Surety Bond News

New Mexico presented new legislation concerning real estate appraisal management companies. The new law is labeled SB 138 and requires real estate appraisal management companies to acquire a $25,000 surety bond or alternative security in relation to registration. The surety bond guarantees the payment of administrative or judicial punishments that the Real Estate Appraisers Board imposes and any penalties or expenses imposed under punitive action from the Board. The surety bond must indemnify any individual who suffered losses that were a result of the company’s infringement of the law or the Board’s policy. The Board will establish the surety bond quantity required through regulations.

Real estate appraisal management companies must abide by a new law in New Mexico State. The new law is labeled SB 138 and requires real estate appraisal management companies to register and acquire a $25,000 surety bond or other security. The surety bond guarantees the payment of any administrative or judicial penalties that the Real Estate Appraisers Board imposes including penalties or expenses under a disciplinary action from the Appraisers Board. The surety bond also must indemnify any individual suffering damages as a result of the company’s infringement of the legislation or the Board’s policy. The Board will establish the actual surety bond quantity required through regulations. SB 138 became active on July 1, 2010.

A new bill titled SB 342 was introduced in New Mexico concerning mortgage brokers. The new bill requires mortgage lenders and mortgage originators to be bonded and to apply the S.A.F.E. Mortgage Licensing Act. The original surety bond required of mortgage originators is $50,000. Upon renewal, the bill provides for a surety bond amount calculated by the quantity of loans originated in New Mexico on a yearly basis. The surety bond quantities would be $50,000 (under $3 million in loans), $100,000 ($3-$10 million in loans) and $150,000 (over $10 million in loans). Should the loan originator be an employee or exclusive agent of a mortgage loan business, the surety bond of the employer can be used to fulfill the surety bond requirement. The mortgage loan companies’ initial surety bond amount is $50,000 and the penal sum of the bond adjusts to mirror the sum dollar amount of loans originated yearly with the same method and quantity as the mortgage broker bond. The present law authorizes direct actions on the surety bond for individuals who have been injured and restricts the aggregate liability of the surety to all people, cumulative or otherwise, to the quantity specified in the bond. The bill was amended in the 11th hour to contain a private right of action in which persons can take legal action against mortgage loan originators for intrusion of the new law and an enforcement procedure that the Attorney General can commence against the originator for violations that have taken place or that are about to transpire.

A new law was enacted in New Mexico State relating to operators of raffle games. Titled SB 228, the new law requires operators of bingo and raffle games to be licensed. SB 228 requires an appeal bond in relation to an appeal of an administrative decision to rescind or suspend a license or permit. Any appeals to such verdicts must be made in the district court and requires a surety bond in a quantity that the court will establish. The surety bond is conditioned on the petitioner’s faithful execution of their duties as a licensee or permitee and on the punctual payment of all damages ensuing from a setback in the effect of enforcement of the administrative order and any expenses that may be evaluated in relation to the proceedings. SB 228 became active on July 1st, 2009.