Arizona Mortgage Banker Bond

Arizona Mortgage Banker Bond

The Arizona Department of Financial Institutions (AZDFI) requires that all Arizona mortgage bankers and commercial mortgage bankers hold an active license in order to be in business, per Arizona Statutes ARS 6-944, and ARS 6-975, respectively. Both licenses require a Mortgage Banker Bond that Jet Insurance Company offers. The bond is a fiscal promise from Jet to the AZDFI allowing licensure by providing financial protection to the public should they be injured due to fraudulent actions of the mortgage bank. All licensing and other paperwork is done electronically through the Nationwide Multistate Licensing System (NMLS).

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Get a quote and save online now in a minute! With Jet you have the advantage of working directly with the surety carrier without any middleman slowing down the approval process.

What Is the Lowest Price for the Bond?

Jet Insurance Company offers the Mortgage Banker and Commercial Mortgage Banker bond starting at $100 per year or $10 per month, for the $25,000 bond limit. The bond limit will be based on the total annual loans and Jet rates are based on a percentage of that limit. Our rate for the bond will vary based on the personal credit of the banker and we may need to review the bank’s financial statements and experience. Below are rates available for our preferred tier.

Bond TermMonthlyAnnual
$25,000$10$100
$50,000$19$188
$100,000$38$375
Arizona Mortgage Banker Bond Pricing

Two and three year payment options are also available from Jet. For a $25,000 limit, rates start at $100 and $175, respectively. For larger bond limits, there may be a need for a manual review by one of our underwriters.

How Is the Bond Limit Determined?

For commercial mortgage bankers, the bond amount is $25,000 if the only investors are Institutional Investors, otherwise the bond amount is $100,000.

For non-commercial mortgage bankers, the bond limit is based on the total assets of the bank plus the unpaid balance of loans contracted to service others at fiscal year end. When the total assets and unpaid balance of loans amount is $500k or less, the bond limit is $25,000. For each additional $100k of loans contracted, $5k is added to the bond limit. That holds true until the threshold hits $1mil, at which point the additional $5k is added for each $1.8mil fraction over $1mil. At $10mil, an additional $5k is only added for each $18mil over $1mil. For all companies over $100 mil the bond limit stays at $100k.

Below is a simple graphical representation of how a mortgage banker’s bond limit is determined:

Total Assets & Unpaid LoansBond Limit
$500k or less$25,000
$500k-1mil$25,000-50,000
$1mil-10mil$50,000-75,000
$10mil-100mil$75,000-100,000
$100mil or more$100,000
AZ Mortgage Banker Bond Limit Calculation

What Is the Purpose of the Mortgage Banker Bond?

The Arizona State Legislature has laws in place (Arizona Statutes ARS 6-943) that mandate that all mortgage bankers operating in the state obtain a Mortgage Banker or Commercial Mortgage Banker Bond. The NMLS’s job is to employ benefits of local financial service regulation nationwide by coordinating efficient sharing of information between regulators and industries.  Jet, as the surety company, puts a monetary promise in place to the NMLS which states that victims of fraud, embezzlement, or other illegal practices will receive money, up to the bond limit, for losses endured at the hands of the violating mortgage banker.

A mortgage banker has the opportunity to pursue self interest for their own financial gain at the disservice of their own clients. The Mortgage Banker Bond is a tool that serves the State’s purpose to protect the public from financial injury, and at the same time, requiring a surety company (Jet) to guarantee compensation to injured parties.

Jet’s goal is to uphold our legislative duty to provide financial protection to you, at the lowest possible price.

How Does the Application Process Work With Jet?

Jet’s online application is simple. It will ask for a social security number, plus other basic business information. A soft credit check will take place, only takes seconds, and won’t affect your credit score at all.

For larger bond limits, a manual underwriting process may need to be undertaken.

After our screening, your bond will be available for purchase and upon completion, a digital copy will be available.

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How Does the Bond Get Filed to the NMLS?

The basic process is portrayed in the image below, but you can get more details on the Arizona Mortgage Banker Application Checklist. Essentially, you’ll need to select Jet as your surety company and grant access within the Nationwide Multistate Licensing System (NMLS). 

NMLS Bond Filing Process
Click to View Full

Can I Cancel My Bond and Get a Refund?

With Jet you can in moments. The Mortgage Banker bond can be cancelled via email or mail to Jet. We will cancel the bond upon receiving the request, but know that the bond will stay active for a 30-day cancellation period with the NMLS. 

Jet will calculate any refundable unearned premium from the cancelled bond. However, Jet will need to wait 30 days before the auto-withdrawal ends.

Do I Need to Renew the Mortgage Banker Bond?

Should you be on Jet’s monthly payment plan, no! The bond will remain active so long as automatic payments are kept up. In the case that the bond limit needs to change,  reach out to Jet via phone or email and we will adjust the bond rate accordingly. The NMLS will be notified of this change immediately.

For those on an annual payment plan, you will be notified by Jet regarding the renewal of your Mortgage Banker or Commercial Mortgage Banker Bond via email and mail. You will have the opportunity to notify us if there is a new bond limit and we will adjust the renewal rate accordingly. There is no additional paperwork to renew your bond; only payment is required by Jet. A copy of the updated bond plus receipt of purchase will be sent right to you, and the NMLS will be notified.

How Does a Principal Avoid Bond Claims?

All Arizona mortgage bankers and commercial mortgage bankers should be familiar with the regulations and lawful duties they must oblige to conduct any business. A thorough review of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (S.A.F.E.) should be conducted. Also, you should be familiar with Arizona Statutes 6-946. To save time, Jet has summarized the most important points below:

Violations of Mortgage Banker RequirementsLawful Mortgage Banker Duties
Lying about required fees to collect more funds from a clientMeeting licensure requirements which include bonding requirements
Breaking anonymity by releasing private client information to the publicEstablishing a written contract between the debtor and lender which is agreed and signed by both before any lending occurs
Failing to maintain correct and complete records that reflect the financial condition of the businessAccepting only cash as payment for a mortgage and not an assignment of wages or securities
Failing to recognize generally accepted accounting principles and practices set by the Securities and Exchange CommissionKeeping accurate accounting records which can be accessed by the superintendent of the AZDFI for investigation at any given time
Requiring an advance or fee not stated in a written agreementAdvertising business services fairly as they are conducted
Arizona Mortgage Banker Duties & Complaints

Complaints by the public may be filed through the NMLS's complaint form by anyone who has been unlawfully fiscally injured by an Arizona mortgage banker. An investigation of the complaint would be conducted by the NMLS. If necessary, disciplinary action would be pursued against the mortgage banker.

If the mortgage banker breaches their contract through illegal action such as secretly imposing a higher mortgage rate or charging hidden fees, the client can file a claim on the surety bond.

What Happens if I Get a Bond Claim?

If you receive a bond claim, promptly reach out to Jet and send all relevant information over to us. We will begin an investigation on your behalf and defend you against false claims.

Should the claim be valid, Jet will have to move forward by providing payment to the injured for the fiscally up to the maximum bond limit. Even though funds will be paid out, the mortgage banker is still responsible for their actions and consequently must repay the surety company for paid out claims. With surety bonds, Jet acts as an intermediary to get necessary funds to damaged parties, but the debt still remains to be repaid by the mortgage banker.

Are There Other Bonds That a Mortgage Banker Needs?

If the mortgage banker is conducting business for commercial debtors, then yes. The Commercial Mortgage Banker bond must be acquired which is the same bond but with slightly different bond limits according to whether the bank’s investors are institutional or not.

If you are in need of further details on the mortgage industry, licensure processes in multiple states, and applicable surety bond regulations, take a look at Jet’s comprehensive Mortgage License Bonds Guide.

Arizona Mortgage Banker Bond Form

Notary Bond Application:

X

Business Information:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Employee Dishonesty Bond Application:

Business Information:

Business Description:

Coverage Requirements:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Contract Bond Application:

X

Business Information:

Owner Information:

Job Details:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Worker's Compensation Application:

X

Business Information:

Business Description:

Coverage Requirements

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information: