Iowa Mortgage Broker or Banker Bond

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Who Is Required To Purchase an Iowa Mortgage Surety Bond?

Iowa can be confusing when it comes to determining if your company or you as an individual needs to purchase a mortgage surety bond.

Here's how the bond requirement breaks down based on the responsibilities of you or your company.

If you make or service at least four residential mortgage loans in a calendar year, you must be licensed as a mortgage banker.

If you sell or negotiate more than four residential mortgage loans in a calendar year, you must be licensed as a mortgage broker.

In both cases you're required to purchase a surety bond in the following amounts:

 

Individual Mortgage Originators

If you're a privately (individual) sell or negotiate mortgage loans, you must purchase a surety bond in the amount of $25,000.

If you're an employee of a company that's licensed as a mortgage banker or broker, you do not need an individual bond.

You are covered by the company's mortgage surety bond.

 

Real Estate Closing Agent

A real estate closing agent is not a party to the real estate transaction but is responsible for providing real estate closing services.

Real estate closing agents must purchase a $25,000 surety bond.

 

Why is an Iowa Mortgage Bond Required?

The Iowa Division of Banking is responsible for the licensing guidelines for mortgage companies.

This includes satisfying a series of requirements like:

• Submitting financial statements to prove financial stability
• Identifying primary business contacts and a qualifying individual
• Having a well documented business and marketing plan

These requirements are detailed more at the end of this page, but this process is designed so only the most qualified companies can obtain a license.

And yet, every year there's a handful 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

The mortgage surety bond you're required to purchase provides the financial compensation in the event any of these or similar actions occur.

If a customer is financially, and intentionally harmed, they can make a claim against the mortgage bond for financial compensation. The amount of any one claim or the sum or multiple claims is capped by the mortgage surety bond amount.

Here are the bond amounts for each license type.

 

How Much Does an Iowa Mortgage Surety Bond Cost?

All mortgage bonds are credit driven bonds. This means you will require a custom price based on a rate that is quoted from a surety.

A surety is an insurance company that chooses to underwrite mortgage surety bonds.

The primary factors every surety uses to quote their rate are:

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

The quoted rate multiplied by your bond amount is the price you'll pay.

Even though every surety uses the same or similar factors to determine a rate, the rates they quote can be vastly different.

Even we don't understand why it happens but we help customers every day who receive quotes that are 1% to 3% different for the same mortgage surety bond.

And this is where we can save you a lot of money when you use us to purchase your bond.

 

The 3 Steps To Save Hundreds Of Dollars When Purchasing Your Bond

We are Surety Bonds Direct, a specialized surety agency. We work with the highest A-rated sureties to find our customers the lowest possible rate for their surety bond.

We routinely save our customers hundreds of dollars when purchasing their mortgage bonds.

 

Step 1: Request Your Free Quote

Requesting a quote is an easy process. You can either complete our online quote form or you can call a bond specialist at 1-800-608-9950.

There is no obligation to purchase by requesting a quote.

 

Step 2: Sit Back And Let Us Price Shop For You

Once we receive your quote, we'll work with the sureties that specialize in mortgage bonds to find you the lowest rate.

This process is typically fast, requiring at most one business day.

 

Step 3: Purchase Your Bond If The Price Looks Good

Once we get the lowest rate, we'll contact you through phone and email.

If the price you get looks good, and you're ready to purchase, you can complete an online order form to purchase your bond.

When you purchase your bond, it's one payment for the bond term or 12 months in this case. More on that below.

 

Example Pricing for an Iowa Mortgage Surety Bond

Let's look at the $100,000 bond amount for example pricing.

Pay attention to the rates and how one to two percentage point can make huge difference in the price, saving you hundreds, even thousands of dollars.

Imagine getting a rate one to two percentage points lower. That's over a thousand dollars you can save and spend on other licensing fees.

Get your hard price quote today. All mortgage surety bond quotes are good for 30 days, giving you plenty of time to plan appropriately.

Remember there is no obligation to purchase when you get pricing.

Go request your price quote today. Remember, this is free information for you.

 

How to File Your Mortgage Surety Bond?

Once your payment is processed, our issuance team will immediately begin the process to issue your bond with the National Multi-State Licensing System.

We provide you with detailed instructions to help us file your bond for you. The process takes only a few minutes.

 

How Long Does an Iowa Mortgage Surety Bond Last?

The Iowa Division of Banking requires an active surety bond on file with the NMLS (National Multi-State Licensing System) to legally conduct business in Montana.

Your surety bond has a bond term of 12 months from the active date you choose when you purchase your bond.

When your renewal date approaches, you'll have to pay a renewal premium to keep your bond active for the following 12 months.

 

How Do You Renew a Mortgage Broker Bond?

Renewing a mortgage banker or broker bond is easy. As your bond expiration date approaches, your bond specialist will contact you 30 to 45 days in advance to ensure you don't miss paying the renewal premium.

Your bond specialist will have renewal pricing already quoted allowing this process to get finished with little headache or effort.

Once you pay the renewal premium, your bond remains active. You don't have to do anything.

 

Mortgage Bonds And Getting Your Iowa Business License/Registration

The NMLS checklist compiler does a good job in Montana in outlining all of the required licensing steps.

Here is a brief rundown of the important steps that are common for each license classification.

Submit Financial Statements

You must submit official financial documents to prove you have a positive net worth.

If you're a new start-up business, you can submit an initial Statement of Condition instead.

 

Outline Business Structure

Outline how your business is structured including all business formation documents.

• Unincorporated association
• Corporation
• Limited Liability Company
• Limited Liability Partnership
• General partnership
• Not for Profit Corporation
• Trust

You're allowed to use "doing business as" names and trade names but they must be approved. This typically means being registered with the Montana Secretary of State.

If you're using a trade name you'll need to provide a Certificate of Registration of Assumed Business Name from Montana's Secretary of State for each trade name and DBA you have.

 

Criminal Background Check

All licenses are required to provide fingerprints for a criminal background check.

 

Pay Required Fees

• Purchase your surety bond
• $500 license registration fee
• $120 NMLS processing fee