Surety Bond Insurance: What Is It and Why Is It Important?
The surety bond is a legal agreement that obligates the insured party to reimburse to another party any legal fees or losses incurred due to the underwriting process of a mortgage, the processing of a title insurance policy, or other similar transactions. While it is not absolutely necessary that all transactions must be performed under the surety bond, the fact remains that most transactions will be. As such, it is very important to understand the why's and the how's of the surety bond process in order to be fully informed about the necessary underwriting processes and procedures.
First, why is the need for a surety bond. Surety bonds are designed to protect lenders from unexpected acts of nature (i.e., fraud). While this is true, the fact remains that a surety bond is also designed to...