DEPARTMENT OF REGULATORY AGENCIES

DIVISION OF REAL ESTATE

MORTGAGE LOAN ORIGINATORS

4CCR 725-3

1-2-2 SURETY BOND REQUIREMENTS FOR MORTGAGE LOAN ORIGINATORS

Section 1.	Authority
Section 2. 	Scope and Purpose
Section 3.	Applicability
Section 4. 	1-2-2 Surety Bond Requirements for Mortgage Loan Originators
Section 5.	Enforcement

Section 1. 	Authority

The Director of the Division of Real Estate adopts the following permanent rule entitled, 1-2-2 Surety Bond Requirements for Mortgage Loan Originators, according to her authority as found in §§ 12-61-907 and 910.3, C.R.S.

The notice proposes to add rule 1-2-2.  The rule establishes surety bond requirements for mortgage loan originators.

Section 2.	Scope and Purpose

The purpose of this rule is to define the surety bond requirements for mortgage loan originators or any other individual required to be licensed pursuant to § 12-61-902 and § 12-61-903, C.R.S.

Section 3.	Applicability

This rule applies to mortgage loan originators as that term is defined in § 12-61-902(6), C.R.S. and includes those persons who originate a mortgage, offer to originate a mortgage, act as a mortgage loan originator, or offer to act as a mortgage loan originator.  This rule applies to all individuals required to be licensed pursuant to § 12-61-902 and § 12-61-903, C.R.S. 

Section 4.	1-2-2 Surety Bond Requirements for Mortgage Loan Originators

1.	Mortgage loan originators are deemed compliant with the surety bond requirement if their surety bond meets the requirements defined in one of the following three options:

a.	Option 1 - Mortgage loan originators, at a minimum, may acquire and maintain an individual surety bond if:

i.	The surety bond is in the amount of $25,000.00;

ii.	The surety bond is in conformance with all relevant Colorado statutory requirements;

iii.	The surety bond is exclusive to covering acts contemplated under current Colorado mortgage loan originator licensing laws;

iv.	The surety bond is not applicable to any conduct or transactions outside the jurisdiction of the Director of the Colorado Division of Real Estate; and

v.	The surety bond is identical to the individual surety bond form developed and approved by the Director.  Acceptable surety bond forms may be found on the Division of Real Estate website at http://www.dora.state.co.us/real-estate/applications/mortgagebroker/index.htm 

b.	Option 2 – Mortgage loan originators who are employees or exclusive agents for companies with less than 20 individuals who are required to be licensed pursuant to the Mortgage Loan Originator Licensing Act and who do not work for more than one company, at a minimum, may operate under the companies surety bond if the surety bond meets the following criteria:

i.	The surety bond is in the amount of $100,000.00;

ii.	The surety bond is in conformance with all relevant Colorado statutory requirements;

iii.	The surety bond is exclusive to covering acts of all of the company’s W-2 employees or exclusive agents contemplated under current Colorado mortgage loan originator licensing laws; and

iv.	The surety bond is identical to the company surety bond form developed and approved by the Director.  Acceptable surety bond forms may be found on the Division of Real Estate website at http://www.dora.state.co.us/real-estate/applications/mortgagebroker/index.htm

c.	Option 3 – Mortgage loan originators who are W-2 employees or exclusive agents for companies with 20 or more individuals who are required to be licensed pursuant to the Mortgage Loan Originator Licensing Act and who do not work for more than one company, at a minimum, may operate under the companies surety bond if the surety bond meets the following criteria:

i.	The surety bond is in the amount of $200,000.00;

ii.	The surety bond is in conformance with all relevant Colorado statutory requirements;

iii.	The surety bond is exclusive to covering acts of all of the company’s W-2 employees contemplated under current Colorado mortgage loan originator licensing laws; and

iv.	The surety bond is identical to the company surety bond form developed and approved by the Director.  Acceptable surety bond forms may be found on the Division of Real Estate website at http://www.dora.state.co.us/real-estate/applications/mortgagebroker/index.htm

2.	The Director has created the Mortgage Loan Originator Licensing Update Form to ensure surety bond information is clearly and concisely disclosed.  This form may be found on the Division of Real Estate’s website at http://www.dora.state.co.us/real-estate/mortgage/MBForms.htm.  Mortgage loan originators shall use this form to ensure all information defined in this rule is current.  

a.	Mortgage loan originators shall forward this form by mail or personal delivery to the following address:

i.	Division of Real Estate – Attn: Mortgage Loan Originator Licensing Department
1560 Broadway, Suite 925
Denver, CO. 80202

3.	Additionally, mortgage loan originators may update all of the information required in this rule electronically.  They may access their information through the following website: https://eservices.psiexams.com/index_login.jsp.  After entering their password and username, mortgage loan originators may update all information without any fees or costs associated with such action.

4.	Applicants for licensure, renewal and reinstatement shall comply with this rule and §§ 12-61-903 and 907, C.R.S. in a manner prescribed by the Director.  Any licensee who so fails to obtain and maintain a surety bond in accordance with this regulation or fails to provide proof of continuous coverage shall be subject to disciplinary action.

Section 5.	Enforcement

1.	Noncompliance with this rule, whether defined or reasonably implied in the rule, may result in the imposition of any of the sanctions allowable under Colorado law, including, but not limited to:

a.	Revocation;

b.	Refusal to renew a license;

c.	Imposition of fines; and 

d.	Restitution for any financial loss.