Surety Bond Blog » Surety News

Connecticut Mortgage Broker, Lender and Originator Bond Update

Eric Weisbrot — Tue, 07 Feb 2012 12:26:13 +0000

Connecticut mortgage brokers, lenders and originators must abide by a revised bond amount requirement. The new bill is titled SB 1110 and modifies the current licensing laws for mortgage lenders, brokers and originators. Previous legislation required a minimum $40,000 surety bond. SB 1110 requires the bond amount to mirror the licensee’s loan origination volume. The new bill requires mortgage lenders and correspondent mortgage lenders to obtain a minimum $100,000 surety bond and mortgage brokers must acquire a minimum $50,000 bond.

Virginia Auto Dealer Bond Update

Eric Weisbrot — Mon, 06 Feb 2012 12:21:59 +0000

Anyone dealing with motor vehicle dealers in Virginia is going to be affected by this new legislation. The new law is named HB 1838 and caps the amount that can be reimbursed in a claim against a motor vehicle dealer’s bond; it’s now capped at $20,000. The previous law capped the amount to be recovered at the full amount of the bond, which is $50,000.

Surety Bond Weeds Out Shady Auto Dealer

Eric Weisbrot — Thu, 02 Feb 2012 14:16:34 +0000

Surety bonds help separate legitimate businesses from disreputable ones. When a company cannot or avoids obtaining bonds needed to run a legal business, it’s usually a bad sign.

In South Attleboro, MA, police and federal agents allege they found a half-million dollars worth of heroin inside of a used car dealer’s place of business during a raid early last year. The auto dealer has disregarded city ordinances in the past and now because of the drug charges, is unable to renew its $25,000 surety bond which they need for their license.

Surety bonds help limit the amount of shady businesses because most of them are not willing to pay the license or bond fee in order to operate legally. In this case, the auto dealer did have a bond in the past, but now the city council is stepping in and won’t let them obtain a license because of the recent charges. The surety bond guarantees that the company with the bond will follow the rules and regulations that are set by the state; if a company does not honor the regulations set by the state and causes damages, a claim will go out on the bond which will be paid by the surety company who issued the bond. The surety company will then go to the individual(s) who obtained the bond for reimbursement.

According to the police, this company was not following state or federal law. The surety bond that the auto dealer had in place guaranteed that they would follow state law. In the state of Massachusetts, an auto dealer needs a surety bond to acquire a legal license, and the individuals here who seem to have a history of now following the rules will have a hard time of doing so.