DEPARTMENT OF REGULATORY AGENCIES
DIVISION OF REAL ESTATE
MORTGAGE BROKERS
4CCR 725 -3
1-2-1 MORTGAGE BROKERS BOND REQUIREMENT

Pursuant to and in compliance with Title 12, Article 61 and Title 24, Article 4, C.R.S. as amended, notice of proposed rulemaking is hereby given, including notice to the Attorney General of the State of Colorado and to all persons who have requested to be advised of the intention of the Colorado Division of Real Estate to promulgate rules.

Statement of Basis 

The statutory basis for this rule, titled 1-2-1 Mortgage Brokers Bond Requirement, is Chapter 35 of Title 11 Article 101, C.R.S., as amended.

Rule 1-2-1 Mortgage Brokers Bond Requirement

1.  When is a surety bond required

Prior to registration or licensure, an applicant shall post with the Director of the Division of Real Estate a surety bond, or an alternative authorized by Article 35 of Title 11, C.R.S., of twenty-five thousand dollars ($25,000.00).

a.	If the mortgage broker posts an alternative to a surety bond, said bond shall be in the form of a savings account or deposit in or a certificate of deposit issued by a state or national bank doing business in this state or by a savings account or deposit in or a certificate of deposit issued by a state or federal savings and loan association doing business in this state in the amount of twenty-five thousand dollars ($25,000.00) net of any penalty or withdrawal or liquidation.  The savings account, deposit or certificate of deposit shall be assigned to the Director of the Division of Real Estate for the use of the People of the State of Colorado in the form and manner approved by the Director.  The assignment shall be for a period ending six (6) years after the revocation, expiration or surrender of a registration or on such earlier date as may be determined by the Director.  

b.	If the alternative to the surety bond is an interest-bearing instrument, the mortgage broker may receive interest thereon.  The alternative to a surety bond must consist of assets that may be immediately liquidated by the Division of Real Estate upon the entering of a judgment from a court of competent jurisdiction pursuant to section 12-61-907(2), C.R.S.