Utah Mortgage Broker Bonds Explained
In order to launch a mortgage brokering business in Utah, you have to successfully pass the state’s licensing procedure. Among the main requirements that you need to satisfy is to post a mortgage broker bond.
The goal of the bond criterion is to ensure you will follow the law in your operations as a mortgage loan originator. It provides an extra layer of security for your customers.
The bond constitutes a contract between three entities, with your mortgage brokerage being the principal. The Utah Department of Financial Institutions is the obligee that requires you to get bonded. The surety is the third party that provides the bonding.
Questions about Mortgage Broker Bonds in Utah
When is this bond necessary?
Obtaining a Utah mortgage broker license entails that you post a surety bond. Its amount is set on the basis of your origination volume. The bond guarantees your compliance as a mortgage loan originator with Utah Code, Title 70D, and any other applicable rules.
The Nationwide Multistate Licensing System & Registry (NMLS) executes the licensing procedure for all applicants. The licensing authority that sets the requirements, however, is the Utah Department of Financial Institutions.
How much does the bonding cost?
Utah mortgage brokers have to post a surety bond in an amount between $12,500 and $50,000, which is set in relation with your loan origination volume. To get bonded, however, you have to cover a small fraction of the required amount. It is called the bond premium and depends on the strength of your personal and business finances.
How is your surety bond cost determined? The main factors that shape it include your personal credit score, company finances, and fixed and liquid assets you may have. Your surety analyzes these indicators to assess the level of bonding risk. The stronger your overall profile is, the lower your bond price would get.
|Utah Mortgage Broker Bond Cost Based on Credit Score|
|Loan origination volume||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|$0 - $5 million||$12,500||$150-$156||$150-$188||$250-$625||$625-$1,250|
|$5 million - $15 million||$25,000||$150-$313||$188-$375||$500-$1,250||$1,250-$2,500|
|More than $15 million||$50,000||$250-$625||$375-$750||$1,000-$2,500||$2,500-$5,000|
What if my finances are not perfect?
Getting bonded with bad credit can be tough. That’s why Lance Surety Bonds has designed its Bad Credit Surety Bonds program. It presents a bonding option for applicants with low credit scores, tax liens, bankruptcies, and civil judgments.
Since it is riskier to provide bad credit bonds, the usual rates are higher - between 5% to 10%. Nevertheless, we can still offer you a top rate due to our close partnerships with numerous A-rated, T-listed surety companies.
How to get bonded?
To launch your bonding process, you just need to complete our online application form (it takes 5min). You have to attach your full paperwork, so we can issue your quote. Then you can purchase the bond online, and we’ll send you both a digital and a paper version.
Would you like to learn more about the way bonding works? Don’t miss our in-depth How to Get Bonded guide.
If you have more questions, you can also speak with our bonding experts by calling us at (877) 514-5146.
What happens if I receive a claim against my bond?
The purpose of your mortgage broker bond is to protect your customers and the state against potential unlawful activities on your side. If you transgress from the law, a harmed party can file a claim against you. The maximum compensation they can seek is between $12,500 and $50,000, depending on the bond amount you’ve posted.
If the claim is proven, you are liable to pay the damages. The surety that bonded you may do so at first, but then you need to fully reimburse it. This is set in the bond indemnity agreement. Thus, it is best to avoid problematic situations that can give rise to costly and harmful 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!