FOR ALL YOUR SURETY BOND NEEDS.
View all of the Alabama Surety Bond products that we offer at Single Source Insurance. This includes those for Birmingham, Mobile, Montgomery, Huntsville, and all others. Find Dealer Bonds required by the AL department of Revenue, Mortgage Bonds, Court Bonds and more. Simply fill out an application with our Alabama bonding company online, and you'll receive a quick turnaround!
Alabama mortgage broker bonds are a type of license and permit surety bond required by Alabama law as a prerequisite for obtaining and retaining a license to operate as a mortgage broker within the state. The bond is a mortgage broker�s guarantee to abide by three key pieces of legislation, namely the:
Together, these laws protect consumers against financial loss due to the unlawful or unethical acts of licensed mortgage professionals.
An Alabama mortgage broker bond also provides a source of funds for compensating consumers harmed financially by the actions of an Alabama mortgage broker.
Anyone applying for a new mortgage broker license or renewing an existing license in the state of Alabama must purchase an Alabama mortgage broker bond in the amount of $25,000, $50,000, or $75,000. The required bond amount (penal sum) for a given mortgage broker depends on the broker�s previous year�s residential loan volume (or estimated volume for a new mortgage broker lacking such history).
An Alabama mortgage broker bond is a legally binding contract between three parties:
The surety bond agreement obligates the principal to pay all valid claims, but in practice, the surety typically pays a claim in advance on behalf of the principal, who must subsequently reimburse the surety.
The reason for this is simple. When the surety agrees to issue a mortgage broker bond, a line of credit is established for the principal to serve as a source of funds for paying claims. The surety will investigate any claim submitted by a consumer claiming to have suffered a financial loss caused by the principal. If the claim is found to be valid, the surety will pay it, drawing against the principal�s line of credit, thereby creating a debt owed by the principal to the surety.
This practice ensures prompt payment of a valid claim and allows the broker to repay the credit extended by the surety in installments over a certain period of time.
The cost of an Alabama mortgage broker bond is a small percentage of the bond�s $25,000, $50,000, or $75,000 penal sum. The surety is primarily concerned about the risk of extending credit to the principal. The principal�s personal credit score is the best indicator of creditworthiness, and the individual�s industry experience is used to assess the likelihood of claims against the bond.
The surety considers these and other factors in determining the premium rate for a given bond applicant. Those with good credit and a low likelihood of incurring claims will pay a lower premium rate than applicants with poor credit or a history of prior claims. The most qualified principals may pay a premium rate as low as 1%.
Request a convenient online quote today, or call to speak with one of our experienced professionals about the Alabama mortgage broker bond you�re seeking.
