Mortgage Loan Originator ($200,000) Bond - Statewide in Arizona

Brief Summary

This $200,000 bond is posted by the company that employs Arizona loan originators, not by each originator. With it on deposit, the loan originators working under it do not have to pay into the mortgage recovery fund, and the bond answers for their conduct under Title 6.

Under A.R.S. 6-991.03(B)(8), an Arizona loan originator applicant either pays into the mortgage recovery fund or works under a bond of at least $200,000 executed by the applicant's employer or a registered exempt person. The bond is deposited with the deputy director of the Arizona Department of Insurance and Financial Institutions and protects any person aggrieved by a licensed loan originator's violation of Title 6. Loan originators working under it do not contribute to the recovery fund.

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How to Apply for a Mortgage Loan Originator ($200,000) Bond:

• Employer's legal name and its Arizona license type: consumer lender, mortgage broker or mortgage banker.
• Company financial statements and owner information for the surety's underwriting review.
• Loan Originator Surety Bond completed on the DIFI form, with one license type checked.
• Signatures of a principal officer and the surety's agent.
• Bond deposited with the deputy director of DIFI.
• Loan originators confirm they are working under the employer bond instead of paying into the mortgage recovery fund.

Detailed Information About the Arizona Mortgage Loan Originator ($200,000) Bond:

Who actually posts this bond

An individual loan originator does not buy this bond in their own name. A.R.S. 6-991.03(B)(8) has the bond executed by the applicant's employer or registered exempt person as principal, with a surety company licensed or approved to do business in Arizona. The DIFI Loan Originator Surety Bond form lists three employer license types to choose from: consumer lender, mortgage broker or mortgage banker.

Bond or recovery fund

Paragraph 8 gives each loan originator applicant two routes. The applicant pays an amount set by the deputy director into the mortgage recovery fund established under section 6-991.09, or the employer or registered exempt person deposits a bond with the deputy director. Loan originators working under that bond do not have to contribute to the recovery fund. The DIFI form puts it the same way, describing the bond as in lieu of a contribution to the recovery fund.

Why the amount is $200,000

The statute sets this bond at not less than $200,000, notwithstanding sections 6-903 and 6-943. Those sections set the ordinary company license bonds, which are $10,000 or $15,000 for a mortgage broker and top out at $100,000 for a mortgage banker. The loan originator bond is a larger figure set for this one purpose.

What it protects

The bond benefits any person aggrieved by any act, representation, transaction or conduct of a licensed loan originator that violates Title 6 or the rules adopted under it. The DIFI form conditions the bond on the principal and its loan originators complying with Title 6, Chapter 9, Article 4 of the Arizona Revised Statutes and paying damages suffered by any aggrieved person. The form runs to the State of Arizona for the use and benefit of any injured person, stays in force until the surety is released, and requires 30 days written notice to the principal and the Superintendent of Financial Institutions before the surety can cancel.

Paragraph 6 also applies

Paragraph 6 of the same subsection separately requires a bond executed by the applicant's employer or registered exempt person under section 6-903, 6-912 or 6-943 to be on deposit with the deputy director. Confirm with DIFI how your company's existing license bond and this loan originator bond should be filed, and that you have the current form, before the bond is issued.

Eligibility and Requirements for a Arizona Mortgage Loan Originator ($200,000) Bond:

• Bond amount of not less than $200,000 under A.R.S. 6-991.03(B)(8).
• Principal is the employer or a registered exempt person, not the individual loan originator.
• Surety company licensed or approved to do business in Arizona.
• Runs to the State of Arizona for the use and benefit of any injured person.
• Remains in force until the surety is released, with 30 days written notice required before cancellation.

Arizona Mortgage Loan Originator ($200,000) Bond FAQs:

Official and Additional Resources for the Arizona Mortgage Loan Originator ($200,000) Bond: