Loan broker or lender bond cost
We offers Rhode Island loan broker or lender bonds for different costs depending on each applicant’s individual credit report. Even though this bond is subject to underwriting, our experts will work hard to get you the best price possible for your unique credit situation. Brokers are required to post a bond in the amount of $20,000 and lenders must be in the amount of $10,000. There is also an additional fee of $5,000 for each location the principal plans to conduct business at.
Why this bond
Rhode Island broker or lender bonds assure that if consumers are wronged in the process of a mortgage transaction, they have a safeguard from unprofessional acts of business and can be compensated for financial losses. Unethical acts covered by this bond include, but are not limited to:
- defrauding or misleading borrowers and lenders
- obtaining property by fraud or misrepresentation
- failing to make disclosures required by state law, such as annual interest rate percentages
- advertising a product at a low price when it is not available for sale in order to entice customers to buy a more expensive product, otherwise known as “bait and switch” advertising
- collecting or charging any prohibited or unjustified fees
If the principal violates the terms of his or her bond agreement and a consumer is harmed as a result, the surety will pay for all damages up to the full bond amount; however, the principal is responsible for reimbursing the surety for any money it pays out to consumers.
Loan broker or lender bond details
This bond runs continuously in full force and effect unless otherwise canceled by the surety or the principal. If either party wishes to terminate the bond before its set date of expiration, a 30-day notice prior to cancellation is required to be submitted and filed with the Department of Business Regulation.
Become a loan broker
It is against the law to conduct business as a loan broker or lender without first obtaining the proper licenses. Lender and broker applications are two separate processes and require two different applications. Both applications must go through the Nationwide Mortgage Licensing System (NMLS). In order to obtain a small loan lender license, the applicant must do the following:
- pay the required application fee of $275.00
- be able to provide proof of financial responsibility. This statement must be signed by an authorized officer
- post a surety bond in the required amount
- provide the information for designations/registered agents that will accept the principal’s services
- provide the appropriate Secretary of State documentation
Apply for your surety bond
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