Kentucky State has implemented a new law concerning mortgage brokers and lenders. The new law which is titled HB 106 modifies the surety bond requirements for mortgage brokers and lenders, and subjects mortgage loan originators to registration and bonding in order to employ the S.A.F.E. Mortgage Licensing Act. The present law requires lenders to acquire a surety bond that is at least $250,000 while requiring brokers to acquire a surety bond of at least $50,000. Additionally, HB 106 requires mortgage lenders, brokers and originators to attain or to be covered by a surety bond. The bond quantities from the existing law were not altered. The new law provides for termination of the surety bond with 30 days notification, which the previous law did not identify, and also cancels the utilization of alternative types of security in place of surety bonds. HB 106 also requires the surety bond to be obtainable for the recovery of restitution. Present legislation already states that the surety bond has to be accessible for expenses, penalties and fees.
Eric is the Webmaster of JW Surety Bonds. With years of experience in the surety industry, he is also a contributing author to the surety bond blog.