A Mortgage Lender Bond is a commercial license surety bond that may be required to become licensed to operate as a mortgage lender.
There are three parties involved in a Mortgage Lender Bond:
Usually, you are required to get a Mortgage Lender Bond before obtaining your license, and you are required to maintain the bond for as long as you retain your license. However, requirements vary in each state. Contact a Viking Bonds agent, and we'll be happy to help you understand your Mortgage Lender Bond requirements.
Mortgage Lender Bonds exist to provide protection to the mortgage lender's clients and the state against any potential loss that occurs due to violations of state laws and regulations committed by the mortgage lender.
Mortgage Lender Bonds protect customers from illegal and unethical practices within the mortgage lending process. The terms of the bonds vary, but they could entitle consumers to financial reparations in the event that a mortgage lender:
Mortgage Lender Bond amounts depend on the state where the mortgage lender acquires the bond. Most of the time there is a legal minimum bond amount, and the actual amount depends on several factors, such as credit history and the amount of loans closed annually. Based on the state and your profile, your bond amount could range from $10,000 to $100,000. The state government agency that administers mortgage licenses typically informs the lender of the amount or calculation.
Mortgage Lender Bonds are charged as a percentage of the bond amount, and depend on your credit. Typically, the bond costs between 1-3% of the total amount of coverage provided by the bond.
Your personal credit is the most important factor determining your ability to obtain a Mortgage Lender Bond.
Mortgage Lender Bonds are generally easy to process, which makes for a quick bonding process. Most of the time you can receive a quote for a Mortgage Lender Bond within 24 hours.
Quotes are available for clients with low credit. In many cases, a bond is not out of reach simply due to bad credit.
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