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Washington DC Mortgage Broker Bond

The nation's capital, like all 50 states, requires mortgage brokers to have a specialized type of surety bond. This is one of many requirements applicable to aspiring and practicing mortgage brokers, but it's also an essential one that's frequently misunderstood. This quick guide outlines everything you need to know about a Washington DC Mortgage Broker Surety Bond.

What is a Washington DC Mortgage Broker Bond?

A surety bond like this one holds a mortgage broker accountable if he or she breaks Washington DC laws applicable to the mortgage industry. If and when a broker steps outside the boundaries of the law, the surety bond holds them financially liable for any damages caused by their actions. Mortgage brokers need to prove they have one of these surety bonds before they're granted a license or a license renewal by the DC Department of Insurance, Securities, and Banking (DISB)- the regulatory agency responsible for the local mortgage industry.

How does a Washington DC Mortgage Broker Bond work?

If someone feels their mortgage broker hasn't followed rules and regulations as required, they may file a claim against the surety bond seeking financial compensation. The DSIB may also file a claim if they have reason to suspect a mortgage broker. Regardless of who files the claim, the surety agency that issues and backs the bond will investigate the claim and settle it in full if the details hold up. The surety agency guarantees payment for any valid claim. Once the claim is settled, the surety agency will focus on collecting whatever amount was paid, plus interest and fees, from the mortgage broker who caused the claim. That person, the bonded party, accepts financial liability as part of the surety bond agreement and must always pay the surety agency back for any settled claims.

Who is Washington DC Mortgage Broker Surety Bond for?

Anyone who currently works as a mortgage broker in Washington DC or plans to will need one of these surety bonds. The DSIB requires proof of a surety bond before issuing a mortgage broker license. It will ask for proof again when renewing the license. It's illegal to work as a mortgage broker without either a surety bond or a license, and there are strict penalties for doing so, ranging from fines to permanent loss of license. Therefore, mortgage brokers need to take the washington dc mortgage broker bond requirements seriously throughout their career.

Who are the parties involved in a Washington DC Mortgage Broker Bond?

There are three parties in all surety bond agreements:

• Principal - The mortgage broker who's required to obtain the surety bond and pay for any valid claims.
• Obligee - The party that files a claim against the surety bond seeking a settlement equal to whatever financial damages the principal caused.
• Surety - The surety agency that issues the surety bond to the principal and guarantees payments to the obligee. Whenever the surety settles a claim, the principal must pay the debt back.

How much does a Washington DC Mortgage Broker Bond cost?

Mortgage brokers need a bond valued at $12,500 if they issued loans collectively valued at less than $1,000,000 in the previous year. Brokers with larger loan volumes will need larger surety bonds, as assigned by the DISB. The cost of the surety bond is a small percentage of the bond's value, typically 2% - 5%, meaning a $12,500 bond may cost less than $500 to obtain. The surety agency determines the exact amount a bond seeker pays based on their credit score and financial history. Bad credit will result in higher bond costs (called premiums). But with the help of the team at Viking Bond Service, bad credit doesn't have to mean being denied a bond.

How and where to apply for a Washington DC Mortgage Broker Surety Bond?

Find a surety agency that's authorized to issue Washington DC mortgage broker bonds. Apply with a completed copy of the surety bond application and a copy of the surety bond requirements written by the DISB. You will also need to submit to a credit check. Some applicants may need to provide a financial statement or other documentation requested by the surety. Based on all this information, underwriters at the surety agency will calculate a quote for the bond premium. Once the premium is paid, the surety agency supplies a certificate the mortgage broker can give to the DSIB proving they have the required surety bond.

Viking Bond Service - Surety Bonds for Mortgage Brokers

Considering how important surety bonds are to mortgage brokers, it's helpful to have a leading surety agency as a partner. That's why so many mortgage professionals in Washington DC and across the country work with Viking Bond Service. Expect us to make the process of getting a surety bond simple and streamlined. We also offer competitive rates and have resources for applicants with bad credit.

Use the contact form on this page to reach one of our surety bond experts, or call one directly at 1-888-278-7389 to ask questions. Or get the surety bond process started now - complete our easy online application at your convenience.