New York Codes, Rules and Regulations › Title 3 - BANKING › Chapter III - SUPERINTENDENT'S REGULATIONS › Subchapter B - NON-BANKING ORGANIZATIONS › Part 410 - Mortgage Bankers: Licensing Requirements; Mortgage Brokers: Registration Requirements; Branch Applications: Notifications: Books And Records; Annual Reports; Surety Bonds; And Consultants Of Licensed Mortgage Bankers And Registered Mortgage Brokers › Section 410.8 - Corporate surety bonds for mortgage bankers

Current through Register Vol. 46, No. 28, July 10, 2024
(a) Every mortgage banker licensed pursuant
				  to Banking Law, section 591 shall file with the superintendent a corporate
				  surety bond in a principal amount of not less than $50,000 or more than
				  $500,000 based on its volume of business. The amount of the bond required shall
				  be as follows:
Aggregate $ amount of NY loans
								closed
Required amount of surety bond
$300,000,000+
$500,000
$200,000,000 - $299,999,999
$350,000
$100,000,000 - $199,999,999
$250,000
$30,000,000 - $99,999,999
$150,000
$10,000,000 - $29,999,999
$100,000
$0 - $9,999,999
$50,000
The amount of the surety bond shall be determined from
					 information submitted in the annual Volume of Operations Report (VOOR). The
					 2004 bond will be based upon the 2002 VOOR figures reported to the department.
					 Thereafter, adjustments to the amount of the bond shall be made within 30 days
					 after filing the applicable VOOR. Moreover, a licensed mortgage banker may
					 submit a sworn statement indicating the aggregate dollar amount of NY loans
					 closed during the first half of the calendar year if such amount, on an
					 annualized basis, would change the required amount of the surety bond. Such
					 corporate surety bond shall be issued by a bonding company or insurance company
					 authorized to do business in this State. If the superintendent determines, in
					 his or her sole discretion, that a licensee has engaged in a pattern of conduct
					 resulting in bona fide consumer complaints of misconduct, the superintendent
					 may require such licensee to post a surety bond, or keep on deposit, twice the
					 amount of such bond or deposit as is required consistent with this
					 subdivision.
(b) Such bond
				  shall be in favor of the superintendent for the protection of the
				  superintendent and residential mortgage consumers located in New York State and
				  it shall contain substantially the following language:
"In the event of the insolvency, liquidation or bankruptcy
					 of such licensee, or the expiration, surrender or revocation of such mortgage
					 banker's license, or where the Superintendent takes possession of such
					 licensee, the proceeds of this bond shall constitute a trust fund to be used
					 exclusively by the Superintendent to reimburse consumer fees or other charges
					 determined by the Superintendent to be improperly charged or collected and to
					 pay past due Department examination costs and assessments charged to the
					 licensee, unpaid penalties, or other obligations of the licensee. In the event
					 of the insolvency, liquidation or bankruptcy of the mortgage banker, or the
					 expiration, surrender or revocation of such mortgage banker's license, or where
					 the Superintendent takes possession of such licensee, the proceeds of the bond
					 shall be paid to the Superintendent forthwith for disposition in accordance
					 with the applicable provisions of the Banking Law."
(c) In lieu of a corporate surety bond, the
				  mortgage banker may elect to deposit assets pursuant to section
				  410.10  of this Part.