Mortgage loan originators must abide by a new law in the State of Wisconsin. The new law is named SB 62 and is an omnibus spending bill that includes numerous measures, including the State’s integration of the new federal requirements for mortgage loan originators pursuant to the federal S.A.F.E. Mortgage Licensing Act. The bill altered the present surety bond requirements for mortgage brokers and bankers. The previous law had a dual bonding requirement for mortgage brokers and bankers calculated by the existence of a bona fide office in the State. Mortgage bankers sustaining an office in the State had to acquire a surety bond in the quantity of $25,000, and a surety bond in the quantity of $300,000 was required if no office was sustained. The previous law for mortgage brokers required a surety bond in the amount of $10,000 if the broker sustained a bona fide office in the State, and $120,000 if no office was sustained. SB 62 requires a surety bond in the amount of $120,000 for all mortgage brokers and $300,000 for all mortgage bankers whether a bona fide office is sustained in the State or not.
The new legislation also sets licensing and regulatory standards for mortgage loan originators, which comprises a surety bond requirement. The bond requirement is shaped after legislation that the Conference of State Banking Supervisors created. SB 62 requires all mortgage loan originators to be covered by a surety bond in a quantity calculated by the volume of loan originations. The amount required will be established through regulations. Should the originator be an employee or agent of a individual subject to existing bond requirements, then that surety bond can be utilized to satisfy the loan originator’s bond requirement.
SB 62 also produced a new bond requirement for certified service providers. The new law requires these individuals to register and acquire a surety bond. The providers are those who contract with a seller to execute all of the seller’s sales and use tax functions connected to retail sales, including collection and remission of all the taxes. The surety bond will guarantee the payment of sales and use taxes, including any interest. The Department of Revenue will establish the quantity of the surety bond required and authorized its form. The new law allows the Secretary of Revenue to relinquish the surety bond stipulation if there was a determination that the surety bond was not needed to protect the State.