Mortgage Loan Originator (20 or More Licenses) ($200,000) Bond - Statewide in Colorado

Brief Summary

One $200,000 company bond can stand in for the $25,000 individual bonds of every Colorado originator on your team, as long as each of them works only for you. For a shop with 20 or more licensed originators that is one filing and one renewal instead of a stack of individual bonds.

Colorado lets mortgage loan originators who are employees or exclusive agents of a company with 20 or more individuals required to be licensed operate under a single $200,000 company surety bond, written on the Board's company bond form with the State of Colorado Division of Real Estate as obligee. The authority is C.R.S. 12-10-717 and Rule 2.6 of 4 CCR 725-3. An originator who works for more than one company cannot use the company bond and needs an individual $25,000 bond.

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How to Apply for a Mortgage Loan Originator (20 or More Licenses) ($200,000) Bond:

• Count the individuals at your company who are required to hold a Colorado mortgage loan originator license.
• Confirm each originator to be covered works only for your company.
• Use the Board's company surety bond form for companies with 20 or more licensees, unchanged.
• Complete the bond application and company credit review.
• Keep employment start and end dates for every covered originator ready for the Board.
• Keep proof of continuous coverage current with the Division of Real Estate before each December 31 renewal.

Detailed Information About the Colorado Mortgage Loan Originator (20 or More Licenses) ($200,000) Bond:

Which tier you are in

Rule 2.6 of the Board of Mortgage Loan Originators rules (4 CCR 725-3) gives three ways to meet the bond requirement in C.R.S. 12-10-717.

1. An individual bond of $25,000 on the Board's individual form. 2. A company bond of $100,000 covering all employees or exclusive agents of a company with fewer than 20 individuals required to be licensed. 3. A company bond of $200,000 covering all employees or exclusive agents of a company with 20 or more individuals required to be licensed.

The count is people at the company who must be licensed, not the number of licenses or states. Once that headcount reaches 20, a company bond must be at the $200,000 level.

The one company limit

Options 2 and 3 apply only to originators who do not work for more than one company. Anyone splitting time between two companies has to carry their own $25,000 individual bond. This is the detail most often missed when a team adds part time or shared originators.

What the company has to prove

Rule 2.6(B) requires the mortgage company to hand the Board any bond it requests and to verify and provide proof of the employment timeline for each originator operating under the company bond. If the company cannot produce that, the individual originators are treated as out of compliance with the bond requirement. Rule 2.6(C) requires proof of continuous coverage, and Rule 2.6(D) makes failure to keep a bond grounds for discipline.

How claims work

The surety does not pay a claimant until a court has made a final determination of fraud, forgery, criminal impersonation or fraudulent representation, under 12-10-717(2). The surety must notify the Board within 30 days of any payment or cancellation. The Division's company form names the State of Colorado Division of Real Estate as obligee, requires an insurer authorized in Colorado, caps aggregate liability at the $200,000 penal sum, and allows cancellation on 30 days written notice.

Separate from errors and omissions

The bond does not satisfy Colorado's errors and omissions insurance requirement under Rule 2.7. Originator licenses expire at midnight on December 31 if not properly renewed, and bond coverage has to be current at every renewal.

Eligibility and Requirements for a Colorado Mortgage Loan Originator (20 or More Licenses) ($200,000) Bond:

• Bond amount of $200,000 under Rule 2.6(A)(3) of 4 CCR 725-3.
• State of Colorado Division of Real Estate named as obligee on the Board approved company form.
• Insurance company authorized to conduct business in Colorado.
• Coverage limited to acts of the company's employees or exclusive agents under the Mortgage Loan Originator Licensing Act.
• Separate errors and omissions coverage meeting Rule 2.7.

Colorado Mortgage Loan Originator (20 or More Licenses) ($200,000) Bond FAQs:

Official and Additional Resources for the Colorado Mortgage Loan Originator (20 or More Licenses) ($200,000) Bond: