Maryland State enacted a new law concerning mortgage loan originators. The new law is named SB 269 and requires mortgage loan originators to be covered by a surety bond in a quantity that is calculated by the dollar amount of the loans originated. Should the loan originator be a member of staff or an exclusive agent of a mortgage lender subject to Maryland’s existing surety bond requirements, coverage under the employer’s bond would satisfy the law’s stipulations. SB 269 requires the surety bond to provide coverage for all originators. The present law requires mortgage lenders to attain a surety bond in an amount calculated by the loan volume, which varies from $50,000 to $150,000. Lenders must attain a surety bond for each individual license and can acquire a blanket surety bond to cover all licenses, which is capped at $750,000.
SB 269 also produces a separate licensing requirement for associated insurance producer-mortgage loan originators where they are obliged to acquire the license bond required of mortgage lenders if licensed as one, or be covered by a surety bond of a mortgage lender. The surety bond in this instance will protect all affiliated insurance producer-mortgage loan originators and be a quantity of $1 million or “another amount” determined by regulations.