What is a California Residential Mortgage Lender Bond?
Residential mortgage lenders have great access to the funds and finances of their clients. The residential mortgage lender bond ensures that these companies will act lawfully and ethically when dealing with clients’ finances.
Who Needs a California Residential Mortgage Lender Bond?
The California Department of Business Oversight requires all residential mortgage lenders and servicers to post $50,000 surety bonds. These bonds are to help protect the state and the public from unethical business practices.
Why Do I Need a California Residential Mortgage Lender Bond?
The California residential mortgage lender bond ensures that all residential mortgage lenders or servicers and their agents or employees will abide by the provisions of the California Residential Mortgage Lending Act and all regulations set forth by the Commissioner of Business Oversight. Most notably in these regulations, the lender or servicer agrees to appropriately apply all funds received during the transactions. The full list of restrictions can be found on the website of the California Department of Business Oversight.
If the principal violates these laws or the terms of the surety agreement, any harmed parties can make a claim against the residential mortgage lender bond. Once finalized, the principal is responsible for reimbursing the surety for any damages paid or associated legal costs.
How Much Does a California Residential Mortgage Lender Bond Cost?
The California Department of Business Oversight requires a $50,000 surety bond for the licensing of residential mortgage lenders or servicers. These bonds are subject to underwriting, and the cost will vary based upon the credit rating of the principal.
Get Started Today!
To operate a mortgage lender company, you must first purchase California residential mortgage lender bonds. Don’t delay your application.