On February 24, 2015, the North Carolina General Assembly introduced House Bill 105, which, if instated, would allow mortgage lenders and brokers in the state of North Carolina to post a surety bond in a lesser amount than the current bond amount requirement.
As the law states right now, mortgage brokers are required to post a surety bond in the amount of $75,000. If they have originated mortgage loans in an amount higher than $10,000,000 but less than $50,000,000 in a 12-month period, then the bond that he or she posts must be in an amount no less than $125,000. Additionally, if the loans that brokers have originated in the 12-month period exceed $50,000,000, the bond should then be posted in a minimal amount of $250,000.
Mortgage lenders and servicers bond amounts differ from those required to be posted by brokers. Currently, 53-244.103 of the North Carolina Secure and Fair Enforcement (S.A.F.E.) Mortgage Licensing Act states that mortgage lenders and servicers must post a bond in the amount of $150,000. If, in a 12-month period, the lender or servicer originates loans higher than $10,000,000 but less than $50,000,000, the bond amount must then be $250,000. If the loans that he or she has originated exceed $50,000,000 in the same 12-month period, the required bond amount must be no less than $500,000.
The appointment of this bill would lessen each bond amount required to be posted for both lenders and brokers. Mortgage brokers would be allowed to post a bond of $25,000 rather than $75,000. Revisions would also include changing the range of loans originated from $10,000,000-$50,000,000 for a $125,000 bond to $25,000,000-$100,000,000 for a lowered bond amount of $75,000. If the loans that the broker has originated exceed $100,000,000, the bond must then be posted in an amount no lesser than $150,000.
Lenders and servicers would be required to post a $100,000 bond instead of a $150,000 bond. If the loans he or she originates in a 12-month period exceed $100,000,000, the bond amount would then become $150,000 instead of $250,000 or $500,000, as currently required.
The purpose of this amendment is to make the posting of a mortgage broker or lender surety bond easier to maintain. Principals required to post these bonds have found difficulties obtaining them in such high amounts since their enactment a few years prior. By lessening the bond amounts, the Commissioner hopes to see fewer losses for this particular bond in the state of North Carolina as well as less difficulties when initially obtaining the bond.
Because this bill has only been proposed, it will not become effective until it is made into law.
The experts at SuretyBonds.com are very knowledgeable on mortgage lender and broker bonds and are more than happy to answer any additional questions you may have. To speak to one of our specialists directly, call us at 1 (800) 308-4358 or go online to submit a bond quote request form now.