Alabama Mortgage Broker and Consumer Credit Bonds

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Who is Required To Purchase an Alabama Mortgage Broker Bond?

The Alabama State Banking Department is the agency that requires this mortgage broker surety bond.

Alabama is one of the few states that has one company license for all mortgage responsibilities including:

• Brokering loans
• Funding and underwriting loans
• Processing and servicing loans
• Lead generation

You only need one surety bond for a company, but the amount will change based on the amount of mortgages brokered, underwritten, and/or serviced.

 

The Alabama Mortgage Surety Bond Amounts

Alabama makes their mortgage bond amounts very straightforward.

Again, the determining factor is the dollar amount of mortgages brokered, serviced, and/or underwritten.

 

 

This bond amount is the total financial protection extended to customers in the event they are financially harmed by an act or mortgage fraud.

 

Why is an Alabama Mortgage Broker or Consumer Credit Bond Required?

Remember a surety bond is a legal contract that guarantees you'll comply with licensing laws and follow through on all of your promises to your customers.

The State Banking Division uses the licensing process as the first step to ensure only reputable businesses are able to get licensed.

But just getting licensed does not mean that every mortgage business will conduct business in an ethical way. The surety bond is the primary tool the State Banking Division uses to keep mortgage companies accountable year over year.

Here are examples of actions that classify as mortgage fraud:

• 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 charge fabricated fees

If and when a customer is financially harmed by these or similar actions, the customer can make a claim against the mortgage surety bond for financial reimbursement. However, the size of any one claim and all aggregate claims cannot be greater than the bond amount.

The bond amount you need will affect the price required to purchase and renew your bond.

 

How Much Does an Alabama Mortgage Surety Bond Cost?

Mortgage surety bonds in Alabama are credit driven bonds. This means the price you pay will be customized based primarily on the following factors:

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

A surety, an insurance company that underwrites mortgage surety bonds, will use these factors to determine a rate to charge.

This rate multiplied by your specific bond amount is the price you pay.

 

Getting a Lower Rate Can Save Your Hundreds Even Thousands of Dollars

We are Surety Bonds Direct, a specialized surety agency. We work with over a dozen of the highest A rated sureties and it's our sole purpose to price shop for customers and find the lowest possible price.

Here's how the process works:

 

Step 1: Request your price quote

It takes about 90 seconds to use our online quote form and tells us about your business.

 

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

It takes less than 1 business day to collect all the rates from all the sureties we work with.

Once we find the lowest rate you'll receive a phone call and email from your bond specialist with the lowest pricing.

 

Step 3: Purchase Your Bond

You are under no obligation to purchase when you receive pricing. But when you're ready you can purchase your bond online.

 

Alabama Mortgage Bond Price Example

Let's look at the $50,000 bond amount for pricing examples.

The rates in the table below are examples of really good rates to about average. Pay attention to how the price changes because we routinely find our customers one to two percentage point lower rates.

You can easily save $500 to $1,000 when we secure you a lower rate.

Take the money we can help you save and use it to pay the application fees and/or exam fees.

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.

There's no reason to request your free quote right now or call a bond specialist at 1-800-608-9950.

 

How To File Your Company Mortgage Broker Bond?

As you probably know, the entire licensing process is managed through the National Multi-State Licensing Service or NMLS.

Once you purchase your bond our issuance team will prepare your bond with the:

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

We'll provide you detailed instructions to authorize us in the NMLS so we can e-file your bond for you. The process takes only a few minutes.

 

How Long Does an Alabama Mortgage Surety Bond Last?

The Alabama mortgage surety bond has a bond term or 12 months from the effective date.

The effective date is the date your bond becomes active and you choose this date when you complete the checkout form.

12 months from this date, your bond will have to be renewed.

Renewing a mortgage broker and lender 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 pricing available and help increase your bond amount if your business grows to the next level, requiring a higher bond amount.

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

 

Mortgage Broker or Consumer Credit Bonds And Getting Your Alabama Business License/Registration

Here are the high level steps to obtain your license. If you have not already, use the NMLS checklist compiler. This will walk you through the process in more detail with the correct links to each page of the process.

 

Choose Your Location And Proof of Zoning

Every primary and branch location must show proof that the property is zoned commercial. You're not allowed to conduct business from a personal residence.

Each branch location requires the filing of the Branch Form (MU3).

 

File Paperwork for Key Employees

For every mortgage loan originator must have the MU4 Individual Form filed.

Every executive officer and control person must have MU2 Individual Form filed.

 

List and Register All "Doing Business As" Names

You'll need to show proof that your business is registered with the Secretary of State and any and all "Doing Business As" names.

 

Provide Financial Statement

You must provide a balance sheet, income statement, and all relevant financial notes prepared by a certified financial accountant.

 

Pay All Fees

Finally, complete your full application on the NMLS and your company license forms.