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California Mortgage Broker Bond?

If you plan to start or continue a career as a mortgage broker in California, you will need a specific type of surety bond throughout. This review covers the important details.

What is a California Mortgage Broker bond?

It holds a mortgage broker accountable if he or she engages in illegal behavior that negatively affects another party, most likely a mortgage seeker. When that happens, a mortgage broker can be held financially liable for the damages. Surety bonds are a way to ensure that victims of unscrupulous mortgage brokers have a way to seek justice and compensation that must be paid by the broker at fault.

How does a California Mortgage Broker Bond work?

If an individual or regulatory agency believes a mortgage broker has broken California state laws, that party may file a claim against the surety bond for damages. The surety agency that backs the bond will launch an investigation. As long as the claim has merit, the surety agency guarantees payment in full. However, the agency does not accept the end financial responsibility. The bonded party, meaning the mortgage broker, must always pay for claims.

Who needs a California Mortgage Broker Surety Bond?

California requires someone to prove they have one of these surety bonds before granting them a mortgage broker's license. It's impossible to get a license without one. Likewise, if a mortgage broker loses bond coverage for any reason, their license becomes invalid as well, making it illegal to conduct any further business. All mortgage brokers in the Golden State should plan to obtain a surety bond and keep it in good standing throughout their career.

Why is it necessary to have a California Mortgage Broker Bond?

Surety bonds like this one discourage the bonded party from doing anything illegal or unethical. By holding them financially responsible for any negative outcomes that result from their behavior, surety bonds help discourage misconduct that could lead to claims. The California mortgage broker bond requirements help to keep professionals honest and regulate the industry as a whole.

Who are the parties involved?

The mortgage broker is just one of three parties:

• Principal - The party the obtains the surety bond and agrees to settle claims - eg. the mortgage broker.
• Obligee - The California state agency that regulates mortgage brokers. The obligee creates the bond requirements. It also has the right to file claims seeking damages.
• Surety - The agency that issues the bond to the principal and settles valid claims filed by the obligee. Whenever the surety pays to settle a claim, the principal must repay that debt with interest and fees added.

How much does a California Mortgage Broker Bond cost?

Mortgage brokers need a bond valued at $25,000. The cost of that bond (called the premium) is a small percentage of the bond's value. Every bond applicant pays a different amount because their credit score determines the exact cost. Someone with bad credit will pay more, but they won't necessarily be denied. Not when they work with Viking Bond Service.

How to apply for a California Mortgage Broker Bond

As you're preparing to obtain a surety bond, make sure you have these documents ready:

• A completed bond application
• A copy of the California mortgage broker bond requirements
• A personal financial statement
• A copy of any other documents the surety agency requests

Once you apply, underwriters at the surety agency will evaluate your credit risk and, based on that risk, quote you a cost for the surety bond premium. You will receive a document to prove you have a bond once you pay the quoted price to activate the bond.

Viking Bond Service for California Mortgage Broker Surety Bonds

Viking Bond Service has all the resources to become your lifelong bond partner. Count on us to make bonding easy, transparent, and affordable. If you have questions about anything, our team is eager to provide customized answers. Call us at 1-888-278-7389 or send your questions through the form on this page. To get a surety bond quote in as little as 24 hours, complete our online bond application whenever you're ready.