Hawaii Mortgage Servicer Bonds Explained
Hawaii mortgage servicers need to complete a licensing procedure with state authorities prior to launching operations. As a part of this, you have to post a mortgage servicer bond.
The bonding requirement guarantees that you will follow the law in your work as a mortgage servicer. It provides additional protection for the state and your customers.
As the bond represents a three-party contract, your business is the principal that enters an agreement with two more entities. The Hawaii Department of Commerce and Consumer Affairs is the obligee to which you need to present the bond. The third party is the surety, which provides the bond backing.
Questions about Mortgage Servicer Bonds in Hawaii
When is this bond needed?
If you want to obtain a Hawaii mortgage servicer license, you need to post a $100,000 surety bond. It ensures your compliance with Chapter 454M of the Hawaii Revised Statutes.
The Division of Financial Institutions at the Department of Commerce and Consumer Affairs imposes the licensing and bonding requirements. The Nationwide Multistate Licensing System & Registry (NMLS) handles the actual procedure.
How much does it cost to get bonded?
The bond amount that Hawaii mortgage servicers need to provide is $100,000. Your bond premium, however, is only a fraction of this amount. It is determined on the basis of your personal and business finances. The usual rates for applicants with stable profiles are between 0.5% and 5%.
How exactly is your surety bond cost set? Your surety needs to examine your personal credit score, company documents, and any fixed or liquid assets. By doing this, it can assess how risky it is to get you bonded. The lower the perceived risk is, the smaller your bond premium would be.
|Hawaii Mortgage Servicer Bond Cost Based on Credit Score|
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Hawaii mortgage servicer bond||$100,000||$500-$1,250||$750-$1,500||$2,000-$5,000||$5,000-$10,000|
Is bad credit bonding possible?
While it's more difficult to get bonded with financial problems, you can do so via Lance Surety Bonds' Bad Credit Surety Bonds program. If you are struggling with a low credit score, tax liens, bankruptcies, or civil judgments, this is an excellent bonding option.
Since the risk is higher, the premiums for bad credit bonds are between 5% and 10%. As we work with numerous A-rated, T-listed surety companies, we are still able to offer you a great bonding rate that matches your particular circumstances.
How do I get my bond?
Complete our online application form (it takes 5min) to start your bonding process. You will need to provide a full set of documents, so that we can assess your exact bond premium. If you are happy with it, you can purchase the bond online.
The detailed guide on our How to Get Bonded page is an in-depth resource for further information on how bonding works.
If you have further questions, don't hesitate to call us at (877) 514-5146.
What if I receive a claim against the surety bond?
You may end up with a bond claim if you fail to follow the applicable Hawaii statutes or other rules in your operations as a mortgage servicer in the state. This is how harmed parties can demand reimbursement for their losses. The maximum penalty is the bond amount that you have posted, namely $100,000.
If the case against your bond is proven, you are liable to cover the compensation. Your surety may do so at first, but the indemnity remains with you. Thus, all costs ultimately remain your responsibility. Staying away from bond claims can save you financial and business troubles.