Mortgage loan originators are affected by a new law that was enacted in Minnesota State. The new law is named SB 2510 and requires mortgage loan originators to be licensed and covered by a surety bond. It is acceptable to either acquire a bond or be covered through their employer’s bond if they are the member of staff or exclusive agent of an individual subject to the surety bonding requirements. The surety bond must supply coverage for all mortgage loan originators and must be in a quantity that mirrors the dollar amount of loans originated. The Commissioner of Commerce will establish the surety bond quantity.

SB 2510 alters the present license requirements for residential mortgage loan originators as well. The previous law required mortgage loan originators to be licensed and acquire a minimum surety bond of $50,000 or an irrevocable letter of credit. The originators also could have sustained a minimum net worth of $250,000 or be accepted as a mortgagee by the U.S. Department of Housing and Urban Development or the Federal National Mortgage Association. The alternative of attaining a letter of credit or meeting net worth requirements are terminated under the new legislation. The new law requires residential mortgage loan originators to acquire a $100,000 surety bond that covers all mortgage loan originators that are staff or independent agents of the licensee. Upon renewal, the surety bond must be in a quantity that emulates the licensee’s sum dollar amount of the closed residential mortgage loans originated in Minnesota. The surety bond quantities must be according to the following schedule:

Dollar Amount of Loans Bond Amount
$0 to $5 million $100,000
$5,000,000.01 to $10 million $125,000
$10,000,000.01 to $25 million $150,000
Over $25 million $200,000