In many states, you need to secure a mortgage broker bond before you can obtain your mortgage broker license. This surety bond protects consumers by holding brokers accountable for unethical or unlawful business practices.

Bonding costs vary depending on your state, credit score, and finances. They can range from $100 to $8,000+. No matter which state you operate in, you can get bonded quickly and easily with BOSS Bonds.

Mortgage Broker Bonds: What They Are and How to Get One Fast

As a mortgage broker, you can earn lucrative commissions and help people achieve their dream of homeownership. Better yet, this profession has a relatively low barrier to entry. Rather than earning an advanced degree, you simply need to obtain your mortgage broker license.

The mortgage broker licensing process involves completing pre-licensing education, passing a background check and exam, and submitting your application. In some states, there’s another often-overlooked licensing requirement that can catch new brokers off guard: securing a mortgage broker bond. 

Below, we’ll explain what mortgage broker bonds are, why you need one, and how you can get bonded quickly and easily with BOSS Bonds.

What Is a Mortgage Broker Bond?

A mortgage broker bond is a type of surety bond that some states require to obtain a mortgage broker license. It serves as a financial guarantee that the broker will operate in compliance with state laws and regulations. In turn, it protects consumers from fraud or misrepresentation. 

Mortgage broker bonds involve the following parties:

• Principal – The mortgage professional
• Obligee – The mortgage professional’s state licensing authority
• Surety – The bond company that guarantees the broker’s compliance

If a mortgage broker commits fraud, misrepresents a borrower, or violates state lending laws, the affected parties or regulators can file a claim against their bond. After an investigation, the surety company will cover the damages up to the bond amount and seek repayment from the mortgage broker.

As you can see, mortgage broker bonds aren’t insurance policies for brokers. Instead, they protect the public by incentivizing the broker’s legal and regulatory compliance.

Who Needs a Mortgage Broker Bond—and When?

While bonding requirements vary from state to state, the following professionals often need to obtain mortgage broker bonds to do business:

• Licensed mortgage brokers
• Mortgage lenders
• Mortgage originators (in some states)

These mortgage professionals typically need to show proof of an active surety bond when applying for a new license, renewing an existing one, expanding into a new state, or changing their business structure, such as forming an LLC or corporation.

Every state has different rules and minimum bond amounts. To find out your state’s requirements, check out the Nationwide Multistate Licensing System & Registry’s (NMLS) Resource Center or reach out to your state’s regulatory agency.

Read More: The Important Role of Surety Bonds in Professional Licensing

How Much Does a Mortgage Broker Bond Cost?

Mortgage broker bond premiums can range from as little as $100 up to $8,000 or more. Their cost depends on the following factors:

1. Your state’s required bond amount – States set their minimum bond amount requirements. While these amounts can vary by location and license type, mortgage broker bond minimums typically range from $10,000 to $150,000+. Fortunately, you don’t need to pay the full bond amount. Instead, you pay a premium, which is a small percentage that typically ranges from 1% to 5% of the bond amount.
2. Your personal credit and financial profile – Similar to a mortgage rate, surety companies base your bond premium on your credit and financials. If you have a good credit score and strong finances, you’ll usually qualify for a lower premium.

To clarify these costs, let’s take a look at a real-world example: an aspiring mortgage broker lives in California, which requires a $50,000 surety bond. Thanks to their strong credit score and ample bank account balance, they qualify for a low 2% rate. Thus, their annual bond premium is $1,000.

Note: If you have poor credit, don’t worry. BOSS Bonds can find a cost-effective bonding program that fits your budget. While you may need to pay a slightly higher rate, you can still get bonded quickly and keep your business plans moving forward.

How to Get a Mortgage Broker Bond—Fast

Now that you understand the purpose and cost of mortgage broker bonds, you may be wondering how to secure one. Luckily, it’s a quick and easy process—just follow these steps:

1. Research your state’s requirements – You can find your state’s mortgage broker bond requirements on the NMLS or from your state regulator. Take note of the required bond amount and renewal schedule. 
2. Apply online through BOSS Bonds – At BOSS Bonds, our simple application only takes a few minutes to complete online.
3. Get a quote – In many cases, you can receive your mortgage broker bond quote the same day you submit your application. This quote will outline the total cost of your bond, your rate, and the next steps.
4. Purchase and file your bond – After paying your mortgage broker bond premium, file the bond with your state’s licensing authority. 

If you run into any challenges, our team at BOSS Bonds is here to help. We’re happy to answer your questions and guide you every step of the way.

Why Choose Boss Bonds?

BOSS Bonds makes it easy to get the mortgage broker bond you need quickly. Here’s what sets our bonding agency apart:

Nationwide Service

We’re licensed in all 50 states and know the requirements in each one. Whether you’re applying in California, Florida, Texas, or somewhere else, we’ve got you covered.

Competitive Rates From 25+ Markets

We work with more than two dozen top surety carriers, so we can shop around to get you the best rate available.

Personalized Support From Our Attentive Team

As a surety-only agency, we understand the bonding process inside and out. We can walk you through each step, offer expert advice, and answer any questions that arise. 

One-Stop Shop for Multi-State Compliance

If you plan on operating in multiple states, we can help you manage your bond requirements in each one, ensuring smooth compliance as you scale and expand your business. 

Fast Turnaround Times

When you’re launching a new business, time is of the essence. That’s why we ensure quick turnaround times. Most of our applicants receive their bond quote the very same day.

Launch Your Mortgage Broker Career With BOSS Bonds By Your Side

Getting bonded is a crucial step in becoming a licensed mortgage broker. Fortunately, it can be fast and stress-free if you work with the right bonding agency.

Whether you’re applying for your very first surety bond or securing one in a new state, BOSS Bonds can support you every step of the way.

Ready to get started? Apply online with BOSS Bonds today!

Key Takeaways:

• A mortgage broker bond is a type of surety bond that some states require as a part of the licensing process for mortgage professionals.
• These bonds protect consumers by ensuring mortgage brokers follow all applicable laws and ethical business practices.
• Bond costs vary based on your state’s required bond amount and your personal credit profile, though they typically range from $100 to $8,000+.
• BOSS Bonds makes it easy to apply, get a quote, and secure your mortgage broker bond quickly.

Sources:

Nerd Wallet. How Much Do Mortgage Brokers Make?

https://www.nerdwallet.com/article/mortgages/how-much-do-mortgage-brokers-make

Westlaw. California Code of Regulations: § 1950.205.1. Surety Bond.

https://govt.westlaw.com/calregs/Document/IB76B8CF95C2F11EC9C68000D3A7C4BC3?viewType=FullText&originationContext=documenttoc&transitionType=CategoryPageItem&contextData=(sc.Default)&bhcp=1