OAR 441-860-0085: Corporate Surety Bond for Mortgage Bankers or Mortgage Brokers Acting as or Employing a Mortgage Loan Originator

(1) This rule applies to a mortgage banker or mortgage broker licensed under ORS 86A.095 through 86A.198 and OAR chapter 441, division 860 that either acts as the applicant’s sole mortgage loan originator or employs one or more mortgage loan originators. A mortgage banker or mortgage broker must maintain a corporate surety bond during the time the person acts as a mortgage loan originator or during the time the person employs a mortgage loan originator. (2) The corporate surety bond must be in a form and on terms approved by the director and shall be renewed or replaced each calendar year. The corporate surety bond shall be delivered to the director by December 1 of each calendar year but may be made effective as of December 31 of each calendar year. In no case shall any applicant, mortgage banker or mortgage broker subject to this rule reduce the amount of a corporate surety bond before October 1 of each calendar year. (3) The corporate surety bond must remain in effect for at least five years after the person ceases to be licensed as a mortgage banker or mortgage broker. A consumer must file a claim against the corporate surety bond before the bond expires as described in this section. (4) At least five years after a person ceases to be licensed as a mortgage banker or mortgage broker, the person or the writer of the corporate surety bond may apply to the director for release of the corporate surety bond. Unless the director determines that claims are pending against the person for violation of ORS 86A.095 through 86A.198, the director will release the corporate surety bond. (5) The sum of the corporate surety bond must be calculated based on the sum of the dollar amount of direct and third party loans reported as closed and funded as reported on the Oregon residential mortgage lending activity reports submitted under OAR 441-865-0025 for quarters two, three and four of the previous year and the first quarter of the current year, or as many such quarters as have or should have been filed as of September 1 of the current year. The calculation is then used to determine the sum of the corporate surety bond as follows: (a) For a person that has not previously conducted business involving the origination of residential mortgage loans in Oregon, the corporate surety bond must be in the amount of $50,000. (b) For a person making or negotiating less than $10,000,000 in residential mortgage loans in Oregon, the corporate surety bond must be in the amount of $50,000. (c) For a person making or negotiating $10,000,000 or more but less than $25,000,000 in residential mortgage loans in Oregon, the corporate surety bond must be in the amount of $75,000. (d) For a person making or negotiating $25,000,000 or more but less than $50,000,000 in mortgage loans in Oregon, the corporate surety bond must be in the amount of $100,000. (e) For a person making or negotiating $50,000,000 or more but less than $100,000,000 in residential mortgage loans in Oregon, the corporate surety bond must be in the amount of $150,000. (f) For a person making or negotiating $100,000,000 or more in residential mortgage loans in Oregon, the corporate surety bond must be in the amount of $200,000.