Different Surety Bonds

How Mortgage Broker Bonds Function

There are many different types of surety bonds : license & permit bonds, court bonds, dishonesty bonds, notary bonds, and more. These surety bonds are structured differently, have different entities requiring the bonds, and have varying collateral requirements. By far, the most common type of bond is the license and permit bond. These bonds are required by the state licensing organization as part of the conditions that must be met in order for an organization to receive their license to do business.

One particular type of license and permit bond is a mortgage broker bond . These bonds do not provide surety that the bank or financial institution will fulfill and uphold terms of an individual contract, but rather that the financial institution will uphold all laws and statutes of the real estate laws in the state that they offer mortgage brokerage services in. If the mortgage broker was found to have done business in such a way that the laws were not upheld or one of the parties involved in the mortgage was harmed due to his negligence, the mortgage broker bond would pay the damages if the mortgage broker was not able to pay the damages himself.