(1)
What are the surety bond requirements for licensed mortgage brokers? (a) Mortgage brokers must at all times have a valid surety bond on file with the director. The surety bond must be provided on a form prescribed by the department.
(b) The surety bond amount must be between twenty thousand dollars and sixty thousand dollars depending on the annual average number of loan originators representing the mortgage broker.
(c) When the mortgage broker initially applies for a license, the dollar amount of the surety bond must be sufficient to cover the number of licensed loan originators you intend to employ in your first year of business.
(d) The surety bond must list the full name and any trade or doing-business-as names used by the mortgage broker. The surety bond must list the licensee's main physical address including street number, street name and direction, suite number, city, county, and state.
(e) The surety bond must be signed by a principal of the mortgage broker as well as an authorized representative of the insurance company listed as surety. The power-of-attorney must identify the signing representative as authorized by the insurance company. The insurance company must include their surety bond number and seal on the surety bond form.
The following chart shows the surety bond amount required for the annual average number of loan originators:
| Average Number of Loan Originators | Minimum Required Bond Amount |
| up to 3.0 | $20,000 |
| more than 3.0, up to 6.0 | $30,000 |
| more than 6.0, up to 9.0 | $40,000 |
| more than 9.0, up to 15.0 | $50,000 |
| more than 15.0 | $60,000 |
(2)
May I provide security in a form other than a surety bond? No. Beginning January 1, 2007, the director will not accept an alternative to a surety bond.
(3)
Who provides mortgage broker surety bonds? To purchase a surety bond, contact your insurance broker. A list of insurance companies that underwrite Washington surety bonds in Washington is available from the Washington state office of the insurance commissioner's web site.
(4)
What do I do with the surety bond once I receive it from my insurance company? You must sign the original surety bond. Then include the surety bond and the attached power-of-attorney with your license application package.
(5)
What happens to my mortgage broker license if my surety bond is canceled? Failure to maintain a surety bond is a violation of the act and may result in an enforcement action against you.
(6)
May I change surety bond companies? Yes. You may change your insurance provider at any time. Your current insurance company will issue a cancellation notice for your existing surety bond. The cancellation notice may be effective no less than thirty days following the director's receipt of the cancellation notice.
Prior to the cancellation date of the existing surety bond, you must have on file with the department a replacement surety bond. The replacement surety bond must be in effect on or before the cancellation date of the prior surety bond.
(7)
Why must I carry a surety bond to have a mortgage broker license? The surety bond protects the state and any persons who suffer loss by reason of violations of any provision of the act or these rules by the licensee, its employees, or independent contractors.
(8)
Who may make a claim against a licensed mortgage broker's surety bond? The director, or any person, including a third-party provider, who has been injured by a violation of the act, may make a claim against a bond.
(9)
How may I make a claim against a licensed mortgage broker's surety bond? The department can provide you with the name of a licensed mortgage broker's surety bond provider. Contact the surety bond company and follow its required procedures to make your claim.
(10)
How may I make a claim against a certificate of deposit, an irrevocable letter of credit, or other instrument that the director has permitted to be filed instead of a surety bond? File your claim against a certificate of deposit, an irrevocable letter of credit, or other instrument directly with the department, in a form prescribed by the department. After January 1, 2007, the department will only accept surety bonds; any claims arising over violations occurring after January 1, 2007, will be against a bond.
(11)
How long does the bond claim procedure take? The time to complete a bond claim may vary among bonding companies. If the claimant is not a borrower, final judgment will not be entered prior to one hundred eighty days after the claim is filed.
(12)
When must I file a bond claim? A bond claim must be filed within one year of the date of the act that causes the claim.
[Statutory Authority: RCW 43.320.040, 19.146.223, 2006 c 19. 06-23-137, § 208-660-175, filed 11/21/06, effective 1/1/07.]