Mortgage broker bonds are imposed by the state government. This bond is issued where the lenders or brokers are operating. This bond guarantees the brokers performance with respect to the laws, rules and regulation under the mortgage broker license code. The mortgage broker before engaging in the business of mortgaging, he/she has to procure a mortgage broker license. Before procuring this license the mortgage broker has to obtain a mortgage broker surety bond. Without this license the broker cannot enable in the business. Each state has their own surety bond and they have to comply with the required surety amount in the application. This bond ensures the guaranteed performance of the obligator.

Mortgage Surety bond is a bond which is given under the mutual agreement between the three parties. The parties involved in the surety bond are the principal, the surety and the owner. This bond gives compliance with respect to the stat and federal laws. This surety bond is a specific type of bond issued for the benefit of the three parties.

In Mortgage broker bond the first party involved is the principal, the second party is the obligee and the third party is the surety. In this case, the first party i.e. the principal will guarantees the obligee i.e. to the second party. The surety is a third person to the bond and guarantees that the principal will give a faithful performance of the contract to the obligee. In default of this contract, the obligee can sue the surety and principal in the court of law. The surety has to pay the obligee the amount of contract price or he has to complete the contract.

The purpose of this Mortgage broker bonds is to protect the obligee against the default acts of the principal under the obligations. This bond is issued to the obligee by guaranteeing the faithful performance of the contractor. This bond also ensures the obligee that the obligee will perform the contract within the specified time and contract price. The principal fails in his completion as per the terms and condition of the contract or failure of payment of taxes, and then this bond will ensures the principal to perform his obligation. Many types of surety bonds are available and customer can use any type of surety bond.