What are Iowa 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 Iowa Division of Banking.
- A surety company
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 Iowa finance & mortgage broker bonds cost?
The Iowa Division of Banking requires mortgage loan brokers to post a $100,000 surety bond as part of the licensing process. Brokers with over $100,000,000 in annual loan volume are required to post a $150,000 bond. The bond requirements for other finance bonds in Indiana are as follows:
- Mortgage Banker Bond: $100,000
- Money Transmitter Bond: $50,000 and upwards
- Closing Agent License Bond: $25,000
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 Iowa finance and mortgage broker bonds typically cost between 1% and 5% of the total bond amount. EZSurety has issued mortgage broker bonds in Indiana for premiums as low as $750.
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 Iowa 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 Iowa?
To become a licensed mortgage broker in Iowa, you must meet the following licensing requirements:
- Complete the criminal background check
- Submit your financial statements
- Provide a Certificate of Authority obtained from the Secretary of State
- Submit your application through the Nationwide Multistate Licensing System & Registry (NMLS)
- Post the $100,000 surety bond
- Pay $500 in license costs
For information on obtaining other finance licenses in Iowa, you can visit the NMLS Resource Center.