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How much will my New York mortgage broker bond cost?
The cost of mortgage broker bonds in New York is based on the amount of the bond being required by the Department of Financial Services and the qualifications of the applicant. These bonds are subject to underwriting consideration, but highly qualified applicants could qualify for a rate as low as 1-3% of the total bond amount.
What does this bond do?
New York mortgage broker bonds assure that if consumers are wronged in the process of a mortgage transaction, they have a safeguard from unprofessional acts of business and can be compensated for financial losses. Unethical acts covered by this bond include, but are not limited to:
- Defrauding or misleading borrowers and lenders
- Obtaining property by fraud or misrepresentation
- Advertising a product at a low price when it is not available for sale in order to entice customers to buy a more expensive product, otherwise known as “bait and switch” advertising
- Collecting or charging any prohibited fees
If the principal (mortgage broker) violates the terms of his or her bond agreement and a consumer is harmed as a result, the surety will pay for all damages up to the full bond amount; however, the principal is responsible for reimbursing the surety for any money it pays out to consumers.
What’s the fine print?
New York mortgage broker surety bonds will remain continuous unless otherwise canceled by the surety or the principal. If either party decides to terminate the bond early, a 30-day written notice is required to be submitted and filed with the Department of Financial Services prior to cancellation. Please specify the county of residence and of operation at the time of application.
How to become a mortgage broker in New York
It is against the law to conduct business as a mortgage broker without being properly licensed to do so. To obtain a New York mortgage broker license, the applicant must do the following:
- Post a surety bond
- Submit fingerprints and satisfactory background check through NMLS
- Receive a passing score on the nation and state mortgage test
- Furnish proof of financial responsibility, character and general fitness, including a satisfactory credit report
Mortgage Industry Surety Bonds Available Nationwide
Many states have their own surety bond requirements for mortgage professionals. This means mortgage professionals who work in several states often have multiple surety bonds. Use the map below to learn more about mortgage bonds in other states.