Prices for collection agency bonds vary state by state, but premiums generally range from $100 to $500 per year. Debt collectors are hired to retrieve debt payments from a company or individual and return that money to the client.Īlso known as a “debt collector bond" or “collection agency licensee surety bond" in Maryland, this type of policy is a guarantee you will refrain from unethical and illegal practices when collecting debt. Collection Agency BondĪ collection agency bond is required by state governments for agencies looking to make a profit when collecting outstanding debt for their clients. Premiums for mortgage broker bonds range from 0.75% to 3% of the total policy amount.
It also serves to protect borrowers from financial loss should you engage in illegal activities.
#BOND PRINCIPAL DEFINITION LICENSE#
Mortgage brokers in Illinois may know the bond as a “residential mortgage license bond.” This type of license bond is a guarantee you will run your brokerage business with honesty, integrity, and professionalism. Mortgage Broker BondĪ mortgage broker bond is required for mortgage brokers, or loan originators, to receive their license. Market rate for the premium of an auto dealer surety bond is usually 1% of the bond amount required in your state. Also known as “motor vehicle bonds" or “MVD bonds," they’re designed to protect consumers from fraud or wrongdoing on your end. Auto Dealer BondĪuto dealer bonds are required by the Department of Motor Vehicles for dealerships involved in selling, buying, or trading vehicles for sale or resale. For example, Nevada requires such professionals to maintain a $50,000 bond, which is available for a premium of $400 per year. Other names for this policy type include “paralegal bond" and “document preparation service bond." LDAs working in California and document preparers in Nevada are required to get bonded to comply with government laws.īond amounts and premium costs vary based on your state. Legal Document Assistant BondĪ legal document assistant (LDA) bond is required if you prepare legal documents for a client. The premium for a process server bond is typically a small fraction of the bond’s coverage amount. Those states include California, Florida, and New York. There are several states that require process servers to get bonded before they can receive their license.
In your role as a process server, you’re required to obey all state rules and regulations while carrying out your tasks. It’s a legal contract that holds you accountable for any damages to a plaintiff. Process Server BondĪ process server bond is required for individuals who deliver legal documents to a defendant in a court case. These bond types are also referred to as “commercial bonds" or “business bonds." Examples of license and permit surety bonds include auto dealer bonds, mortgage broker bonds, and collection agency bonds. License and permit bonds are typically required before you can get your business license to operate. If the surety deems the claim valid, they will compensate the consumer up to the amount the principal is bonded for and will seek reimbursement from the principal for the amount they distributed to settle the claim. Individuals pay a fee (referred to as a premium), typically on an annual basis, to retain a bond from a bond company (surety).Ĭonsumers may file a claim with the surety against a principal’s bond if the individual fails to adhere to government-enforced regulations or violates the terms of the bond agreement. Obligee: The business or government agency requiring the bond.īusinesses and government agencies (obligee) require an individual (principal) to get a bond before they can receive their license to operate or perform a job.Principal: The individual holding the bond.They’re a legal contract among three parties: Surety bonds are a guarantee of service, performance, and protection. Before diving into the details of each bond type, let’s go over the basics.
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