Pennsylvania Mortgage Servicer Bonds Explained
Pennsylvania mortgage servicers need to undergo a licensing procedure with state authorities which entails providing a mortgage servicer bond.
The bonding requirement serves as a protection mechanism that safeguards the interests of the state and the general public. It ensures that licensed servicers will act in accordance with applicable laws.
The surety bond works as a three-party contract. Your business is the principal. The obligee that sets the licensing criteria is the Pennsylvania Department of Banking and Securities. The surety is the third entity, which is the bond provider.
Questions about Mortgage Servicer Bonds in Pennsylvania
When do I need to get bonded?
In order to obtain a Pennsylvania mortgage servicer license from the Department of Banking and Securities, you have to provide a $500,000 surety bond. The licensing process is conducted via the website of the Nationwide Multistate Licensing System & Registry (NMLS). Your surety bond guarantees you will follow the Pennsylvania Mortgage Licensing Act and all other applicable rules.
What does the surety bond cost?
The bond amount needed for the licensing is $500,000. However, to get bonded, you have to cover a small fraction of it, called the bond premium.
Your surety bond cost is based on a careful analysis of your personal and company financials. The surety that you apply with considers your personal credit score, business documents, and any fixed and liquid assets you may have. By doing this, it assesses the risk involved with bonding you. The lower it is, the smaller your bond premium would be. Applicants with stable finances usually get rates in the range of 0.5% and 5%.
|Pennsylvania Mortgage Servicer Surety Bond Cost Based on Credit Score|
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Mortgage servicer bond||$500,000||$2,500-$6250||$3,750-$7,500||$10,000-$25,000||$25,000-$50,000|
Can I get bonded with bad credit?
It is more difficult to get bonded if your finances are not in the best shape. That's why Lance Surety Bonds operates its Bad Credit Surety Bonds program for applicants with low credit scores, tax liens, bankruptcies, and civil judgments.
The bad credit bonding rates are between 5% and 10% due to the increased bonding risk. We are able to offer you a great bonding rate due to our partnerships with a long list of A-rated, T-listed surety companies.
How do I apply for my bond?
The first step to obtaining your mortgage servicer bond is to complete our online application form (it takes 5min). Once we receive your full documentation, we can offer you a bond quote. If you're happy with it, you can purchase your bond straight away.
Do you want to learn more about the bonding process? Make sure to refer to the extensive guide on our How to Get Bonded page.
If you have further queries, you can get help from our bonding specialists. You can call us at (877) 514-5146.
What if I receive a claim against the bond?
The surety bond that you obtain as a part of your Pennsylvania mortgage servicer licensing does not protect your business. Instead, it functions as an additional safety layer for your customers. Its purpose is to guarantee your legal compliance. In case you fail to abide by the law, a harmed party can file a claim against your bond.
On proven claims, you are liable to pay the costs to the claimant, which can be up to the bond amount of $500,000. The surety that bonded you may cover them at first, but you still need to reimburse it afterwards. As the liability remains with you, it is best to avoid situations that can lead 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!