Mortgage Broker Bond Arizona Overview
Applicants for a mortgage broker license in Arizona must post a mortgage broker bond as part of the licensing process. The bond must be in an amount of either $10,000 if their investors are limited solely to “institutional investors” or $15,000 if this is not the case.
The Arizona mortgage broker license is issued by the AZDFI. Applicants for the license must use the Nationwide Multistate Licensing System & Registry (NMLS) to submit their application.
Why do I need a bond?
License applicants require a bond as a guarantee that they will comply with all the provisions of the Arizona Revised Statutes (ARS) that regulate the business of mortgage brokers.
If a mortgage broker violates these provisions, anyone harmed by such a violation can file a claim against the bond to obtain compensation. Compensation is guaranteed by the surety that backs the bond and can be as high as the full amount of the bond.
Not sure how bonds work? See our detailed ‘What is a surety bond' guide!
Learn more about this bond, its cost, and how to apply in the sections below!
If you have any questions about this bond, call us at 866.450.3412!
How Much Does The Arizona Mortgage Broker Bond Cost?
The cost of your bond, also known as its premium, is equal to a certain percentage of its total amount. That percentage is set by the surety you apply with, based on several factors.
Factors that determine your bond premium
The most important factor that influences your bond cost is your personal credit score. Sureties consider credit score to be a strong predictor of financial reliability and extend the lowest rates to applicants with high credit score. Such applicants can typically expect to get bonded at a rate between .5% and 5% of their bond amount.
Applicants with lower scores can also get bonded, albeit it at a higher rate - between 5% and 15%. This is due to sureties perceiving a higher risk in bonding applicants with low scores, and requiring higher security.
In determining a bond premium, sureties will frequently also review other financial indicators. These include:
- Personal and business financial statements
- Fixed and liquid assets
- Industry experience and record
See the table below to get a sense of the cost at which you can get bonded, based on your credit score.
|Arizona Mortgage Broker Bond Cost Based on Credit Score|
|Bond type||Bond Amount||Credit Score|
|Above 700||650-699||600-649||Below 599|
|Mortgage broker bond - institutional investors||$10,000||$100-$150||$100-$300||$250-$500||$500-$750|
|Mortgage broker bond - different type of investors||$15,000||$112-$225||$150-$375||$375-$750||$750-$1,125|
How Do Bond Claims Occur?
The Arizona mortgage broker bond form states that the bond is intended to be for the benefit of anyone who is injured by the actions of a broker. Such injury may arise out of wrongful acts, fraud, misrepresentation, default, and more. The bond also requires licensed brokers to comply with the provisions of Title 6, Chapter 9, Article 1, Arizona Revised Statutes.
If a broker violates their bond agreement, affected parties can file a claim for compensation. The surety that backs the bond will then investigate the claim and extend payment for as much as the full bond amount. Ultimately, though, the broker must repay the surety because the latter is not responsible for claims brought against the bond.
Apply For Your Bond Here!
Apply for your mortgage broker bond in Arizona by completing the bond form. We will shortly get in touch with you to provide you with a free quote and full details on completing the bonding process.
If you need any help with your application, call us at 866.450.3412 anytime!