Mortgage Broker Bonds in Pennsylvania Explained
Mortgage brokers in Pennsylvania, just like in all other states, have to obtain a license prior to launching operations. As a part of this process, you have to provide а mortgage broker bond if you are planning to accept advanced fees.
The purpose of the bonding requirement is to ensure your legal compliance. If you transgress from your obligations under the law, the bond can provide fair reimbursement to harmed parties.
In practical terms, the bond represents a contract between three entities. The principal that has to provide the bond is your mortgage company. The Pennsylvania of Department of Banking and Securities is the obligee, while the surety is the bond provider.
Questions about Mortgage Broker Bonds in Pennsylvania
Who is required to obtain a mortgage broker bond in Pennsylvania?
Mortgage brokers in Pennsylvania who are going to accept advanced fee payments are required to post a $100,000 surety bond as part of their licensing. The process is handled via the Nationwide Multistate Licensing System & Registry (NMLS). The licensing authority on the state level is the Pennsylvania Department of Banking and Securities. The bond ensures your compliance with all applicable laws, including the Mortgage Licensing Act.
How much does it cost to get a mortgage broker bond in Pennsylvania?
In order to get a Pennsylvania mortgage broker license and you plan to accept advanced fees, you have to post a bond amount of $100,000. The cost of the bond is a small percentage of it, called the bond premium. The typical rates are between 0.5% and 5% for applicants with solid financial status.
What factors determine your surety bond cost? The essential ones include personal credit score, business financials, and assets and liquidity that you may have. Your surety needs to examine these criteria to assess the level of bonding risk that you pose. The lower it is, the smaller your bond cost is likely to be. This means that stable finances are a prerequisite for an easy bonding process.
|Surety bond name||Surety bond amount||Credit Score|
|Above 700||Between 650-699||Between 600-649||Below 599|
|Pennsylvania mortgage broker bond||$100,000||$500-$625||$750-$1,500||$2,000-$5,000||$5,000-$10,000|
Can I get bonded with bad credit?
It is possible to obtain a mortgage broker bond in Pennsylvania even if your finances are not perfect. Lance Surety Bond operates its Bad Credit Surety Bonds program to offer a bonding option for applicants with issues such as a low credit score, tax liens, bankruptcies, and civil judgements.
The bonding risk for bad credit bonds is higher. To mitigate this, the bond rates range between 5% to 10%. As we foster close partnerships with a number of A-rated, T-listed surety companies, we are able to provide you with a top bonding rate despite your financial situation.
How do I get a mortgage broker bond?
Interested in learning more about the way bonding works? We have devised a detailed How to Get Bonded page that you can refer to.
Do you have further questions? Don’t hesitate to contact us at (877) 514-5146. Our surety bond experts will gladly help you out.
How are bond claims handled?
Unlike insurance, your Pennsylvania mortgage broker bond does not protect your business. Instead, it safeguards the interests of the state and your customers. If you fail to abide by the law and this causes damages to a party, they can seek a fair reimbursement via a bond claim.
Initially, the surety examines the validity of the claim. If it is proven, you are liable to cover a compensation up to the penal sum of your bond, which is $100,000 in this case. Your surety may pay the sum at first, but you have to repay all costs soon after. As a result, it’s best to avoid situations that can give rise to claims.
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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!