Iowa Mortgage Originator Bond

IowaIowa state introduced a new law relating to mortgage originators. The new law is labeled SB 355 and requires mortgage originators to be covered by a surety bond, but if the surety bond requirement is not possible, SB 355 authorizes the Superintendent of Banking to institute a recovery fund. The new law states that the surety bond covering mortgage loan originators must mirror the dollar amount of loans originated according to the Superintendent’s resolution. If the originator is a member of staff or the exclusive agent of a mortgage broker, mortgage banker, industrial lender or a consumer lender, which are subject to surety bond requirements under present law, then the employer’s surety bond will be sufficient for the bond requirements put on originators. SB 355 requires the Superintendent of Banking to set the bond requirements using regulations so that the surety bond quantity will replicate the dollar amount of loans originated for an employer’s surety bond.