Mortgage loan originators are impacted by a new law enacted in the State of Rhode Island. The new law is named HB 5704/SB 461 and requires mortgage loan originators to obtain a surety bond that is in a quantity equivalent to the dollar amount of loans originated as established by the Director of the Department of Business Regulation. Should the originator be an employee or the exclusive agent of a mortgage broker or lender, then the employer’s surety bond could be used to satisfy the bond provisions for originators. HB 5704/SB 461 requires the Director of the Department of Business Regulation to set the surety bond amount through policies. The new law also includes a net worth requirement for mortgage brokers. For individuals that are already licensed as mortgage loan originators, HB 5704/SB 461 became active on July 31st, 2009; and the new law became active on January 1st, 2010 for new mortgage loan originator licensees.
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.