What are mortgage broker surety bonds?
Mortgage broker surety bonds protect customers from dishonest lending practices performed by mortgage professionals, including:
- knowingly approving the borrower for a loan in an amount that exceeds the borrower’s needs and/or ability to repay
- encouraging the buyer to use fraud during the application process
- pressuring the buyer to buy certain loan products, such as high-risk loans and loans with high interest rates
- establishing an interest rate based on anything other than the borrower’s credit history
- charging unnecessary or additional fees
- targeting vulnerable or at-risk buyers and suggesting cash-out refinances
In most states, mortgage brokers are required to purchase a surety bond before a state business license and a mortgage broker license can be issued. In this case, you — the mortgage broker — are the principal party. By purchasing a mortgage broker, lender and/or servicer bond, you promise the state — the obligee — that you will provide mortgage services ethically and in accordance with the law.
How do you get a mortgage broker surety bond?
To purchase a bond, you need to know what type of bond you need and in what amount. In most cases, the amount of your bond depends your state’s requirements and the average amount of mortgage loan volume you service in one year. Generally, the minimum bond amount is between $10,000 and $50,000.
The bonding process is simple. When you’re ready to purchase your bond — which must occur before the end of this month if you’re a mortgage broker in Michigan or Mississippi — call SuretyBonds.com at 1 (800) 308-4358, or fill out a contact form online. One of our expert surety specialists will walk you through each step of the bonding process. You’ll be approved for your bond following a credit check and financial screening. Once your payment has been received, your specialist will execute your bond and mail it to you. If you need your surety bond as soon as possible, you can choose our overnight shipping option and have the bond in your hands tomorrow.
Michigan mortgage professionals will submit their original bond forms to:
Office of Financial and Insurance Regulation
P.O. Box 30220
Lansing, MI 48909
Mississippi mortgage professionals will submit their original bond forms to:
Department of Banking and Consumer Finance
501 N. West St.
Jackson, MS 39225