The state of New York presented a new law regarding mortgage loan originators. The new law is named AB 6924 and requires mortgage loan originators to be covered by a surety bond. Should the originator be a member of staff or exclusive agent of an originating entity subject to present surety bond requirements, then the employer’s surety bond is acceptable to satisfy the requirement; as long as that the surety bond guarantees all mortgage originators not covered under a qualifying bond. Under present legislation, mortgage brokers must acquire a surety bond in a quantity spanning from $10,000 to $100,000 calculated by loan application volume. All mortgage lenders must attain a surety bond in a quantity ranging from $50,000 to $500,000, which is calculated by the volume of New York closed loans. Under AB 6924, the Superintendent of Banks is allowed to promulgate regulations pertaining to the requirements for the originator’s surety bond. AB 6924 also states that the surety bond amount would have to mirror the dollar amount of loans originated by the mortgage loan originator.
Eric is the Chief Marketing Officer of JW Surety Bonds. With years of experience in the surety industry, he is also a contributing author to the surety bond blog.