SB 2279 is a new law that was introduced in Tennessee State regarding mortgage brokers. The new law terminates the use of a letter of credit (LOC) in the place of a license bond and requires mortgage brokers and lenders to acquire a surety bond for the renewal of their registration in the year 2010. The previous law obliged mortgage brokers to attain a $90,000 surety bond while mortgage lenders need a $200,000 surety bond. SB 2279 requires a surety bond calculated by the total dollar amount of loans originated and would have to supply coverage for all mortgage loan originators. The banking commissioner will establish the surety bond amount in the policy. Both mortgage brokers and lenders would be authorized to sustain their surety bonds in the present quantity until the renewal of their registration in 2010.
The new law also produces an instantaneous requirement for mortgage loan servicers to attain a surety bond in the amount of $200,000. Industrial lenders and thrifts not making or brokering mortgage loans must acquire a $50,000 surety bond, with an alternative of attaining a letter of credit under the new law.