what happens...

[rolf]

if you have claims against your mortgage bond (i don't just curious) and either you cannot pay them, or are out of business?

i would think this would be fairly common these days, shops are closing left and right... audits are still going to be done i would think??? if you don't have much $... what would happen? would the indiviidual set up a payment plan? or file BK? wouldn't that still involve the spouse?

i would think that this could have a larger affect on the number of brokers than rates rising or anything else. no?

[Admin]

Originally Posted by rolf

if you have claims against your mortgage bond (i don't just curious) and either you cannot pay them, or are out of business?

The surety is ultimately responsible, as they guaranteed your business. However, the surety will look to you (I can almost guarantee you that you signed an indemnity agreement) for repayment of the claim.

I am not aware of any surety markets that will write you after you had a claim, unless you provide 100% collateral and even then they sometimes will still not bond you.

Originally Posted by rolf

i would think this would be fairly common these days, shops are closing left and right... audits are still going to be done i would think??? if you don't have much $... what would happen? would the indiviidual set up a payment plan? or file BK? wouldn't that still involve the spouse?

It is true that we see a record amount of non-renewed bonds from closing shops. However, we have not seen a drastic increase in claims.

If you do have a claim filed against you I would recommend you discuss it with the bonding companies claim department. They will likely be contacting you soon if they haven't already. You would also suggest contacting your legal counsel.

Originally Posted by rolf

i would think that this could have a larger affect on the number of brokers than rates rising or anything else. no?

I don't understand your question. Can you rephrase?

[rolf]

just meaning that surety bond prices (and a potential increase in price) having an effect on new shops being able to open, or renew

[Admin]

Understood.


As of now, we are not seeing too big of a change in rates. Rate filings take a while for bonding companies to do, so we might see changes in the coming months/years.

That is not to say that people with credit problems will not see high rates though, as the current high risk markets are extremely high...so keep your credit clean if possible!