South Carolina Mortgage Broker Bond Overview
One of the main requirements for obtaining a South Carolina mortgage broker license is for applicants to obtain a mortgage broker bond.
The bond amount is based on the total yearly dollar amount of mortgage loans originated and can be either $25,000, $40,000, or $55,000.
While mortgage brokers in the state are regulated by the Department of Consumer Affairs, you must apply for your SC mortgage broker license through the Nationwide Multistate Licensing System & Registry (NMLS).
Why is this bond required?
This bond is an agreement between the licensed mortgage broker, the state of South Carolina, and the surety that backs the bond. It guarantees the licensee's compliance with all state laws and rules that govern the business of mortgage brokerage.
If a broker violates these laws and causes any damages or losses, the bond also serves as a guarantee for financial compensation. In this case, a claim is filed against the bond, and the surety extends compensation to claimants. Such compensation can be as high as the full amount of the bond.
If you want to know more about how bonds work or why you need one, see our ‘What is a surety bond' guide!
In the sections below you can learn more about the cost of your bond, how bond claims occur and are resolved, and how to apply for your bond.
For any additional questions about the bonding requirements for mortgage brokers in South Carolina, call us at 866.450.3412!
How Much Does it Cost to Get a North Carolina Mortgage Broker Bond?
To get bonded, you must pay a bond premium. This premium is equal to a percentage of the total amount of your bond. It is determined by the surety on the basis of several different financial factors.
How the bond premium is determined
Your personal credit score is the number one factor that determines the cost of your bond. It is considered a reliable indicator by sureties regarding the likelihood of a claim being filed against a bond.
Typically, applicants with an excellent to good credit score can expect to get bonded at a rate between .5% and 5% of the total bond amount.
For applicants with lower or even bad credit rates are somewhat higher due to the increased risk that sureties perceive in bonding them. Such applicants can expect to be offered a rate between 5% and 15%. Applicants with low credit can improve their bond rate significantly over time by improving their credit score and other financials!
Your surety may also want to review the following information in order to determine your bond premium more accurately:
- Personal and business financial statements
- Fixed and liquid assets
- Industry experience and record
For an estimate of the cost of your bond, based on credit score, see the table below.
|South Carolina Mortgage Broker Bond Cost Based on Credit Score
|Dollar volume of annual mortgage loans
|Up to $49,999,999
|Between $50,000,000 and $99,999,999
|Greater than $100,000,000
How Do Bond Claims Occur?
This bond is a guarantee that the licensed mortgage broker will comply with their obligations under the South Carolina Mortgage Broker Act. If, instead, a broker violates the Act and causes any losses or damages to an individual or the state, the bond serves as security.
Any party that is hurt by a violation may file a claim against the bond. The surety that backs the bond then has the obligation to investigate the claim and determine the amount of compensation to extend. Compensation that is extended under a bond claim can be as high as the full amount of the licensee's bond but not more.
When the surety compensates claimants,the bonded broker is obliged to reimburse the surety in full. This is a standard condition in all bond agreements - the surety is never liable for a bonded party's violations of the agreement.
Claims are costly and difficult to handle which is why it is best to avoid any situations or actions that may lead to one.
Ready to Get Bonded? Here's How!
Click on the banner below to complete our simple bond application form. We'll contact you shortly with a free quote on your bond, along with further details about getting bonded.
If you have any questions about this bond that are left unanswered, call us at 866.450.3412 anytime!