What is a Mortgage Banker Bond?
Mortgage bankers or lenders are professionals who originate mortgages. They can also service mortgages or sell these to investors or other financial institutions. In order to get licensed, mortgage bankers need to obtain a bond.
Mortgage Banker Bonds, or Mortgage Lender Bonds, guarantee that a mortgage banker will comply with the terms and conditions of the state in which they are operating. Though many states use the same bond form for mortgage brokers and mortgage bankers, some states require a larger bond for the lenders.
As such, mortgage banker bonds function like a three-party agreement between the principal (the mortgage banker), the obligee (consumers) and the surety bond company underwriting the bond. In the case of a legitimate claim against a mortgage banker by an obligee, the surety can step in and resolve the claim by compensating the obligee for any losses suffered due to the banker’s actions.
Mortgage Banker Bond Cost
The rate of a mortgage banker bond premium depends on each particular case. Personal credit score is the most important factor in determining the exact amount of the annual premium. Mortgage bankers with good credit score will usually receive a quote ranging between 1%-4% of the total bond amount.
Get an initial estimate of the cost of your mortgage banker bond premium by using the surety bond cost calculator in the sidebar on the right. Make sure to also visit our surety bond cost page for extensive information on how surety bond cost is determined.
Reducing the Cost of Your Mortgage Banker Bond Premium
It is possible to reduce the rate of your mortgage banker bond premium over time. You can do so by:
- Working on and improving your credit score
- Providing cash verification or having strong liquid assets
- Choosing the right surety bond agency
By working with Bryant Surety Bonds, you have access to our vast network of partner surety bond companies, all of which are A-rated and T-listed. Through them we can provide you with bonds in all 50 states, at the lowest rate, and their quality and reliability is guaranteed.
Bad Credit Surety Bond Program
Even if you have a bad credit score or there are other complicating factors, you can still obtain a mortgage banker bond. Bryant Surety Bonds’ bad credit surety bond program is meant to enable high-risk applicants to obtain a surety bond.
Bad credit applicants receive slightly higher rates on their mortgage banker bonds due to the risk involved. These rates usually range between 5%-7.5%% of the total bond amount. But by improving your credit score, you can improve your overall standing and receive a better rate on your premium each year.
How to Get Your Mortgage Banker Bond
You can obtain your mortgage banker bond right away. All you need to do is apply online and you will receive a free quote on your bond in a matter of minutes.
Once you have your bond, you will have to submit the relevant documentation needed for the underwriting of your bond. This includes the mortgage banker bond form for the state you will be doing business in.
If you have questions concerning your application or your bond, call us at 866.450.3412 to speak to one of our surety bond experts. They can provide you with all relevant information and guide you through the application process.
