Broker Bonds

Mortgage Broker Surety Bond

Mortgage Brokers cannot operate without a Mortgage Broker Surety Bond, which guarantees their license and provides consumers with a degree of protection against fraud or noncompliant activity.

New Mortgage Brokers will fork over anywhere from $10,000 to $50,000 for a surety bond, but premiums vary by state. Rates remain in a state of flux because of the economy and credit environment.

These specific bonds allow states and municipalities to recoup expenses and fines if a Mortgage Broker engages in bad behavior, including pressuring borrowers, charging unnecessary fees or even encouraging borrowers to lie.

Insurance Broker Surety Bond

Insurance Brokers are required to hold an Insurance Broker Surety Bond. These specialized bonds guarantee that brokers account for premiums and protect the public against unethical or fraudulent actions on the part of the broker.

Insurance Broker Bonds also protect companies that sell insurance products to brokers.

Brokers are typically on the hook for the face value of the bond, which varies based on anticipated volume of business. Insurance brokers with less than sterling credit should expect to pay higher rates through a company specializing in high-risk bonds.

Surplus Lines Broker Surety Bond

Surety Bonds for Surplus Lines Brokers ensure that brokers follow all pertinent laws and regulations. These ultra-specialized bonds help protect consumers with surplus lines insurance.

Surplus Lines Broker Surety Bonds guarantee that brokers report all amounts collected correctly. They have become increasingly important because the Insurance Guaranty Association doesn't protect these policies in most states.

These bonds provide consumers with financial protection in the event of default or some other unforeseen catastrophe.

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