Mortgage Broker or Lender?

[bad2thebond]

Whats the difference between a mortgage broker bond and a mortgage lender bond?

[Surety Wizard]

A mortgage broker handles all of the aspects of a mortgage for certain companies they may represent. They gather all the application information, market, advertise, and sell the product of a mortgage company they are appointed with (may be many companies).
A mortgage lender does a similar task but he actually tables the funds for the loans as well. Then they will profit by selling off the mortgage to larger companies. Mortgage Lender Bonds are typically higher amounts due to the fact they table mortgage funds. Some Lenders also have Fidelity requirements based on the state.

[Bond Magician]

Originally Posted by Surety Wizard

A mortgage broker handles all of the aspects of a mortgage for certain companies they may represent. They gather all the application information, market, advertise, and sell the product of a mortgage company they are appointed with (may be many companies).
A mortgage lender does a similar task but he actually tables the funds for the loans as well. Then they will profit by selling off the mortgage to larger companies. Mortgage Lender Bonds are typically higher amounts due to the fact they table mortgage funds. Some Lenders also have Fidelity requirements based on the state.

Why would a Fidelity bond be required? What does a Fidelity bond have to do with Lender bond?

[Surety Wizard]

A Fidelity Bond may be required because you are dealing with the funds (cash) of your clients. This would cover any employees that work for you under your company ownership. It would not cover you personally though.

[Bond Magician]

Originally Posted by Surety Wizard

A Fidelity Bond may be required because you are dealing with the funds (cash) of your clients. This would cover any employees that work for you under your company ownership. It would not cover you personally though.

So would this type of bond protect against employee theft? Is this type of bond expensive, or can I obtain it relatively easily?

[Surety Wizard]

This would protect you from employee theft and also misappropriation of funds (since a lot of transactions are electronic). They are relatively inexpensive and easy to write.

[Bond Magician]

Originally Posted by Surety Wizard

This would protect you from employee theft and also misappropriation of funds (since a lot of transactions are electronic). They are relatively inexpensive and easy to write.

OK - are fidelity bonds based on personal credit like the mortgage broker bonds are? Are they underwritten differently?