Why do I need a surety bond?

I am a mortgage broker in Florida. They are requiring me to obtain a $10,000 correspondent lender bond for my license.

Why is it required of me?

Is this a type of insurance for my business?

[Admin]

The bond is required to guarantee that you will operate your business according to the state's statutes and regulations.

A bond differs from insurance as you will not collect a dime on a claim. With bonds they write them assuming there will not be a claim. With insurance there is an assumed loss ratio. This is another reason why obtaining a surety bond is much more difficult than obtaining auto insurance.

You can read the bond information section our our parent site for more information on Surety Bonds vs. Insurance

[Riskwriter]

We have a specific program for individuals who cannot get bonds through a standard market becuase of poor credit.

Please see our web page and look for "Bad Credit Surety Bonds"

[nikeboy]

so basically you need to spend 10k to get a licence to do mortgage brokerage services? that's a lot of money

[Admin]

Not at all. You will be paying an annual premium to pay for "surety credit" in the amount of $10,000. They guarantee that your company will operate per the state statutes.

You can obtain rate information online at: Mortgage Broker Surety Bond - Online Instant Approval Program