Mortgage bond cost
Bonding for mortgage brokers
Arizona commercial and non-commercial mortgage broker bonds have two possible amounts. These amounts ($10,000 and $15,000) depend on the type of investors to which the agency provides its services. If investors are institutional investors, the bond amount is $10,000, but if investors are both institutional and non-institutional, the bond amount is $15,000. If you are unsure of your investors’ institutional status, the term ‘institutional investor’ is defined in the ARIZONA Revised Statutes, Title 6, Section 903.
The cost of this specific type of bond is based on the applicant’s credit report. With good credit, clients could pay as low as $100!
Bonding for bankers
The amount of Arizona commercial and non-commercial mortgage banker bonds vary depending on the base of the licensee’s total assets and the unpaid balance of loans contracted at the end of the previous fiscal year.
For a base of $1 million or less, the bond amount starts at $25,000 for the first $500,000 of the base. For every $100,000 of base over the initial $500,000, $5,000 is added to the bond amount. For a base between $1,000,001 and $10 million, the bond amount starts at $50,000, and for each $1.8 million of base over the initial $1 million, $5,000 is added to the bond amount. For a base between $10,000,001 and $100 million, the bond amount starts at $75,000, and for each $18 million of base over the initial $10 million, $5,000 is added. For a base of $100 million or more, the bond amount is set at exactly $100,000.
Mortgage brokers are defined by the state of Arizona as any person that makes or negotiates a residential mortgage loan for compensation. The Arizona Department of Financial Institutions requires mortgage brokers to be bonded for the protection of the clients they work with. The surety bond ensures that mortgage brokers follow all rules and regulations stated in the Arizona Revised Statutes. Some unlawful acts include:
- paying an unlicensed mortgage professional or employing a private contractor
- delaying the closing of a loan, which results in increased costs for the client
- requiring a client to take on a loan in the amount of $200,000 and, therefore, blocking the client from taking another loan out elsewhere
These unlawful acts are just a few of the many listed in the statutes. If a principal (mortgage broker) violates any of these provisions and a consumer brings a valid claim against the bond, the principal is responsible for reimbursing the surety for any damages paid out.
Commercial Broker Information
Commercial mortgage brokers are defined by the state of Arizona as any person who makes or negotiates a commercial mortgage loan for compensation. The Arizona Department of Financial Institutions requires that an ARIZONA commercial mortgage broker surety bond be posted in order to protect all clients of the commercial mortgage broker. Commercial mortgage brokers work exclusively with non-residential mortgage loans. Prohibited acts under this bond include:
- illegally recording any document
- issuing or negotiating a loan for a property that does not exist
- failing to account for all monies belonging to clients
Mortgage bankers, as defined in the Arizona Revised Statues, make or negotiate mortgage banking loans for residential properties. By posting an Arizona mortgage banker bond, the principal (mortgage banker) states that he or she will follow all rules and regulations stated in the Arizona Revised Statues. Some of these laws prohibit:
- making a false promise or concealing any material fact dealing with a loan
- filing any document with blank spaces that are to be filled in after the document has been signed
- making any false statements about charges, rates or conditions
Commercial Mortgage Banker Information
Commercial mortgage bankers are defined as any person who is engaged in the origination, servicing, making or negotiating of commercial mortgage loans. When a principal (commercial mortgage banker) posts an Arizona commercial mortgage banker bond, he or she agrees to protect clients’ rights and to follow all rules, laws and regulations stated within the Arizona Revised Statutes. Some of these laws include:
- only acting as a commercial mortgage banker while licensed in the state
- not combining monies from multiple borrowers for loans
- not acting as a commercial mortgage banker for two or more companies without consent from both companies
Professionals bond details
All Arizona mortgage professional bonds are continuous until canceled. If for any reason a surety decides to cancel one of these bonds, the surety must notify the obligee and the principal 30 days prior to cancellation.Because all of these bonds share the same bond form, it is important to mark which license type you’re applying for. If you plan on applying for multiple licenses, a separate bond form must be filed for each one.
Become a professional
Getting bonded is just the first step to becoming a licensed mortgage professional in Arizona. Here are a few materials that you will need to obtain and submit with your license application:
- full credit report
- business and personal financial statements
- background check
- other trade names in the mortgage field
- bank account records
Not all of these are required for each license type, so it is important to follow the specific checklists that can be found on each individual application.Take the first step in getting licensed by filling out our online bond request form today!
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- Arizona Department of Financial Institutions Mortgage industry
- Arizona Department of Financial Institutions Forms and Fees
- Arizona Department of Financial Institutions Surety Bond form
- NMLS Resource Center State Licensing Requirements ARIZONA
- ARIZONA Revised Statutes, Title 6 – Banks and Financial Institutions