OAR 441-890-0035: Corporate Surety Bond or Irrevocable Letter of Credit for Mortgage Servicers

(1) Every applicant for a license as a mortgage servicer must file a corporate surety bond or irrevocable letter of credit with the director as specified in this rule in a form and on terms approved by the director. The corporate surety bond shall be renewed or replaced each calendar year. The corporate surety bond or irrevocable letter of credit shall be delivered to the director by filing in the NMLS 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 or mortgage servicer subject to this rule reduce the amount of a corporate surety bond or irrevocable letter of credit before October 1 of each calendar year. (2) The corporate surety bond or irrevocable letter of credit must remain in effect for at least five years after the person ceases to be licensed as a mortgage servicer. A consumer must file a claim against the corporate surety bond or irrevocable letter of credit before the corporate surety bond or irrevocable letter of credit expires as described in this section. (3) At least five years after a person ceases to be licensed as a mortgage servicer, the person or the writer of the corporate surety bond or irrevocable letter of credit may apply to the director for release of the corporate surety bond or irrevocable letter of credit. Unless the director determines that claims are pending against the person for violation of 2017 Or Laws ch 636 , the director will release the corporate surety bond or irrevocable letter of credit. (4) The corporate surety bond or irrevocable letter of credit must be calculated on the total unpaid principal balance of residential mortgage loans in Oregon as of the last day of the second quarter of the year, or, for new applications, the most recent completed quarter. The sum of the corporate surety bond or irrevocable letter of credit must be determined as follows: (a) For a person with an unpaid principal balance of less than $10,000,000, the corporate surety bond or irrevocable letter of credit must be in the amount of $50,000. (b) For a person with an unpaid principal balance of $10,000,000 or more but less than $25,000,000, the corporate surety bond or irrevocable letter of credit must be in the amount of $75,000. (c) For a person with an unpaid principal balance of $25,000,000 or more but less than $50,000,000, the corporate surety bond or irrevocable letter of credit must be in the amount of $100,000. (d) For a person with an unpaid principal balance of $50,000,000 or more but less than $100,000,000, the corporate surety bond or irrevocable letter of credit must be in the amount of $150,000. (e) For a person with an unpaid principal balance of $100,000,000 or more, the corporate surety bond or irrevocable letter of credit must be in the amount of $200,000.