Mortgage Loan Originator (Less than 20 Licenses) ($100,000) Bond - Statewide in Colorado

Brief Summary

This is the company version of the Colorado MLO bond. One $100,000 bond in the employer's name can stand in for the $25,000 individual bonds of every originator on staff, as long as the company has fewer than 20 licensees. Hire the twentieth and the minimum doubles to $200,000.

Colorado requires every licensed mortgage loan originator to post a surety bond under CRS 12-10-717, and the bond may be held by the originator or in the name of the employing company. The Division of Real Estate sets a $100,000 minimum for a group bond covering fewer than 20 licensees, against $25,000 for an individual bond and $200,000 for 20 or more licensees.

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How to Apply for a Mortgage Loan Originator (Less than 20 Licenses) ($100,000) Bond:

• Count the licensed originators the company bond will cover and confirm the number is under 20.
• Order a $100,000 bond in the name of the employing company.
• Line up group E&O with at least $1,000,000 per claim and a deductible of $50,000 or less.
• Report the bond information to the Colorado Division of Real Estate and keep it current.
• Confirm the bond and E&O are active before renewing between November 1 and December 31.
• Move to the $200,000 bond before the company reaches 20 licensees.

Detailed Information About the Colorado Mortgage Loan Originator (Less than 20 Licenses) ($100,000) Bond:

Which tier you are in

CRS 12-10-704 makes posting a bond a condition of the Colorado mortgage loan originator license, and CRS 12-10-717 leaves the amount to the board's rules. The Division of Real Estate publishes three minimums:

1. Individual bond held by one originator: $25,000. 2. Group bond covering fewer than 20 licensees: $100,000. 3. Group bond covering 20 or more licensees: $200,000.

This page is the middle tier. The count that matters is licensees on the bond, so a company growing toward 20 originators should plan the move to the $200,000 bond before the twentieth license is added.

The E&O requirement runs alongside it

The bond does not replace errors and omissions insurance. For a group of fewer than 20 licensees, the Division requires E&O with at least $1,000,000 per claim, a $1,000,000 annual aggregate and a deductible no greater than $50,000. Individual policies carry lower minimums, and groups of 20 or more need a $2,000,000 aggregate.

How claims work

CRS 12-10-717 says the surety does not have to pay a claimant until a court with jurisdiction makes a final determination of fraud, forgery, criminal impersonation or fraudulent representation. The bond must require the surety to notify the board within 30 days of any payment or cancellation.

Renewal

Colorado MLO licenses expire December 31. The renewal window runs November 1 to December 31, with the 8 hour continuing education requirement done first. Reinstatement is open January 1 through the last day of February. After that the originator has to apply again. At renewal the Division expects the bond and E&O to be active and the policy information current in the Colorado database.

Who does not need the license

CRS 12-10-709 exempts, among others, banks, savings associations and credit unions and their employees, and loan processors and underwriters who are not independent contractors and do not hold themselves out as originators.

Eligibility and Requirements for a Colorado Mortgage Loan Originator (Less than 20 Licenses) ($100,000) Bond:

• Minimum $100,000 for a group bond covering fewer than 20 licensees.
• Bond held by the originator or in the name of the employing company under CRS 12-10-717.
• Surety notice to the board within 30 days of any payment or cancellation.
• Continuous bond coverage for every covered licensee.
• Separate errors and omissions insurance at the group minimums.
• Annual license renewal with 8 hours of continuing education.

Colorado Mortgage Loan Originator (Less than 20 Licenses) ($100,000) Bond FAQs:

Official and Additional Resources for the Colorado Mortgage Loan Originator (Less than 20 Licenses) ($100,000) Bond: