5 Del. Admin. Code § 2401-12.0
Current through Register Vol. 28, No. 5, November 1, 2024
Section 2401-12.0 - Surety Bonds12.1 All licensed mortgage loan originators and applicants for an initial license under the statute and this regulation shall file with the Commissioner an original corporate surety bond in a form satisfactory to the Commissioner in accordance the requirements of this section.12.2 The surety bond for an applicant for an initial license shall be a minimum of $25,000. The surety bond for a licensed mortgage loan originator shall be in a minimum amount in accordance with the following table based upon the volume of Delaware mortgage loans which that licensee originated for the year ending December 31 that precedes the effective year of the license. The amount of a surety bond that is effective for more than one year shall be adjusted as of December 31 of each year to ensure that the minimum required amount is maintained. | Annual Volume of Delaware Mortgage Loans | Minimum Required Amount of Surety Bond |
| not more than $11,000,000 | $25,000 |
| $11,000,001 - $23,000,000 | $50,000 |
| $23,000,001 - $35,000,000 | $75,000 |
| $35,000,001 - $47,000,000 | $100,000 |
| $47,000,001 - $59,000,000 | $125,000 |
| $59,000,001 - $71,000,000 | $150,000 |
| $71,000,001 - $83,000,000 | $175,000 |
| $83,000,001 and over | $200,000 |
12.3 The Commissioner may require a larger surety bond based upon the particular circumstances of the applicant or licensee.12.4 No bond shall be accepted unless the following requirements are satisfied:12.4.1 The aggregate value of the bond shall be equal to, or greater than, the amount determined in accordance with § 12.2;12.4.2 The term of the bond shall be commensurate with the license period or continuous;12.4.3 The expiration date of the bond shall not be earlier than midnight of the date on which the license expires; and12.4.4 The bond shall run to the State for the benefit of the Office of the State Bank Commissioner and for the benefit of all consumers injured by any wrongful act, omission, default, fraud or misrepresentation by the mortgage loan originator in the course of that individual's activity as such. Compensation under the bond shall be for amounts which represent actual losses and shall not be payable for claims made by business creditors, third-party service providers, agents or persons otherwise in the employ of the mortgage loan originator. Surety claims shall be paid to the Office of the State Bank Commissioner by the insurer not later than 90 days after receipt of a claim. Claims paid after 90 days shall be subject to daily interest at the legal rate. The aggregate liability of the surety on the bond, exclusive of any interest which accrues for payments made after 90 days, shall in no event exceed the amount of such bond.12.5 If a mortgage loan originator changes surety company or the bond is otherwise amended, the mortgage loan originator shall immediately provide the Commissioner with the amended original copy of the surety bond. No cancellation of an existing bond by a surety shall be effective unless written notice of its intention to cancel is filed with the Commissioner at least 30 days before the date upon which cancellation shall take effect.12.6 The Commissioner may require potential claimants to provide such documentation and affirmations as the Commissioner may determine to be necessary and appropriate. In the event the Commissioner determines that multiple consumers have been injured by a mortgage loan originator, the Commissioner shall cause a notice to be published for the purpose of identifying all relevant claims.12.7 When a surety company receives a claim against the bond of a mortgage loan originator, it shall immediately notify the Commissioner and shall not pay any claim unless and until it receives notice to do so from the Commissioner.12.8 The Commissioner shall have a period of 2 calendar years after the effective date of cancellation or termination of the surety bond by the insurer to submit claims to the insurer.12.9 A new bond shall be filed when an action is commenced on an existing bond.12.10 Mortgage loan originators who are employees or exclusive agents of a licensee under Chapters 21 or 22 of Title 5 of the Delaware Code can use the surety bond of their employer or principal in lieu of their surety bond requirement under this section, if the surety bond of the employer or principal is in a minimum amount as provided in § 12.2 based on the total annual volume of Delaware mortgage loans originated by all mortgage loan originators covered by that surety bond, that surety bond meets all the requirements of this section, and the employer or principal consents to that use. Licensees under those Chapters shall notify the Commissioner in writing of the names of the mortgage loan originators who are covered by their bond, and of any changes in that coverage.5 Del. Admin. Code § 2401-12.0