500|
Can I get bonded with bad credit?
Lance Surety Bonds operates its Bad Credit Surety Bonds program, to assist mortgage brokers with low credit scores, tax liens, bankruptcies, or civil judgements with getting the bond they need.
If you’re a bad credit applicant, your premium can be in the range of 5%-10%. The higher price is necessary to counter the increased risk of bonding. Still, with us you are guaranteed a great bonding rate whatever your credit score is. We foster close connections with numerous A-rated, T-listed surety companies, and we can shop around for the best rate for you.
How do I apply for a Nevada mortgage broker bond?
Applying onlinefor a free Nevada mortgage broker bond quote is a straightforward process. If you want to get your exact bond price, you’ll have to submit a full application along with necessary paperwork.
In case you need more information about the bonding process, our How to Get Bonded page has all the facts you’ll need.
Have more questions? Don’t hesitate to call us at (877) 514-5146 and our bonding experts will help you out.
What happens in case of a claim against me?
Your bond does not work like insurance for your brokerage. Instead, it protects the state and your customers. To avoid unpleasant and harmful situations for your business, it’s important to understand how bonding works.
In case you break state rules, an affected party can file a claim against your bond. For example, if you don’t comply with the Nevada Revised Statutes, or you encourage mortgage buyers to obtain a loan you know they cannot repay, a claim can be made.
If the case is proven, the claimants can be reimbursed up to the penal sum of your bond. While your surety will cover the compensation initially, you are liable to repay it afterwards. This means that claims should definitely be avoided, as they can jeopardize your brokerage.