(1)
What are the surety bond
requirements for licensed mortgage brokers?
(a) Mortgage brokers must at all times have a
valid surety bond on file with the director. The surety bond must be provided
on a form prescribed by the department.
(b) The surety bond amount must be based upon
the annual loan origination volume of the licensee in the state of
Washington.
(c) When the mortgage
broker initially applies for a license, the dollar amount of the surety bond
must be a minimum of twenty thousand dollars. Thereafter, by March 31st of each
year, you must determine your required bond amount based on loan origination
volume and provide DFI with proof of having an adequate bond.
(d) The surety bond must list the mortgage
broker's corporate name and NMLS unique identifier.
(e) The following chart shows the surety bond
amount required for the annual loan origination volume of the licensee in the
state of Washington:
| Loan Volume in Millions |
Bond Amount |
| $40+ |
$60,000 |
| $20 to $40 |
$40,000 |
| $0 to $20 |
$20,000 |
(f)
If you only offer residential mortgage loan modification services, your bond
amount is twenty thousand dollars, initially and thereafter.
(2)
Who provides mortgage
broker surety bonds? To purchase a surety bond, contact your insurance
broker. A list of insurance companies that underwrite Washington surety bonds
in Washington is available from the Washington state office of the insurance
commissioner's website.
(3)
What happens to my mortgage broker license if my surety bond is
canceled? Failure to maintain a surety bond is a violation of the act
and may result in an enforcement action against you.
(4)
May I change surety bond
companies? Yes. You may change your insurance provider at any time. Your
current insurance company will issue a cancellation notice for your existing
surety bond. The cancellation notice may be effective no less than thirty days
following the director's receipt of the cancellation notice.
Prior to the cancellation date of the existing surety bond,
you must have on file with the department a replacement surety bond. The
replacement surety bond must be in effect on or before the cancellation date of
the prior surety bond.
(5)
Why must I carry a surety bond to have a mortgage broker license?
The surety bond protects the state and any persons who suffer loss by reason of
violations of any provision of the act or these rules by you or your employees
or independent contractors.
(6)
Who may make a claim against a licensed mortgage broker's surety
bond? The director, or any person, including a third-party provider, who
has been injured by a violation of the act, may make a claim against a bond.
(7)
How does a person make a
claim against a licensed mortgage broker's surety bond? The department
can provide the name of a licensed mortgage broker's surety bond provider.
Contact the surety bond company and follow its required procedures to make your
claim.
(8)
How long does the
bond claim procedure take? The time to complete a bond claim may vary
among bonding companies. If the claimant is not a borrower, final judgment will
not be entered prior to one hundred eighty days after the claim is
filed.
