How to Get a Mortgage Broker Bond

A mortgage broker is an intermediary who finds mortgage loans at the best rates on behalf of a customer. In most states, a mortgage broker must be licensed by the state and carry insurance, in other words become bonded. Licensing requirements can vary from state to state, and in most states a mortgage broker must be licensed to become bonded.

Difficulty: Moderate

Instructions

1. Check out surety bond companies. As with all insurance companies, rates can vary. Go with a reputable company and find the deal that's best for you.

2. Apply for the bond. This can even be done online, in some cases. Before receiving the bond you will provide information to the surety company regarding your personal and/or business financial history.

3. Get bonded. A good credit history and the ability to pass a background check will make it likely that you will receive a bond without a problem.

4. Get a broker's license. Many states require you to get a bond before they will issue you a brokers license. Check your state's Department of Banking for details concerning requirements to become a licensed broker

Tips & Warnings

• A mortgage broker bond guarantees the broker will operate according to the rules and regulations of the state codes and regulations.
• The purpose of the bond is to assure the recovery of expenses by the state regulators fin the event you are non-compliant with the state regulations. The bond would also assure recovery of losses incurred by borrowers or customers.
• A bond does not pay losses for you. The surety bond is intended to guarantee the any losses up to the dollar value of the bond.

Resources

• Information on mortgage broker surety bonds and applications.
• Why you need a bond and how to get one
• Professional mortgage bankers organization