Bond Amount
$25,000
Requiring Entity
State of California, Department of Corporations
Underwriting Criteria
- Personal Credit Check of Business Owner(s)
Premium Rate(s)
1 Year - $375*
Who is Required to Secure this Bond
All persons applying for a California Mortgage Broker/Finance Lender license are required to post and maintain a surety bond in the amount of $25,000 (California Financial Code Section 22112). A finance lender is defined as any person engaged in the business of making consumer or commercial loans. A broker includes any person engaged in the business of negotiating or performing any act as a broker in connection with loans made by a finance lender. A broker licensed under California Finance Lenders Law may only broker loans to lenders licensed as finance lenders. The license does not provide the broker with authority to broker loans to and collect brokerage commissions from other types of lenders such as credit unions and banks. In addition to the bond, the mortgage broker must also maintain a net worth of $25,000 at all times.
Bond Requirement Specifics
The bond is required by the State of California to be used for the recovery of expenses, fines, and fees levied by the commissioner in accordance with this division or for losses or damages incurred by borrowers or consumers as the result of a licensee's noncompliance with the requirements of this division (California Financial Code Section 22112).
Who is protected Under this Bond
The bond is payable to Commissioner of Corporations and protects any person who sustains a loss caused by the Mortgage Broker. Any person who sustains an injury covered by this bond may, in addition to any other remedy he or she may have, bring an action in his or her own name upon this bond for the recovery of any damages sustained.
Underwriting Process
Each applicant must first complete and submit the application for a Mortgage Broker Bond, which contains all of the pertinent information regarding the business and business owners. In addition to the application the applicant must also provide the following information:
Once the application has been received, a routine examination of the business owner’s/applicant’s personal credit history will be performed to determine approval for the bond. Upon receipt of the application, our agency will be able to provide a response as to approval for the Mortgage Broker Bond within one to two business days. Once the application is approved, the bond will be executed and released to the applicant upon receipt of payment and original signed application.
What you Need to do Once you have your Bond
Once the Mortgage Broker Bond has been approved and released to the applicant’s care, it must be filed with the Department of Corporations. The Department of Corporations will maintain the bond, which must remain effective at all times to prevent the revocation of the Mortgage Broker license. If for any reason the bond is suspended or canceled, the license will be suspended until the bond is restored or is replaced.
Obligee Link
http://www.corp.ca.gov/FSD/lender.asp http://www.corp.ca.gov/FSD/faq/default.asp
* Please be advised that the quote you obtain for this bond may include a fee charged and retained by The Bond Exchange.