Arkansas Mortgage Broker, Banker or Servicer Bond

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Who is Required To Purchase an Arkansas Mortgage Broker Bond?

Arkansas Securities Department issues the following individual mortgage licenses

• Mortgage lenders
• Mortgage brokers
• Mortgage services
• Mortgage loan originator

All of these licenses have a surety bond requirement, but mortgage loan originators are handled a little differently.

If you're going to be an independent loan originator, you will have to purchase a surety bond and be subject to the following rules below.

If you're going to be employed by a mortgage broker, you will be covered by their company's surety bond.

What Are the Arkansas Mortgage Surety Bond Amounts?

Arkansas makes this very simple compared to most other states. All of the bond amounts are the same for each license classification.

The bond amount is based on the previous 12 months loan activity. This amount is the total possible financial compensation any one claim or multiple claims can be in the event of a legitimate claim.

You'll learn who the surety bond protects in the next section, but here are the amounts.

You'll also learn about how the price is determined, but it will be a small fraction of your specific bond amount.

Why is an Arkansas Mortgage Bond Required?

The mortgage surety bond's purpose is to hold you accountable to your promises as a licensed mortgage professional.

The Securities Department's goal is to only license the most qualified individuals and businesses. That's the reason for the licensing process. But the Department can't police every licensed professional so they use the surety bond as their only tool for accountability.

Yes despite the licensing requirements and even the surety bond, every year there will be a small number of mortgage professionals and companies who commit mortgage fraud to make more money:

Examples of fraudulent actions can include:

• Approving a borrower for a loan they can't afford
• Helping a borrower get approved for a loan by providing false information
• Hindering a borrower from getting approved by providing false information
• Pressing a borrower to enter a high commission loan to make more money
• Creating and charging fabricated fees

If a customer is harmed by these actions or similar actions, they can make a claim against the surety bond to remedy financial damages. But remember, the bond amount is the cap of any one or all claims.

How Much Does an Arkansas Mortgage Surety Bond Cost?

The bond amounts for mortgage professionals are large compared to other industries, but the price you'll pay will be a small fraction of your amount.

A special insurance company called a surety is responsible for underwriting these bonds.

The surety will primarily look at the following 3 factors when determining your price:

• Personal credit of the business owner or owners
• Mortgage and all financial lending experience
• Prior bond claims if any owner has been licensed in the past

From these factors, they will determine a rate and this rate multiplied by your bond amount is the price you'll pay for your bond term.

You'll learn more about the bond term below, but in Arkansas, it's 12 months from your bond activation date.

Here's How To Save Hundreds, Even Thousands of Dollars

Each surety will assess an applicant using their own assessment and risk exposure. Because of this, the rate one surety quotes is often vastly different from another.

We are Surety Bonds Direct, a specialized surety agency. We work with our large network of A-rated sureties to price shop and find the lowest possible price for our customers.

We don't even know why, but we've seen the same applicant get rates that are two to three percentage points different.

Let's look at pricing examples so you can see how much of the pricing fluctuates based on different rates.

Here is example pricing so you can see how the price changes drastically based on the rate.

The rates used in the table are from really good to average.

Let's use the $150,000 bond amount in this example.

You can get your pricing today and know exactly what you will have to pay to meet this license requirement.

And if you're not ready to purchase, all quotes are guaranteed for 30 days so there is no rush or pressure if you're not ready to purchase.

Go request your price quote today. Remember, this is free information for you. There's no obligation to purchase. Quotes are good for 30 days.

If you prefer to speak with a bond specialist, you can call 1-800-608-9950.

What Do You Do After You Purchase Your Mortgage Surety Bond?

When you're ready to

After your payment is complete, our bond issuance team will get to work preparing your bond with the:

• Correct bond form
• Required signatures and seals
• Power of attorney

Mortgage bonds are e-filed with the National Multi-State Licensing Agency (NMLS).

We will e-file your bond for you to make the licensing process easier. You'll receive short instructions so we can get this done for you the same day.

How Long Does an Arkansas Mortgage Surety Bond Last?

The bond term is 12 months from the active date. The active date is a date you choose when you purchase your bond. You typically want to sync it up a couple days before you submit your application.

As your 12 month term approaches the end, you'll have to renew your bond for the following year. And you'll repeat this process for as long as you're in business.

Renewing your bond is easy.

As a Surety Bonds Direct customer, you're assigned your own bond specialist to manage your bond for you.

As your renewal date approaches, your bond specialist will contact you to remind you of the expiration date and have renewing pricing ready to go.

If you need to increase or decrease your bond amount, this is when you'll make those changes. It only takes 1 to 2 business days once you request your price quote.

Click below and get this done today.

Mortgage Bonds And Getting Your Arkansas Business License/Registration

Each license has slightly unique requirements. Here are the high level steps so you know what to expect.

Use the NMLS Checklist Compiler to help with the details of each step.

Financial Statement and Net Worth

You'll have to upload a prepared financial statement within 90 days for your most recent fiscal year end. A prepared statement typically means a CPA prepared statement including a balance sheet and income statement.

Business Formation Documents

Include a full business plan including:

• Marketing strategies
• Products you're going to offer and the plan for each
• Target markets for each product offering
• Fee schedule
• Operating structure

Management and Organizational Chart

The management chart must show:

• Directors
• Officers
• Managers

This must also outline the compliance reporting and internal audit structure of the business.

The organization chart outlines:

• Direct owners
• In-direct owners
• All subsidiaries and affiliates

Identify the Resident Agent and the Qualifying Individual

The qualifying individual is called the managing principal. This person needs to meet the requirements for being the primary personal responsible for the operations of the business.

Non-Primary Contact Employees

You need to identify and list the primary contacts including those in-charge of:

• Licensing
• Examinations
• Public consumer complaints
• Regulator complaints

Business and Marketing Plan

You will need to upload the business and marketing plan including:

• Marketing strategies
• Products
• Target markets
• Fee schedules
• List of services
• List of vendors

Plus you must keep a log of all business activity throughout the year.

Criminal Background Checks

The last major requirement is a criminal background check of all owners and indirect owners.