Texas Mortgage Originator Bond

As of 6/19/2009, the state of Texas enacted HB 10. The enactment requires Texas mortgage originators to be fully licensed. In addition the originator must file a surety bond or pay towards a recovery fund. The law applies to all mortgage originators throughout Texas. Texas bank regulators are in charge setting the rules for the surety bond requirements and handling the recovery fund. HB 10 is unlike other surety bond requirements as it includes the sale of motor vehicles listed as a primary residence. In addition, it includes those involved in negotiating, making, or transacting property tax loans for a primary residence. HB 10 also includes creditors registered to originate residential mortgage loans.

Due to the current economic climate, many bonding companies that use to freely write mortgage originators have tightened their underwriting guidelines. Some sureties have stopped writing them altogether. This hardening mortgage surety bond market makes a good surety bond agent worth his or her weight in gold. After all, you cannot operate if you cannot meet the state requirements.

Fortunately, our agency is always working on unique bulk programs to ensure you get your state licensing requirements taken care of quickly so you can focus on more important things, namely, your business. Our system even offers free online bond approvals.

Comments Easier Than Ever With Twitter & Facebook

We have always done our best to educate the online world about surety bonding. Our comment system for our blog is now more intuitive, allowing for easier reading and conversing. Users posting a comment will now automatically be emailed when a reply has been posted.

In addition, logged in Twitter and Facebook users can comment in the system using their profile information from either account. We hope these changes help to enrich the experience of our blog guests.

Have suggestions on how we can better your experience? Comment on this blog post and let us know!

SBA Increases Surety Bond Program to $10 Million

The SBA has increased their maximum bond amount for a second time this year. In February, we wrote an article on the stimulus bill which spoke of an increase from $2 to $5 million.

Technically, the ceiling is still at $5 million. The changes allow up to $10 million only when “the contracting officer certifies that the guarantee is in the best interests of the government”. However, most news agencies are reporting it as a flat increase.

The SBA surety program is quite paper intensive as is. Certainly, there will be more paperwork to show the contracting officer agrees that it is in the best interests of the government.

One of the main differences in underwriting using the SBA program is how they calculate working capital. Under the SBA program a bank line of credit is considered working capital, which is not the case with normal surety underwriting. This allows contractors to qualify for bond lines that are larger than they could obtain through traditional avenues. Unfortunately, the credit crunch has caused banks to reduce or close line of credits previously available to contractors. Such changes to our financial system have had a direct impact on bond lines provided through the SBA program.

This leaves me to wonder, would there be more benefit in reviewing the current SBA procedures rather than increasing the maximum bond amount? Sure, it wouldn’t look as good in the news headlines, but it might have more of an impact with the contractors they are trying to assist.

Where Is The Stimulus Money Being Spent?

Have you wondered what locations in the country are getting the most from the stimulus package? We created a new search tool to help you find where the stimulus funds are being spent. The tool even allows you to filter out criteria by job type, size, and location. If your a contractor in need of work, this should be a great place to start!

See: Stimulus Work Search Tool

What do you think? Is anywhere getting too much money? Is anywhere getting not enough? Leave us a comment, we want to hear from you!

Bonding Company Ranking Tool Update

Recently we posted about our new surety company ranking tool. Due to the positive feedback within the surety community we have added additional functionality to the tool. Now you can see premium and ranking details for all years selected by surety. Graphs have also been added for ease of use. Here is an example using Liberty Mutual as the selected bonding company.

For the time being, the database has information on ranking and premium from 2006-2008. We are currently in the process of populating the database for years prior to 2006.