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Section 50205 Of Chapter 4. Financial Condition, Transaction And Bond Requirements From California Financial Code >> Division 20. >> Chapter 4.
50205
. (a) A residential mortgage lender or servicer licensee shall
maintain a surety bond in accordance with this subdivision. The bond
shall be used for the recovery of expenses, fines, and fees levied
by the commissioner in accordance with this division or for losses or
damages incurred by borrowers or consumers as the result of a
licensee's noncompliance with the requirements of this division. The
bond shall be payable when the licensee fails to comply with a
provision of this division and shall be in the amount of fifty
thousand dollars ($50,000), and may be increased by order of the
commissioner to one hundred thousand dollars ($100,000) upon a
determination by the commissioner that the licensee is not in
compliance with any provision of this chapter or any rule or order
adopted or issued by the commissioner to implement or enforce
provisions of this chapter. The bond shall be payable to the
commissioner and issued by an insurance company authorized to do
business in this state. An original surety bond, including any and
all riders and endorsements executed subsequent to the effective date
of the bond, shall be filed with the commissioner within 10 days of
its execution.
(b) When an action is commenced on a licensee's bond, the commissioner may require the filing of a new bond. Immediately upon the recovery of an action on the bond, the licensee shall file a new bond. Failure to file a new bond within 10 days of the recovery on a bond, or within 10 days after notification by the commissioner that a new bond is required, constitutes sufficient grounds for the suspension or revocation of the license.
(c) The commissioner may by rule require a higher bond amount for a licensee employing one or more mortgage loan originators, based on the dollar amount of residential mortgage loans originated by that licensee and any mortgage loan originators employed by that licensee. Every mortgage loan originator employed by the licensee shall be covered by the surety bond.
(b) When an action is commenced on a licensee's bond, the commissioner may require the filing of a new bond. Immediately upon the recovery of an action on the bond, the licensee shall file a new bond. Failure to file a new bond within 10 days of the recovery on a bond, or within 10 days after notification by the commissioner that a new bond is required, constitutes sufficient grounds for the suspension or revocation of the license.
(c) The commissioner may by rule require a higher bond amount for a licensee employing one or more mortgage loan originators, based on the dollar amount of residential mortgage loans originated by that licensee and any mortgage loan originators employed by that licensee. Every mortgage loan originator employed by the licensee shall be covered by the surety bond.
