Oregon Escrow Agent Bond: A Comprehensive Guide

This guide provides information for insurance agents to help their customers obtain an Oregon Escrow Agent bond.

At a Glance:

• Lowest Cost: $188 per year or $19 a month
• Bond Amount: Determined on a case-by-case basis (more on this later)
• Who Needs It: All escrow agents operating in Oregon
• Purpose: To protect the public from financial harm if the escrow agent commits fraud or engages in unfair business practices
• Who Regulates Escrow Agents in Oregon: The Oregon Real Estate Agency

Background

Oregon Revised Statute 696.511 requires all escrow agents operating in the state to obtain a license from the Oregon Real Estate Agency. The Oregon Legislature enacted the licensing requirement to ensure that escrow agents do not engage in unethical business practices. To provide financial security for the enforcement of the licensing law, escrow agents must purchase and maintain a surety bond to be eligible for licensure.

What Is the Purpose of the Oregon Escrow Agent Bond?

Oregon requires all escrow agents to purchase a surety bond as part of the application process to obtain a license. The bond ensures that restitution is available to any damaged party should the escrow agent fail to abide by the regulations outlined in the Oregon Revised Statutes Chapter 696 et seq. Specifically, the bond protects claimants if the escrow agent commits fraud or engages in unfair business practices. In short, the bond is a type of insurance that protects the public if the escrow agent violates the terms of their license.

How Can an Insurance Agent Obtain an Oregon Escrow Agent Bond?

BondExchange makes obtaining a Oregon Escrow Agent bond easy. Simply log in to your account and use our keyword search to find the “escrow agent” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

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How Is the Bond Amount Determined?

Oregon Revised Statute 696.525 dictates that the limit of the Escrow Agent bond is to be determined by the average trust liability of the licensee, as outlined below:

• $50,000 bond limit if the annual receipts of client trust funds are less than $30 million
• $30 million to $60 million in client funds, the bond limit must be $125,000
• $60 million to $100 million in client funds, the bond limit must be $250,000
• $100 million to $300 million in client funds, the bond limit must be $375,000
• $300 million or more in client funds, the bond limit must be $500,000

Is a Credit Check Required for the Oregon Escrow Agent Bond?

Surety companies will run a credit check on the escrow agent to determine eligibility and pricing for the Oregon Escrow Agent bond. Escrow agents with excellent credit and work experience can expect to receive the best rates. Escrow agents with poor credit may be declined by some surety companies or have to pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the applicant’s credit.

How Much Does the Oregon Escrow Agent Bond Cost?

The Oregon Escrow Agent bond can cost between 0.5% to 5% of the bond amount per year.  Monthly subscription options are also available. Insurance companies determine the rate based on several factors including your customer’s credit score and experience. The chart below briefly references the approximate bond cost on the $50,000 requirement.

$50,000 Oregon Escrow Agent Bond Cost

*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.

How Does Oregon Define “Escrow Agent”?

To paraphrase Oregon Revised Statute 696.505, an escrow agent is any individual or business entity that holds property in a trust for a third party until certain conditions have been met. For example, when an individual is purchasing a house, an escrow agent will hold onto the title to the property and the initial down payment until both the buyer and seller meet all of their contractual obligations.

Exemptions to these definitions include:

• Banks, trust companies, building/loan or savings/loan associations, credit unions, or insurance companies
• Licensed attorneys performing their regular duties
• Licensed abstractors performing title searches for the issuance of a title insurance policy
• Licensed real estate brokers

BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.

How Do Escrow Agents Become Licensed in Oregon?

Escrow agents in Oregon must navigate several steps to obtain a license. Below are the general guidelines, but applicants should refer to the Oregon Real Estate Agency’s Escrow Licensing webpage for details on the process.

License Period – According to the Oregon Real Estate Agency, escrow agent licenses expire on June 30th of each year.

Step 1 – Purchase a Surety Bond

Oregon escrow agents must purchase and maintain a surety bond.

Step 2 – Satisfy the Following Requirements

To apply for a license, applicants must complete the requirements listed below:

• Register for an eLicense account with the Oregon Real Estate Agency
• Complete and submit an Escrow Criminal Records Check Application to the agency
• Complete the online Escrow Agent License Application and pay the $450 fee

How Do Escrow Agents in Oregon Renew Their Licenses?

Escrow agents must renew their license with the Oregon Real Estate Agency by June 30th of each year. A renewal application and fee of $450 is required.

What Are the Insurance Requirements for Escrow Agents in Oregon?

Oregon does not require escrow agents to purchase any form of liability insurance as a prerequisite to obtaining a license. Escrow agents must purchase and maintain a surety bond.

How Do Escrow Agents File Their Bonds in Oregon?

Escrow agents in Oregon should submit their completed bond forms, including the power of attorney, electronically when submitting their license applications. The surety bond requires signatures from the surety company and the escrow agent. The surety company should include the following information on the bond form:

• Legal name and address of the individual buying the bond
• Surety company’s name 
• Date the bond is signed

What Can Oregon Escrow Agents Do to Avoid a Claim Against Their Surety Bond?

The easiest way to avoid a claim as an escrow agent is to comply with all applicable license regulations. Common actions that can cause an official bond claim are listed below:

• Negligence
• Default
• Misrepresentation
• Fraud

For example, failure to maintain accurate/current accounting and finance records of all business transactions is subject to a negligence violation. If the violation remains unresolved by the licensee, a bond claim may be filed.

What Other Insurance Products Can Agents Offer Escrow Agents in Oregon?

Most reputable escrow agents will purchase business liability insurance. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Escrow Agent Customers in Oregon?

Oregon conveniently provides a public database to search for active escrow agents in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.