Mortgage Broker Bond
State laws require businesses in many industries to secure a surety bond before a business license can be issued. Mortgage lenders and brokers are required to get a surety bond before obtaining their mortgage broker license, a process that is generally backed by the state department of banking. The bond’s purpose is to ensure the consumer is protected in the event of wrongful practices or fraud on the part of the lender or broker.
Mortgage lender bonds protect customers against dishonest lending practices, including:
- • Knowingly approving the borrower for a loan for more than he or she can afford to repay
- • Encouraging the buyer to use fraud during the application process
- • Pressuring buyers into certain loan products, including high-risk loans or loans with higher interest rates
- • Establishing an interest rate on the basis of anything other than the borrower’s credit history
- • Charging unnecessary or additional fees
- • Deliberately targeting vulnerable or at-risk buyers and suggesting cash-out refinances
A Mortgage Broker bond’s actual amount depends on the average amount of mortgage loan volume serviced in a year and the state requirements. Surety Support Services, Inc. handles Mortgage Broker Bonds for clients in most states.
Application Information
Complete the Commercial Application to get started. Please note: in addition to our commercial bond application, we may need to request the business and personal financial statements of the owner(s) and copy of any statute or ordinance that’s requiring the bond and/or a bond form.
