What are Arkansas finance & mortgage broker bonds?
Finance and mortgage broker bonds are legally binding agreements between three parties:
- Finance professionals such as mortgage brokers and finance lenders
- A government agency like the State of Arkansas Securities Department.
- A surety company
The bonds provide a guarantee that licensed finance professionals conduct business in compliance with the regulations set forth in the Arkansas Annotated Code
If the finance professional fails to comply with the regulations, the surety company will pay out financial losses to damaged parties up to the full bond amount. The finance professional is liable to reimburse the surety for any damages paid under the bond.
How much do Arkansas finance & mortgage broker bonds cost?
The State of Arkansas Securities Department requires mortgage brokers to post a $100,000 surety bond as part of the licensing process. The bond requirements for other finance bonds in Arkansas are as follows:
- Arkansas Mortgage Banker Bond: $100,000 and upwards
- Arkansas Mortgage Servicer Bond: $100,000 and upwards
The surety company issuing the bond determines your premium rate, which is the percentage of the total bond amount you pay as the premium. Premium rates for the Arkansas finance and mortgage broker bonds typically cost between 1% and 5% of the total bond amount. EZSurety has issued mortgage originator bonds in Arkansas for premiums as low as $313.
During the application process, the surety company evaluates your personal credit, financial statements, industry experience, and licensing history. Applicants with good credit generally receive the lowest rates, however, bad credit will not prevent you from securing an Arkansas mortgage broker bond. EZSurety still offers competitive rates to individuals with low credit scores or other financial issues.
How to get your mortgage broker license in Arkansas?
To become a licensed mortgage broker in Arkansas, you must meet the following licensing requirements:
- Complete the criminal background check
- Submit your personal financial statements
- Provide a copy of your Certificate of Authority
- Submit your business plan
- Submit your application through the Nationwide Multistate Licensing System & Registry (NMLS)
- Post the $100,000 surety bond
- Pay $850 in licensing fees and a $36.25 background check fee
For information on obtaining other finance licenses in Arkansas, you can visit the NMLS Resource Center.