State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_53 > GS_53-244_103

§ 53‑244.103.  Suretybond requirements.

(a)        Each mortgage loanoriginator shall be covered by a surety bond through employment with a licenseein accordance with this section. The surety bond shall provide coverage foreach mortgage loan originator employed by the licensee in an amount asprescribed by subsection (b) of this section and shall be in a form prescribedby the Commissioner. The Commissioner may adopt rules with respect to therequirements for the surety bonds as needed to accomplish the purposes of theArticle.

(b)        Licensees shall berequired to post a surety bond with the Commissioner at application to besubsequently adjusted as follows:

(1)        A mortgage brokershall post a minimum surety bond of seventy‑five thousand dollars($75,000). Provided, however, if a mortgage broker has originated mortgageloans in North Carolina in a 12‑month period ending December 31 in excessof ten million dollars ($10,000,000) but less than fifty million dollars($50,000,000), then the mortgage broker's minimum bond amount shall be onehundred twenty‑five thousand dollars ($125,000), and if a mortgage brokerhas originated mortgage loans in North Carolina in a 12‑month periodending December 31 of fifty million dollars ($50,000,000) or more, the mortgagebroker's minimum bond shall be two hundred fifty thousand dollars ($250,000).

(2)        A mortgage lender ormortgage servicer shall post a minimum surety bond of one hundred fiftythousand dollars ($150,000). Provided, however, if a mortgage lender hasoriginated mortgage loans in North Carolina in a 12‑month period endingDecember 31 in excess of ten million dollars ($10,000,000) but less than fiftymillion dollars ($50,000,000), then the mortgage lender's minimum bond amountshall be two hundred fifty thousand dollars ($250,000), and if a mortgagelender has originated mortgage loans in North Carolina in a 12‑monthperiod ending December 31 of fifty million dollars ($50,000,000) or more, thenthe mortgage lender's minimum bond shall be five hundred thousand dollars ($500,000).

(3)        Any increased suretybond required under subdivision (1) or (2) of this subsection shall be filedwith the Commissioner on or before May 31 immediately following the end of the12‑month December 31 period.

(c)        The surety bondshall be in a form satisfactory to the Commissioner and shall run to the Statefor the benefit of any claimants against the licensee to secure the faithfulperformance of the obligations of the licensee under this Article. Theaggregate liability of the surety shall not exceed the principal sum of thebond. A party having a claim against the licensee may bring suit directly onthe surety bond, or the Commissioner may bring suit on behalf of any claimants,either in one action or in successive actions. Consumer claims shall be givenpriority in recovering from the bond. When an action is commenced on alicensee's bond, the Commissioner may require the filing of a new bond. In thiscase, the licensee shall file a replacement bond in the required amount within30 days. Immediately upon recovery upon any action on the bond the licenseeshall file a new bond.

(d)        In theCommissioner's discretion and upon written request of the licensee, theCommissioner may waive the requirement of the bond for any licensee, if:

(1)        The licensee hasbeen licensed by the Commissioner for at least three years;

(2)        The licensee candemonstrate a net worth, according to the most recent audited financialstatement, at least four times the required bond amount, and the licenseecertifies that its net worth will be maintained at or above this level at alltimes and agrees to notify the Commissioner and to secure an appropriate bondin the event the net worth falls below this level;

(3)        The Commissionerbelieves the licensee has a satisfactory history of resolving complaints fromconsumers and responding to findings of investigations or examinations by theCommissioner; and

(4)        The Commissioner hasno reason to believe the licensee will be unable to resolve complaints, respondto examination or investigative findings, or fulfill financial obligationsunder this Article.

(e)        If the Commissionerhas waived the bond requirement of a licensee based on subsection (d) of thissection, the Commissioner may summarily reinstate the bond requirement on anylicensee if the Commissioner has reason to believe the licensee no longer meetsthe standards in subsection (d) of this section. In this event, the licenseeshall submit a bond, as required in subsection (b) of this section, within 30days. Failure to submit a bond as directed by the Commissioner shall be groundsfor summary suspension.  (2009‑374, s. 2.)