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What is a Mortgage Lender Bond?

A mortgage lender bond is a type of insurance that mortgage lenders purchase to protect their clients. The surety bond guarantees ethical and legal behavior and financial stability. It reimburses clients who are victims of fraud. This bond type is very similar to a mortgage broker bond, except usually the lenders’ bonds cost more.

Before mortgage lenders purchase a bond from an agency, they must submit themselves to a credit check, have their application approved, and go through other screening processes.

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