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New York mortgage broker bond

Mortgage brokers in New York require a specialized type of surety bond before they're granted a license or a license renewal. To put it simply, you can't be a mortgage broker in New York without a surety bond. This guide explains why.

What is a New York mortgage broker bond?

When a mortgage broker violates New York laws applicable to the mortgage industry, the surety bond holds them financially accountable. Under the terms of the bond agreement, the bonded party (eg. the mortgage broker) must compensate anyone hurt by their misbehavior with an amount equal to the resulting damages.

How does a New York mortgage broker bond work?

When someone, whether an individual or a regulator, believes a mortgage broker violated applicable law, they may file a claim for damages against the surety bond. The surety agency that backs the bond will investigate the claim, then pay a settlement to anyone with a valid claim. At that point, the victim has been compensated. However, the process isn't over until the mortgage broker pays the surety agency back the full amount of the claim with interest and fees included.

Who needs to get a mortgage broker bond in New York?

Anyone who plans to work as a mortgage broker needs one, as does anyone currently working as a mortgage broker. Regulators in New York will not grant someone a mortgage broker's license until they provide proof they've met the New York mortgage broker bond requirements. Likewise, renewing a license requires proof of an active surety bond. For all intents and purposes, having a surety bond is a mandatory part of working as a mortgage broker.

Why do you need a mortgage broker surety bond in NY?

This and all other types of surety bonds protect one party from the misdeeds of another. They also hold the party at fault accountable for their actions. In this way, surety bonds discourage illegal, unethical, or otherwise unwanted behaviors. Since mortgage lending can be a sensitive industry, most mortgage brokers, regardless of where they're located, need a surety bond.

Who are the parties involved in a New York Mortgage Broker Surety Bond?

There are three parties total:

  • Principal - The mortgage broker who obtains the surety bond and pays to settle claims.
  • Obligee - The person seeking damages by filing a claim against the surety bond.
  • Surety - The agency that issues the surety bond to the principal and settles claims with the obligee. Upon settlement, the principal must pay the surety back.

How to apply for a New York Mortgage Broker Bond?

Applying for a surety bond requires several documents: a completed surety bond application, a copy of the surety bond requirements, and potentially a financial statement. Applicants will also need to submit to a credit check and possibly supply additional documentation if the surety asks for it.

How much does a New York Mortgage Broker Surety Bond cost?

Surety bond costs (called premiums) a small percentage of the bond's total value. The exact cost varies depending on the applicant's credit score and financial history. Scores below 700 or a history of bankruptcy will result in higher premiums. However, bad credit doesn't make it impossible to obtain a bond - work with Viking Bond Service for help finding affordable surety bond options regardless of credit.

Viking Bond Service - Serving Mortgage Brokers Across New York

Don't just get a surety bond; get a surety bond partner you can turn to throughout your career as a mortgage broker. Viking Bond Service has all the resources you need. So many that we can deliver you a surety bond quote within 24 hours. Apply here at your convenience. You can also send your questions through the contact form on this page or call use at 1-888-278-7389.

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