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 410.14 - Corporate surety bonds for mortgage brokers

Current through Register Vol. 46, No. 28, July 10, 2024
(a) Every mortgage broker registered pursuant
				  to Banking Law, section 591-a shall file with the superintendent a corporate
				  surety bond in a principal amount of not less than $10,000 or more than
				  $100,000 based on its number of applications. The amount of the bond required
				  shall be as follows:
Number of New York
								  applications
Required amount of surety
								  bond
600+
$100,000
300 - 599
$75,000
100 - 299
$50,000
25 - 99
$25,000
0 - 24
$10,000
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 registered mortgage broker may
					 submit a sworn statement indicating the number of applications taken during the
					 first half of the calendar year if such number, 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 registrant has engaged in a pattern of conduct resulting in bona fide
					 consumer complaints of misconduct, the superintendent may require such
					 registrant to post a surety bond, or keep on deposit, twice the amount of such
					 bond or deposit as is required consistent with this subdivision.
The term
application
shall have the same
					 meaning as that term has in section
					 202.2(f) of
					 Regulation B of the Federal Reserve System (12
					 CFR*202), including the interpretations thereof
					 contained in Supplement 1 to Part 202-Official Staff Interpretations.
(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 registrant, or the expiration, surrender or revocation of such mortgage
					 broker's registration, or where the Superintendent takes possession of such
					 registrant, 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
					 registrant, unpaid penalties, or other obligations of the registrant. In the
					 event of the insolvency, liquidation or bankruptcy of the mortgage broker, or
					 the expiration, surrender or revocation of such mortgage broker's registration,
					 or where the Superintendent takes possession of such registrant, 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) Mortgage brokers that have
				  been placed on inactive status pursuant to section
				  410.17  of this Part need not obtain
				  a surety bond or deposit of assets. Should the mortgage broker seek to
				  reactivate its registration, satisfactory proof of the surety bond or deposit
				  of assets will be required before reactivation is granted.
Footnotes
* For information regarding the
United States
					 Code
(USC or U.S.C.), the
Code of Federal Regulations
(CFR) and the
Federal Register,
see Supervisory Policy G
					 1.