What is a Pennsylvania Mortgage Loan Correspondent Bond?
Mortgage loan correspondents must obtain a surety bond as a precedent to the issuance of a license before being able to conduct business in the state.
The Mortgage Loan Correspondent Bond guarantees faithful compliance with the conditions of the Mortgage Licensing Act and the General Rules of Administrative Practice and Procedure (“GRAPP”). Furthermore, the bond is put in place to ensure financial protection to clients against financial losses in case a mortgage loan correspondent commits unethical or wrongful acts in originating and closing mortgage loans.
Mortgage loan correspondents, as described under Section 6123(6), are individuals who originate and close mortgage loans in their own names, whether directly or indirectly. They handle funds by a wholesale table funder or other funding sources and simultaneously assign loans to the wholesale table funder.
Note: A mortgage loan correspondent may act as a mortgage broker without a separate mortgage broker license (Subchapter B., § 6111 (b)(2)).
What is the bond amount?
The bond amount is $100,000.
The cost of the bond is a percentage of the bond amount, which can range from 1%-5%. This is referred to as your bond premium. The cost will vary and will be based on a surety underwriter’s assessment of your credit score and financial standing.
How do I obtain a Mortgage Loan Correspondent Bond?
You can easily get this surety bond from us! We will guide you through the entire process. We’ll make sure that you will understand what you are getting into.
Here’s how to do get bonded:
You have to send an application to us. If you are ready to do that now, get a more accurate price by getting your FREE quote HERE!
After we have received your application, we will ask you to submit the necessary information needed for the underwriting process. An expert surety underwriter will carefully evaluate your credit score to attain the best credit decision possible.
To avoid any delay, the information that you should submit should be organized and concise.
What are the bond conditions?
- The bond must be written by a Surety authorized to conduct business in the Commonwealth of Pennsylvania.
- The Principal (mortgage loan correspondent) must act in accordance with the Mortgage Licensing Act (7 Pa. C.S. §§ 6101-6154) and to all rules and regulations mandated by the Pennsylvania Department of Banking and Securities.
- In obtaining the penal bond in the prescribed amount, the Principal intends to accept and will accept advance fees.
- The bond will be continuous in full force and effect indefinitely but is subjected to cancellation.
- If the Surety elects to cancel the bond, it may do so any time filing with the Secretary of Banking of the Commonwealth of Pennsylvania a 30-day written notice of intended cancellation.
- The aggregate liability of the Surety will not exceed the full penal sum of the bond.
Need help in getting your Mortgage Loan Correspondent Bond? Contact us today!