what is a surety bond,if they say a license requires you to provide a 10000 bond?what does it mean?

Question

mortgage broker license

Answer 1

A mortgage broker bond is required by the state in which a mortgage broker/lender may be operating. This bond guarantees the brokers license that they will abide by the laws, rules & regulations required under the mortgage broker licensure code. Each state has their own law and as such, each state has individual bond requirements.

Most insurance carriers require a completed application, a credit check on all owners of the company, business and personal financial statements and resumes for the key people to consider writing the bond.

Costs are usually around $10/thousand. So in your case it should be about $100.

The agency link below utilizes an insurance carrier that only requires a credit check of the owners and if it is a new company, resumes of the key people. No financial statements. This is assuming the insurance carrier approves the specific bond form.

Remember, with this bond as with all surety (except employee dishonesty type bonds) you (and your spouse) will be required to indemnify the insurance company. This means that if there is a claim against your bond and the insurance company pays out, you are required to reimburse the insurance carrier for their costs. So a significant part of the underwriting process is to determine if you are financial able to pay them back if a claim is paid.

Hope this helps.

Answer 2

Surety bond
From Wikipedia, the free encyclopedia
Jump to: navigation, search
A surety bond is a contract among at least three parties: (i) the principal, (ii) the obligee, and (iii) the surety. Through this agreement, the surety agrees to make the obligee whole (usually by payment of money) if the principal defaults in its performance of its promise to the obligee. The contract is formed so as to induce the obligee to contract with the principal, i.e., to demonstrate the credibility of the principal.

Suretyship bonds originated hundreds of years ago as a mechanism through which trade over long distance could be encouraged. They are frequently used in the construction industry: in order to obtain a contract to build the project, the general contractor (and often the sub-contractors as well) must provide the owner a bond for its performance of the terms of the contract. Conversely, owners and contractors may also provide payment bonds to ensure that subcontractors and suppliers are paid for work done. Under the Miller Act, payment and performance bonds are required for general contractors on all U.S. federal government construction projects where the contract price exceeds $100,000.00.

Surety bonds are also used in other situations, for example, to secure the proper performance of fiduciary duties by persons in positions of private or public trust.

A key term in nearly every surety bond is the penal sum. This is a specified amount of money which is the maximum amount that the surety will be required to pay in the event of the principal's default. This allows the surety to assess the risk involved in giving the bond; the premium charged is determined accordingly.

If the principal defaults and the surety turns out to be insolvent, the purpose of the bond is rendered nugatory. Thus, the surety on a bond is usually an insurance company whose solvency is verified by private audit, governmental regulation, or both.

The principal will pay a premium (usually annually) in exchange for the bonding company's financial strength to extend surety credit. In the event of a claim, the surety will investigate it. If it turns out to be a valid claim, the surety will pay it and then turn to the principal for reimbursement of the amount paid on the claim and any legal fees incurred.

A bail bond is a type of surety bond used to secure the release from custody of a person charged with a criminal offense. Under such a contract, the principal is the accused, the obligee is the government, and the surety is the bail bondsman.

Examples of Surety Bonds:

Contractor License and Permit
Court
Customs
Lost Securities
Money Transmitters
Mortgage brokers
Motor Vehicle Dealers
Patient Trust Funds
Probate
Public official
Tax bonds
Telemarketing
Subdivision
Utility deposit
Wage and Welfare/Fringe Benefit (Union)
Public Warehouse
Supply bonds
Online Transaction Supply Bonds
Self–Insured Workers compensation
Insurance Company Qualifying
Reclamation
Examples of fidelity bonds:

ERISA
Business Service Bonds
Public Official
Manufacturers
Small Businesses
Non-Profit Organizations
Real Estate Managers
Title Agents
Financial institutions
Precious Metal Exposures
Armored Car

Answer 3

I'm not sure if this will help. I just purchased a motorcycle a few months ago, and have had hell trying to get the title in my name. So, what I had to do was go to the title co. and apply for a surety bond. What it does is just insures the vehicle or whatever for so long to ensure that it hasn't been stolen or been in a hit and run or very serious incidents. Then I think it takes a year to get the real title.