D.C. Mun. Regs. tit. 26, r. 26-C1109

Current through Register Vol. 71, No. 49, December 6, 2024

Rule 26-C1109 - SURETY BOND

1109. An applicant for a mortgage lender, mortgage broker or mortgage dual authority license shall file a surety bond with each original application and any renewal application.

1109.2

The surety bond shall:

(a) Run to the Commissioner for the benefit of the District and any person who has been damaged by a licensee as a result of violating any law or regulation governing the activities of mortgage loan originators, mortgage lenders, or mortgage brokers;

(b) Be issued by a surety company authorized to do business in the District;

(c) Be conditioned upon the applicant complying with all District and federal laws regulating the activities of mortgage lenders, mortgage brokers, and mortgage loan originators and performing all written agreements with borrowers or prospective borrowers, accounting for all funds received by the licensee in conformity with a standard system of accounting consistently applied;

(d) Be continuously maintained thereafter for as long as any license issued under this chapter remains in force; and

(e) Be issued in the legal and trade name of the licensee.

1109.3

A bond filed by a mortgage lender, mortgage broker, or mortgage dual authority licensee shall cover all mortgage loan originators sponsored by the licensee.

1109.4

If an applicant for a mortgage lender, mortgage broker, or mortgage dual authority license has not conducted such business in the District in any of the three (3) calendar years preceding the year in which an original application for a license is filed, the surety bond required under this subsection shall be in the amount of twelve thousand five hundred dollars ($12,500).

1109.5

If an applicant has conducted business as a mortgage lender, mortgage Broker, or mortgage dual authority licensee in the District in any of the three (3) calendar years preceding the year in which an original or renewal application is filed, the applicant shall provide a sworn statement setting forth the total dollar amount of mortgage loans applied for and accepted or mortgage loans applied for, procured, and accepted by the mortgage lender, mortgage broker, or mortgage dual authority licensee during the latest calendar year such business was conducted. The bond required in this circumstance shall be determined as follows:

(a) Where the total dollar amount of stated loans was one million dollars ($1,000,000) or less, the bond shall be in the amount of twelve thousand five hundred dollars ($12,500);

(b) Where the total dollar amount of stated loans was more than one million dollars ($1,000,000) but not more than two million dollars ($2,000,000), the bond shall be in the amount of seventeen thousand five hundred dollars ($17,500);

(c) Where the total dollar amount of stated loans was more than two million dollars ($2,000,000) but not more than three million dollars ($3,000,000), the bond shall be in the amount of twenty-five thousand dollars ($25,000); and

(d) Where the total dollar amount of stated loans was more than three million ($3,000,000), the bond shall be in the amount of fifty thousand dollars ($50,000).

1109.6

Subject to approval by the Commissioner, if an applicant files four (4) or more original or renewal applications at the same time, the applicant may provide a blanket surety bond for all licensed offices in the amount of two hundred thousand dollars ($200,000).

1109.7

When an action is commenced on a licensee's bond the Commissioner may require the filing of a new bond.

1109.8

Immediately upon recovery upon any action on the bond the licensee shall file a new bond pursuant to the requirements of this section.

1109.9

Any person who may be damaged by noncompliance of a licensee with any condition of such bond may proceed on such bond against the principal or surety thereon, or both, to recover damages. Regardless of the number of years the bond remains in effect, the number of premiums paid, the number of renewals of the license, or the number of claims made, the aggregate liability under the bond shall not exceed the penal sum of the bond.

D.C. Mun. Regs. tit. 26, r. 26-C1109

Final Rulemaking published at 56 DCR 4356, 4363-4365 (June 5, 2009); as amended by Final Rulemaking published at 56 DCR 7457, 7450 (September 11, 2009)