Mortgage Brokers sometimes need a bond to protect their clients. These bonds guarantee that the broker will comply with all applicable rules and regulations. If they violate any rules or regulations, a client can make a claim against the mortgage bond for damages.
Why do You Need a Bond?
In some states, a few bad apples can spoil the bunch, and because there have been bad actors that chose to fraudulently operate as mortgage brokers, many brokers are now required to be bonded to protect their clients. Period. Improper loan approvals are examples of situations where a broker might have to deal with a bond claim. This is because there is a real possibility of the broker or broker’s officers approving a client for a loan that they know cannot be repaid. If the client cannot repay the loan, and the broker is at fault for carelessly or fraudulently closing the loan, a claim can be filed. Some states require loan originators to secure a surety bond as well.
Bond Claims put Assets at Risk
Because brokers are responsible for paying bond claims in full, the broker’s assets are at risk. A bond is a signed pledge to put up personal and corporate assets in the event of a claim. The best practice a broker should take while conducting business is to act with due diligence at all times, and to not make reckless mistakes that lead to a claim.
Choose an Experienced Bond Company
When you are looking to buy a bond, it is important to choose a company that is highly experienced and knowledgeable of your industry. When purchasing your surety company should have a clear understanding of how your assets might be at risk and how to help you avoid unnecessary challenges. Meadowbrook Direct employs a team of experienced and professional surety experts who can walk you through the process of obtaining your bond. Fill out the application online for a speedy turnaround at the most affordable prices.
If this is the bond you need, download and submit the application below. All applicants will receive a response within one business day. Still not sure what type of bond is right for your business? Contact us at (866) 207-5520 or email our team for assistance.