How to Become a Mortgage Broker in Arizona

Sep 3 Posted on

What Types of Mortgage Broker Licenses Are Issued in Arizona?

Arizona issues mortgage broker licenses that allow licensees to broker loans on both commercial and residential properties. Mortgage broker licenses are issued to both individuals and companies that find, compare, and negotiate loans for real estate purchases within the state of Arizona. Those who deal with commercial real estate clients should apply for a Commercial Mortgage Broker license.

There are three types of Arizona mortgage broker licenses: company, branch, and individual.

What Does the Licensing Process Involve?

In Arizona, mortgage brokers are licensed at the state level by the Arizona Department of Financial Institutions (AzDFI). Applications are processed through the Nationwide Mortgage Licensing System (NMLS), but hard copies of the documents required to support the application are mailed directly to AzDFI.

Applicants for licensing as a mortgage broker must meet experiential and residency requirements, complete 24 hours of pre-licensing education, and pass both a school exam and a state exam. The AzDFI application fee and NMLS processing fees are both collected through NMLS. There are also fees for taking the required class and taking the required exams.

Applicants who have completed the educational requirements and are ready to proceed with licensing must purchase a Mortgage Broker surety bond. The required bond amount depends on whether the applicant will be working with only institutional investors ($10,000) or with both institutional and non-institutional investors ($15,000).

Why Is a Surety Bond Required?

States require surety bonds before issuing licenses for individuals or companies in professions that have the potential to result in financial loss for clients if those professionals engage in unlawful or unethical conduct. Arizona�s surety bond requirement for mortgage brokers obligates those licensees to comply with all applicable state laws as well as the rules and regulations of AzDFI.

A mortgage broker surety bond is a licensee�s guarantee to abide by the law and behave ethically and responsibly in all of their dealings with clients and investors, as spelled out in the terms and conditions of the surety bond agreement. Any violation can result in a claim being filed against the surety bond�claims for which the licensee is legally responsible for paying.

What Happens if a Claim is Filed?

First, understand that a surety bond brings together three parties in a legally binding agreement:

  • The obligee is the state agency requiring the bond, in this case, AzDFI.
  • The principal is the party applying for a mortgage broker license and required to purchase the bond.
  • The surety is the company underwriting and issuing the bond.

When a claim is filed, the surety will first conduct an investigation to ascertain its validity. If the claim is valid, the surety will typically attempt to negotiate a settlement. If that is unsuccessful, the surety will pay the claim, but only as an advance that the principal must then reimburse. Remember, it�s the principal, not the surety, that is legally responsible for paying claims.

What Does a Mortgage Broker Bond Cost?

As with all surety bonds, the premium you will pay is only a small percentage of the total required bond amount. The surety decides what that percentage, the premium rate, will be based on the applicant�s personal credit and financial situation. The better the applicant�s credit, the lower the premium rate will be. Those with good credit will pay the standard market rate of between 1% and 3% of the total bond amount, while those with poor credit will pay a higher rate.

Get Bonded Today

Let the surety experts at Single Source Insurance help you get the bond you need to secure your Arizona mortgage broker license.

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California Bonded Title Process

Aug 27 Posted on

What Is a Bonded Title?

A bonded title is pretty much what it sounds like�a title with a bond attached. A bonded title is issued when a person has obtained ownership of a vehicle but for some reason lacks a valid title that will allow that vehicle to be transferred into the new owner�s name and registered. It looks just like a regular title except for bearing the word �BONDED.�

The California title bond itself serves as a guarantee that neither the state of California nor anyone with a prior ownership interest in the vehicle will suffer a financial loss if it turns out that you were given a bonded title that you were not entitled to.

Who Needs a Bonded Title?

Anyone who was not given a title at the time the vehicle was purchased, was given a title and lost it before getting it transferred into their own name, or received a defective title can apply for a bonded title. Simply losing a title that was already in your name doesn�t require a bonded title�only a duplicate title, which is much easier to obtain.

How Does the Process Work?

Here are the steps for obtaining a bonded title in California:

  • Fill out a Bonded Title Application, which is available on the California DMV website or from your local DMV office.
  • Ask a DMV employee or law enforcement office to complete a Verification of Vehicle form, which confirms the VIN.
  • Fill out a Statement of Facts form, also available from the DMV. You�ll need to include certain information about the vehicle, how you came to own it, and why you don�t have the original title.
  • For a vehicle weighing 10,000 pounds or less, fill out a Weight Certificate. For a vehicle weighing more than that, a completed Declaration of Gross Weight/Combined Gross Vehicle Weight Form.
  • Have a DMV representative inspect the vehicle and fill out an inspection form that verifies the VIN.
  • If the vehicle is not going to be operated, fill out a Certificate of Non-Operation/Planned Non-Operation.
  • If the vehicle is less than ten years old, complete an Odometer Disclosure statement.
  • Have a California licensed auto dealer appraise the vehicle and determine its fair market value. You may also use Kelley Blue Book or another valuation guide to find its current value.
  • Purchase a three-year California Certificate of Title Bond for the amount of the vehicle’s appraised value from a surety company licensed to operate in California.
  • Submit the bond certificate and all other required paperwork to the DMV. Upon approval, a bonded title will be issued and can be used to register, sell, or junk the vehicle.

What Happens if a Claim is Filed?

With a bonded title, there is a three year period during which someone with an ownership interest in the vehicle can come forward and make a claim on it. The bond agreement makes you, the bonded individual, legally responsible for paying claims. However, the surety company will typically pay any claim up front on your behalf and then turn to you for reimbursement. The terms of the bond indemnify the surety company against liability for claims.

If the three years go by with no claims, the bond expires and will not need to be renewed. You can go back to DMV and request that a clear, unbonded title be issued.

What Does It Cost?

Surety bond premiums are calculated as a small percentage of the required bond amount. At Single Source Insurance, all California bonded title premiums will have a $100 minimum. For bonds with a penalty over $7,000, the premium is 1.5%. For bonds with a premium over $25,000, we will run a credit check.

Get The Title Bond You Need

At Single Source Insurance, we can issue most California lost title bonds online in a matter of minutes. Contact us today to request a quote.

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North Carolina Bonded Title Process

Aug 26 Posted on

You cannot register or sell a vehicle (including a motorcycle or motor home) unless you have a title showing you as the legitimate owner. There is a process through which you can obtain a bonded title�a title with a surety bond attached�that will allow you to register your vehicle or sell it to someone else.

Learn everything you need to know about the North Carolina bonded title process below, and contact Single Source Insurance to get the bond you need today.

What Is a Bonded Title?

There are several reasons why you might not have a title: perhaps you were never given one when you purchased the vehicle, or you were given one and lost it before it was properly registered in your name, or you were given a title that is defective in some way.

A title bond protects the state and any previous owner from financial loss if it can be proven that you should not have been issued a title.

Who Needs a Bonded Title?

You do not need a bonded title if you once had a title that was in your name but are now unable to find it. It�s relatively easy to get a replacement title certificate from the DMV. You only need to execute the following bonded title process if you never had a title in your name.

If you never had a title for the vehicle, or the title is defective in some way, you�ll have to apply for a bonded title.

How Does the Process Work?

There are several steps you�ll need to take before you can even submit an application for a bonded title in North Carolina:

  • Contact your local DMV office to make sure you�re eligible for a bonded title.
  • Complete the Title Application and Affidavit of Facts to Accompany Indemnity Bond, which you can download from the North Carolina DMV website or obtain as a hard copy from your local DMV office. Be sure to sign in the presence of a notary public.
  • Have a vehicle inspection performed by a North Carolina DMV License & Theft Bureau Inspector. You will need to show the completed Title Application and Affidavit of Facts at the time of the inspection.
  • The inspector will verify the VIN and odometer reading and make sure the vehicle has not been reported as stolen. Hold on to the completed inspection form.
  • Get your vehicle appraised, and use that appraisal to calculate your required bond amount (1 � times the appraised value). You can visit a DMV license plate agency or call the North Carolina Customer Contact Center at (919)715-7000 to get the appraised value of the vehicle from the current Value Schedule. Note that if the vehicle is a motor home or is not listed in the Schedule, you�ll need to get appraisals from two different North Carolina dealers on the dealers� letterhead.
  • Purchase a 3-year North Carolina Lost Title Bond in the required amount from a surety company licensed to operate in North Carolina.
  • Submit the bond along with the completed Title Application, Affidavit of Facts, and inspection report to your local DMV.

What Happens if a Claim is Filed?

When you get a bonded title, it�s like taking an oath that you are the rightful owner of the vehicle. If someone surfaces during the three-year term of the bond and can prove an ownership interest in the vehicle, that person can file a claim against the bond and be compensated for the financial loss resulting from you having been issued a bonded title to which you weren�t entitled.

The surety company will verify and then settle and pay the claim. However, the bond indemnifies the surety company and requires you to reimburse the surety for any claims paid on your behalf.

What Does It Cost?

Surety bond premiums are calculated as a small percentage of the required bond amount. At Single Source Insurance, all North Carolina bonded title premiums will have a $100 minimum. For bonds with a penalty over $7,000, the premium is 1.5%. For bonds with a premium over $25,000, we will run a credit check.

Get A Quote

You can count on the bonding experts at Single Source Insurance to get you the surety bond you need in order to obtain a bonded title for your vehicle in North Carolina. Contact us today to request a quote.

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Iowa Bonded Title Process

Aug 26 Posted on

If you are trying to register a vehicle for which you don�t have a valid title, you may be able to do so by obtaining a bonded title from the Iowa Department of Transportation. The same process applies whether you never received a title when you acquired a vehicle, received a defective title, or received a title but lost it before transferring it into your name.

Learn everything you need to know about the Iowa bonded title process below, and contact Single Source Insurance to get the bond you need today.

What Is a Bonded Title?

A bonded title protects the state and anyone who might later show up and be able to prove a valid ownership interest in the vehicle. The bond is your guarantee that you are the legitimate owner and will cover any financial loss suffered by another party if that turns out not to be true.

Who Needs a Bonded Title?

Anyone who lacks a proper title and is attempting to retitle or register a vehicle in their name needs a bonded title. This requires the purchase of an Iowa title bond.

How Does the Process Work?

The Iowa bonded title process is essentially the same regardless of the reason why you don�t have a valid title. You�ll need to follow these steps:

  • Complete and sign an Application for Registration and Bonded Certificate of Title for a Vehicle.
  • Attach any documentation you have to support your ownership claim, such as a Bill of Sale, receipt, or cancelled check for the purchase.
  • Submit the completed application and proof of ownership to the Iowa DOT�s Office of Vehicle & Motor Carrier Services, P.O. Box 9278, Des Moines, IA, 50306.
  • The DOT will do a title record search and notify any owner on record with instructions to claim the vehicle or waive any further claim on it within 10 days of the date of mailing. If a waiver is received or there is no response, the DOT will continue processing the bonded title application.
  • The DOT will appraise the vehicle and send you a bond form stating the vehicle�s value and the required title bond amount (1 � times the vehicle�s appraised value).
  • Once you�ve purchased a three-year title surety bond, send the bond receipt and a letter authorizing the county treasurer to issue a bonded title to the DOT’s Bureau of Investigations and Identity Protection. You will be contacted by an investigator to verify the information you provided with your application.
  • When you receive an authorization letter from DOT, you�ll need to take it to your county treasurer�s office within 30 days to apply for the title certificate, pay the fees and any taxes due, and register the vehicle.

The three-year term of the surety bond gives anyone with an ownership interest in the vehicle three years to file a claim for compensation. If there are no claims on the bond within that time, you will be issued an unbonded title.

If a claim is filed, the surety company will attempt to negotiate a settlement if they determine that the claim is valid. If no settlement is agreed upon, the surety company will pay the claim on your behalf, but you are legally obligated to reimburse the surety for that amount.

What Does It Cost?

Surety bond premiums are calculated as a small percentage of the required bond amount. At Single Source Insurance, all Iowa bonded title premiums will have a $100 minimum. For bonds with a penalty over $7,000, the premium is 1.5%. For bonds with a premium over $25,000, we will run a credit check.

Get A Quote

Our experts at Single Source Insurance will work with you to get you the best possible rate on the title bond you need. Contact us today.

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Arizona Bonded Title Process

Aug 24 Posted on

If you want to register a vehicle you have purchased or been given but do not have a title for it, there is a process that will enable you to obtain a bonded title. A bonded title is a title with a surety bond attached to protect the MVD and the rightful owner if it turns out that someone else has a legitimate ownership interest in the vehicle. Learn more about the Arizona bonded title process below, and contact Single Source Insurance to get the bond you need today.

Who Needs a Bonded Title?

Not everyone who lacks a title for a vehicle needs to go through the somewhat complicated process for getting a bonded title. If you once had a title for the vehicle in question at one point but no longer do, you can get a duplicate title from your local DMV office for only three dollars.

If you never had a title for the vehicle, or if the title is defective in some way, you�ll have to apply for a bonded title.

How Does the Process Work?

There are several steps you�ll need to take before you can even submit an application for a bonded title. Here�s what you need to know about the Arizona bonded title process:

  1. If your vehicle is an in-state vehicle, ask your local MVD office to perform a motor vehicle record search to identify the person that most recently held the title to the vehicle. This will cost you $3. For an out-of-state vehicle, you�ll need to work with the other state�s MVD.
  2. If the vehicle record search turns up a lien on the vehicle, you�ll need to obtain a lien release that specifies the vehicle�s year of manufacture, make, and VIN.
  3. Have a law enforcement officer perform a Level 1 inspection. Everyone applying for a bonded title in Arizona must have this done to verify the VIN and ensure that the vehicle has not been reported as stolen.
  4. Send certified letters to anyone whose name appears on the record search from Step 2, as well as to anyone involved in selling the vehicle to you, requesting that they sign the title over to you and send it to you or send you a notarized letter stating that they have no ownership interest in the vehicle. Make it clear that they have 30 days to respond.
  5. If you get an answer to your certified letter(s), you will either have the title to the vehicle or you all the documentation you need to obtain a new title�without any need for a surety bond. If you get no response, obtaining a surety bond is mandatory.
  6. Fill out and sign a Bonded Title Affidavit (available from the Arizona MVD) to explain how you acquired the vehicle and why you don�t have a title for it.
  7. Take your completed application and all of the documentation you�ve gathered (including the responses to your certified letters, or proof that you sent letters if you received no response) to the MVD office for review and determination of the vehicle�s value. You may be told you need to get your vehicle inspected at this point.
  8. Purchase a 3-year Arizona title bond with a bond amount equal to 1.5x the value MVD assigned to the vehicle. The bond certificate will arrive in the mail.
  9. Take the bond and all other documents to the MVD for approval and issuance of a bonded title.

The bond is your guarantee that you are the rightful owner of the vehicle. At any time during the three years that the bond is in force, anyone with a legitimate ownership interest in the vehicle can come forward and file a claim against the title bond. The MVD itself can also file a claim if there is reason to believe you should not have been given a bonded title.

The surety company may pay the claim for you to expedite matters, but you must then reimburse the company in full. Even if you sell the vehicle during that 3-year period, you remain obligated to pay any valid claims against the bond.

What Does It Cost?

You will pay a small percentage of the bond amount as the premium for the title bond. At Single Source Insurance, all Arizona bonded title premiums will have a $100 minimum. For bonds with a penalty over $7,000, the premium is 1.5%. For bonds with a premium over $25,000, we will run a credit check.

Get Bonded Today

At Single Source Insurance, our experienced surety bond agents are well acquainted with the lost title bonding process and will help you get the Arizona title bond you need at the best possible premium rate.

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Texas Bonded Title Process

Aug 23 Posted on

Don�t sweat it if you don�t have a title for a vehicle you want to register. There�s a process to obtain a new title if you never got one when you bought a vehicle, were given a flawed or incorrect title, or received a perfectly good title but lost it before you had a chance to register the vehicle. Learn more about the Texas bonded title process below, and contact Single Source Insurance to get the bond you need today.

What Is a Bonded Title?

A bonded title allows you to register a vehicle even if there is a possibility that someone will later turn up and challenge your ownership of the vehicle. This article walks you through the process for obtaining a bonded title in Texas, step by step.

Who Needs a Bonded Title?

If you want to register a vehicle for which you don�t have a good title or to transfer ownership of the vehicle to someone else, you�ll need to get a bonded title. To qualify for a bonded title:

  • You must be a resident of Texas or be stationed in Texas on military duty
  • You must have possession of the vehicle
  • The vehicle cannot be abandoned, stolen, junked, or the subject of a pending lawsuit, and it must be a complete vehicle, with a motor and frame, though it need not be operational
  • There cannot be any liens against the vehicle

How Does It Work?

The state�s main concern is trying to establish your ownership of the vehicle, so the Texas bonded title process will involve filling out forms and obtaining the appropriate signatures.

  1. Complete Form VTR-130-SOF, �Statement of Fact for Bonded Title.� One of the items on the checklist provided on the form is a pencil tracing of the vehicle’s VIN plate. Another is the current value of the vehicle as appraised by a licensed motor vehicle dealer or insurance adjuster and recorded on Form VTR-125, or from a nationally recognized valuation guide such as the National Auto Dealers Association reference guide.

    Bring or mail the completed form to your local DMV office along with any evidence you have to help prove your ownership, such as a Bill of Sale, invoice, payment receipt, or cancelled check. Be prepared to pay the $15 administrative fee (by cash, check, or money order).

    Completing this application for a bonded title is rather straightforward if the vehicle was previously titled and/or registered in Texas, but if not, an additional step is necessary.

  2. Take the vehicle to a Texas certified Safety Inspection Station and request verification of the VIN on a Vehicle Inspection Report.Only for vehicles not previously titled and/or registered in Texas. You’ll also need to have a VIN inspection performed by an auto theft investigator in the local police or sheriff’s office, to be documented on a Form VTR-68-A, “Law Enforcement Vehicle Identification Number Inspection.” This form also includes questions you must answer about the vehicle, how you got it and why you don’t have a valid title for it.
  3. Upon approval of all forms and documents submitted, the DMV will send you a letter telling you the required amount of the title bond you will need to purchase. The amount will be 1.5x the appraised value of the vehicle, unless the vehicle is 25 or more years old, in which case the value will be the actual amount from the bill of sale or $4,000, whichever is higher.
  4. The approval letter is good for one year. Within that year, you must purchase a three-year Texas title bond.
  5. Within 30 days of purchasing the surety bond, take the following to your county�s tax office:
  • the approval letter from the DMV
  • all documents you submitted with your bonded title application
  • the surety bond certificate
  • proof that the vehicle is insured
  • a completed �Application for Texas Certificate of Title�
  • If the vehicle is an import, you�ll also need to provide a Customs Declaration.

You will receive a Texas bonded title, which protects the DMV and anyone with a legitimate ownership interest in the vehicle from financial loss.

The title bond remains in place for three years. If nobody contests the vehicle�s ownership by filing a claim against the bond within that time, at the end of the three years, the DMV will issue an unbonded title.

What Does It Cost?

You will pay a small percentage of the bond amount as the premium for a vehicle title bond. At Single Source Insurance, all Texas bonded title premiums will have a $100 minimum. For bonds with a penalty over $7,000, the premium is 1.5%. For bonds with a premium over $25,000, we will run a credit check.

Get Bonded Today

Contact Single Source Insurance today for all of your bonding needs. You can count on us to get you the best possible deal on a Texas title bond.

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Florida Bonded Title Process

Aug 22 Posted on

This article outlines the steps required to obtain a new title in Florida when ownership of a vehicle has not been transferred or definitively established. One key step in the process of obtaining a new title is purchasing a Florida Title Bond, which protects the public and the Department of Highway Safety and Motor Vehicles (DHSMV) against financial loss in the event that a new title is issued to someone who is not a vehicle�s rightful owner.

Learn more below, and contact Single Source Insurance to get the bond you need today.

What Is A Bonded Title?

A bonded title is proof of ownership for people who have purchased a vehicle but don�t have a properly assigned title they can use to register it. Perhaps they were never given a title by the seller, or maybe they received a title that was not properly signed over to them, or they lost it before it was transferred into their name.

Who Needs a Bonded Title?

The only way to know for certain whether you are eligible for a bonded title is to ask your local DHSMV office. Explain the exact circumstances, and they will inform you as to whether or not you can get a bonded title.

Keep in mind that you are not eligible if the vehicle in question was last registered in a state other than Florida. DHSMV can tell you what other options you may have for getting your vehicle registered in such cases.

You don�t need a bonded title if you have misplaced a title that was already in your name. In such cases, you can get a duplicate certificate by applying for one from DHSMV and paying a replacement title fee.

How Does It Work?

Here are the key steps in the Florida bonded title process:

  • Complete Part A of DHSMV form HSMV 82042, �Vehicle Identification Number and Odometer Verification.� This involves signing an affidavit and an odometer declaration.
  • Have a Florida Notary Public, licensed auto dealer, police officer, tax collector, or DHSMV employee do a physical check of the vehicle to verify the VIN and the odometer reading and complete part B of the HSMV 82042 form confirming that information.
  • Complete and sign the �Affidavit to Accompany Application for Bonded Title� form, HSMV 82026. This is your attestation that you are the rightful owner of the vehicle in question.
  • Purchase a Florida title surety bond for twice the appraised value of the vehicle. Use the Kelly Blue Book or NADA national appraisal guide to get an idea of the bond amount required—but the surety company will do their own calculation as well.
  • Complete the HSMV 82042 form, �Florida Application for Certificate of Title With/Without Registration.�
  • Submit all completed paperwork to DHSMV. Upon approval, you will receive your bonded title from the DHSMV.

What Happens if a Claim is Filed?

Title bonds cannot be cancelled or refunded, because a claim could be filed against a bond at any time. It could be years before a lien holder or previous owner surfaces and makes a claim for the vehicle being fraudulently titled. In that event, or when any other valid claim is made against a title bond, the surety company that issued the bond will pay it�then they will turn to the person that purchased the bond for reimbursement.

What Does It Cost?

The premium for a Florida title bond is a small percentage of the required amount of the bond, which is twice the appraised value of the vehicle. At Single Source Insurance, all Florida bonded title premiums will have a $100 minimum. For bonds with a penalty over $7,000, the premium is 1.5%. For bonds with a premium over $25,000, we will run a credit check.

Get Bonded Today

Contact us today for help understanding the Florida bonded title process or to request a quote on the bond you need in order to register or transfer ownership of a vehicle.

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Where Can You Purchase a Surety Bond?

Jul 24 Posted on

If you�re looking for information on where you can purchase a surety bond, you�ve come to the right place. Single Source Insurance is a nationwide provider of a full range of bonds. We offer quick turnarounds and competitive rates. Browse our site to find the bonds you need, or contact us to speak with a knowledgeable agent today.

Who Sells Surety Bonds?

Most companies that sell surety bonds are insurance companies or subsidiaries of insurance companies. Some surety bond providers are affiliated with banks, and some are completely independent.

  • Bond producers are essentially agents or brokers who work with a network of companies that underwrite and issue surety bonds, though some may have an exclusive arrangement with a single surety bond company. Producers with a large network have the advantage of being able to obtain competitive quotes for a bond applicant, resulting in a lower bond cost. Producers typically help applicants gather information and documents that can help them meet a surety bond company’s underwriting requirements. A bond producer may be the best option for someone who has no experience purchasing a surety bond.
  • Property and casualty insurance companies often are also in the surety bond business. Working with an insurance company cuts out the middleman and may be an appropriate option for those who have obtained surety bonds in the past and understand the process.

How Do I Choose a Surety Bond Provider?

No matter how highly rated a surety bond provider may be, you can only use its services if it is 1) licensed to conduct business in your state and 2) approved by the party requiring you to obtain a bond�i.e. the obligee protected by the surety bond agreement.

Licensed in Your State

Many surety bond providers are licensed in multiple states, so just make sure your state is one of them. The United State Treasury, Bureau of the Fiscal Service maintains contact information for state insurance departments that license surety bond companies, so you can check to see whether a given surety bond provider is licensed in your state.

At Single Source Insurance, we are pleased to hold licenses to provide many bond types nationwide.

Certified for Federal Contracts

If you do business with the federal government, which is often the case with construction contractors, you’ll need to make sure that you choose a surety company that is certified to issue bonds for federal contracts. The U.S. Treasury Department also maintains a list of certified surety bond companies approved to issue surety bonds for federal contracts.

SBA Approved

If you�re thinking about applying for a Small Business Administration (SBA) surety bond guarantee, you�ll need to find a participating surety bond provider that is licensed in your state. A list of approved agents  is available from the SBA Surety Bond Guarantee Program.

Highly Rated

Look for a surety bond provider that is highly rated by AM Best, a private agency that assigns ratings to surety companies. Look for a company that is rated �A� or better. Click here for definitions of the various ratings assigned by AM Best.

Get Bonded Today

Finding the right provider to meet your surety bond needs can save you time and money and enable you to focus on growing your business. At Single Source Insurance, we�ll gladly answer any questions that will help you decide whether we�re the right surety bond company for you.

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What is an NMLS Electronic Surety Bond?

Jul 24 Posted on

An NMLS electronic surety bond (ESB) only differs from a traditional paper surety bond in one respect: the method of delivery. Instead of having to be printed and mailed to the obligee, an ESB is delivered by being uploaded electronically through the NMLS portal.

NMLS stands for the Nationwide Multistate Licensing System (originally known as the Nationwide Mortgage Licensing System & Registry). Created to facilitate state-level management of licensing for the mortgage industry, its purpose has been broadened to include licensing of non-depository financial services companies, such as collection agencies, money transmitters, and non-mortgage lenders.

Existing paper surety bonds are being converted to electronic bonds, and new license bonds in the financial services industry are being issued in ESB form as more and more state agencies are relying on NMLS to efficiently track the fulfillment of surety bond requirements.

Who Needs It?

Today, the majority of people seeking licensing in the financial services industry are actually obtaining an NMLS electronic surety bond. The specific type of surety bond you need to obtain (typically a license and permit bond), the required bond amount, and the terms and conditions of the bond are communicated to license applicants at the time of application. You can easily check this map to see whether your state has adopted NMLS ESB and is no longer accepting traditional paper surety bonds. As of this writing, all but 18 states have made the switch.

How Does It Work?

The front-end of the bond issuance process has not changed. A bond applicant still provides the same information to the surety company outside of NMLA. The underwriting process also remains the same. The only real change is that the surety company creates the bond and any riders in NMLS (rather than by filling out paper forms) and submits the bond and any riders to NMLS through the electronic portal.

From a legal standpoint, an ESB and a paper surety bond are identical. They use the same language and create the same legal obligations for each party�the state agency requiring the license bond (the obligee), the financial services industry professional required to obtain the bond as a condition of licensing (the principal), and the company underwriting and issuing the bond (the surety).

What is different is the improved ability of state licensing agencies to coordinate and share information across state lines and with certain federal agencies, which in turn improves their ability to protect consumers.

What Does It Cost?

There is no additional cost to you to obtain an ESB compared to a traditional paper bond. The cost of an ESB is still calculated by the surety as a percentage of the total bond amount required by the obligee.

Get Bonded Today

Our experienced and knowledgeable staff welcomes any questions you may have about electronic surety bonds. Single Source Insurance is a leading provider of surety bonds nationwide. Browse our site or contact us today to get the bonds you need at competitive rates.

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Do You Need a Surety Bond to Obtain a Liquor License?

Jul 24 Posted on

The short answer is: it depends. Whether or not you will need a surety bond in order to obtain a liquor license depends on the state in which you will operate your business. Not all states require an alcohol surety bond as a condition for obtaining a liquor license. Learn more below, and contact Single Source Insurance today to discuss your bonding needs with an experienced agent.

What is a Liquor License Bond?

A liquor license bond (aka alcohol bond) is a type of license and permit bond required in many states as part of the process for becoming licensed to sell liquor for consumption on or off the seller’s premises. Some municipalities also issue local licenses and require a surety bond from licensees. Other types of alcohol surety bonds may be required in order to engage in other alcohol-related businesses, such as brewing, distilling, transporting, warehousing, or wholesaling alcoholic beverages, but our focus in this article is solely on surety bonds needed by those applying for or renewing a liquor license.

The purpose of a liquor license bond is to ensure a licensee�s compliance with all applicable state laws governing the sale of alcohol. It guarantees the payment of taxes due on alcohol sales and any fines incurred by violating the law�for example fines for selling alcohol to a minor.

Who Needs It?

Anyone applying for or renewing a liquor license in a state and/or municipality that imposes a requirement for a liquor license bond must purchase one.

How Does It Work?

The bond brings three parties together in a legally binding agreement:

  • The government agency requiring the bond (the obligee)
  • The liquor license applicant or licensee (the principal)
  • The company underwriting and issuing the liquor license bond(the surety)

The obligee sets the required bond amount, also known as the penal amount of the bond. Though this amount varies from state to state, it�s usually no higher than $10,000.

If the principal fails to remit the proper tax payments to the obligee as required, the obligee may file a claim against the bond in the amount of the unpaid taxes plus any fines.

The surety will determine the validity of a claim and try to negotiate a settlement. When no settlement is forthcoming, the surety will typically pay the claim on behalf of the principal. However, the fact that the surety pays a claim in advance does not let the principal off the hook. Nearly all surety bonds indemnify the surety and obligate the principal to reimburse the surety for claims already paid.

What Does It Cost?

The surety establishes the specific premium rate for each applicant based on the principal�s personal credit score and other factors pertaining to his or her creditworthiness, financial strength, and the likelihood of claims. Applicants with good credit may pay as little as 1% of the required bond amount. Those with poorer credit will likely pay more.

Get Bonded Today

Let the experts at Single Source Insurance help you determine the bonds you need for your alcohol-related business, or request a quote today.

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