Alaska Administrative Code › Title 3 - Commerce, Community, and Economic Development › Part 1 - Banking, Securities, Small Loans and Corporations › Chapter 14 - Mortgage Lending › Article 1 - Licensing › 3 AAC 14.053 - Surety bond required of mortgage licensee and registered depository institution

Current through May 31, 2024
(a) An applicant for a mortgage license or
				  for a registration under AS 06.60.014 shall file with the department a bond
				  with one or more sureties. The amount of the bond must be at least $75,000. The
				  bond must be executed by the applicant and by a surety company authorized to
				  conduct a surety business in the state. The bond must secure the performance by
				  the mortgage licensee or the registered depository institution of its
				  obligations under AS 06.60 and this chapter and must be in a form acceptable to
				  the department.
(b) The bond must
				  run to the benefit of the department, the Department of Law, or another person
				  with a claim for relief because of a violation of AS 06.60 or this chapter by a
				  mortgage licensee or n registered depository institution.
(c) The bond must provide that, no later than
				  90 days after receipt of a final order issued by a court or the department that
				  finds the mortgage licensee or the registered depository institution has
				  violated AS 06.60 or this chapter and orders the mortgage licensee or the
				  registered depository institution to pay a sum of money as a result of the
				  violation, the surety shall pay the amount required in the final order to be
				  paid to the department, the Department of Law, or another person up to the full
				  amount of the bond. The bond must provide that if, at the time the surety makes
				  payment under the bond, the surety has received a final order under this
				  subsection from more than one claimant and the total amount of the claims
				  exceeds the bond amount, the surety shall make a pro rata payment to all
				  claimants who have submitted a final order to the surety under this
				  subsection.
(d) No later than 14
				  days after the mortgage licensee or the registered depository institution
				  receives notice of an action against the mortgage licensee or the registered
				  depository institution that could result in recovery against the bond, a
				  mortgage licensee or a registered depository institution shall provide written
				  notice or electronic mail notice to the department of the action.
(e) The bond must provide that, no later than
				  14 days after the surety receives notice of an action against the bond or a
				  final order of a court under (c) of this section, the surety shall provide
				  written notice or electronic mail notice to the department of the
				  action.
(f) The bond must provide
				  that immediately upon a payment by the surety under the bond, the surety shall
				  provide written notice or electronic mail notice to the department of the
				  action.
(g) A mortgage licensee or
				  a registered depository institution shall ensure that the full amount of the
				  required bond is in effect continuously while the mortgage licensee is licensed
				  or the registered depository institution is registered and for a three-year
				  period after the department revokes or otherwise terminates the license or
				  registration. Failure to maintain the surety bond at the level required in this
				  section is grounds for immediate suspension of the mortgage license or of the
				  registration under AS 06.60.014. If the department receives notice of a final
				  order of a court under (c) of this section or submits a final order of the
				  department to the surety under (c) of this section, the department may require
				  the filing of a new bond. If a new bond is required, the mortgage licensee or
				  the registered depository institution shall file a new bond in the required
				  amount no later than 30 days after receiving notice from the department.
				  Immediately upon payment by the surety under the bond the mortgage licensee or
				  the registered depository institution shall file a new bond with the
				  department.
(h) The bond must
				  provide that the surety shall provide written notice or electronic mail notice
				  to the department at least 30 days before canceling the surety bond for any
				  reason. Upon receipt by the department of a notice of cancellation, the
				  department will notify the mortgage licensee who or the registered depository
				  institution that is the principal on the bond of the effective date of the
				  cancellation of the bond and that the mortgage license, or the registration
				  under AS 06.60.014, will be suspended when the bond is cancelled, unless the
				  mortgage licensee or the registered depository institution furnishes the
				  department with an equivalent bond before the effective date of the
				  cancellation. The department will send the notice to the mortgage licensee or
				  the registered depository institution through the registry. The department will
				  suspend the mortgage license, or the registration under AS 06.60.014, on the
				  effective date of the cancellation, unless the surety bond has been replaced,
				  renewed, or otherwise reinstated.
(i) The remedies provided under this section
				  are cumulative and nonexclusive and do not affect any other remedy available at
				  law.
Authority:
AS
						06.60.045
AS
						06.60.910