Mortgage Broker / Lender Bond

What is a Mortgage Broker / Lender Bond?

Mortgage Broker / Lender Bond includes Mortgage Broker Bond, Mortgage Loan Originator Bond, Mortgage Banker Bond, Mortgage Lender Bond, Mortgage Servicer Bond. It is a license & permit surety bond (a type of financial guarantee) required for mortgage professionals in certain states before they can get their licenses.

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Who Need a Mortgage Broker / Lender Bond?

Whether you need a mortgage bond or not depends on two factors

(1). The regulation / requirement of the state/states your mortgage company operates in

Almost all 50 states require mortgage bonds
Contact your state mortgage licensing authority for specific requirements

(2). Your specific mortgage profession. The following mortgage professionals need a mortgage surety bond

Mortgage Brokers: acts as an intermediary between mortgage consumers and mortgage lenders, i.e., banks. Mortgage brokers help would-be borrowers find a lender with the best terms and rates to meet their financial needs. They don't originate mortgages
Mortgage lenders: bank or other financial institutions that provides home loans to borrowers
Mortgage originators: work closely with borrowers to complete the mortgage transaction and are the main point of contact for borrowers who are trying to close mortgage transactions
Mortgage servicers: manage the day-to-day tasks of managing mortgage loans. They are the ones who send mortgage statements to consumers and collect any payments made on mortgages

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Why Mortgage Broker & Lender Bond?

There are two reasons:

1. Mortgage Broker / Lender Bond provides financial guarantee that the mortgage professionals will comply with mortgage laws. If a mortgage professional violates some insurance laws & creates financial harms to his or her client or the general public, the mortgage bond will pay for the damage to the parties harmed to the amount of bond coverage, i.e., ($25,000 mortgage bond amount would provide $25,000 coverage)

Examples of violation of mortgage laws include manipulate rates, intentionally sold unnecessary products, commit to fraud, etc.

2. Mortgage bonds can act as a show of good faith for both brokers and clients. Even if you aren’t required to purchase a mortgage bond in your state, it is always in your best interest to purchase the bond. Not having a mortgage broker bond could mean paying out of your pocket for any claims made against you.

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How much do mortgage broker/lender bond cost

The cost of the surety bonds for mortgage brokers, lenders, originators and servicers depending on two factors

(1). Bond Amount

For example, a California mortgage lender / servicer bond is set to be $50,000 for all lenders/servicers. However, in New York, a mortgage loan originator bond ranges from $10,000 to $100,000, depending on the loan amount of the originator.

(2). Your credit score

Your credit score will determine the premium % of the bond amount. This premium % varies between 0.5% and 3% of the bond amount.

For example, a California mortgage broker bond of $50,000 would only cost $375. A $50,000 Texas Mortgage Loan Servicer Bond also costs only $375

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How to get a mortgage broker/lender bond?

You can get started now by filling out a 2-minute form and you can receive your bond within a few hours. Alternatively, you can call us at 512-856-7739 and get started with your bonding process.