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Have a question? +1 815-826-6324 (815-8-BondAI) phil@AmericasSuretyBonds.com
Army Veteran Owned | Expert Surety Bonds Since 2004
The $50,000 is the floor, not the number. O.R.C. 1322.32 sets the bond at one half of one percent of the aggregate loan amount of residential mortgage loans originated in the immediately preceding calendar year, and O.A.C. 1301:8-7-14 applies that same calculation to a loan processing or underwriting company, which obtains its bond in the same manner as a registrant. The cap on that calculation is $150,000, and the cap on an individual licensee bond is $100,000. A company coming off a heavy origination year should expect a figure above the minimum at renewal.
Ohio requires a loan processing or underwriting company operating under a letter of exemption to obtain and maintain a corporate surety bond issued by a bonding or insurance company authorized to do business in Ohio, in favor of the Superintendent of Financial Institutions. Rule 1301:8-7-14 has the company bond written in the same manner as a registrant's, at one half of one percent of prior calendar year originations, and no less than $50,000. A licensee covered by the company's bond does not obtain an individual bond.
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O.R.C. 1322.32(A)(1) sets a registrant's bond at one half of one percent of the aggregate loan amount of residential mortgage loans originated in the immediately preceding calendar year, not exceeding $150,000, with a floor of $50,000 for mortgage lenders and mortgage brokers plus an additional $10,000 for each location beyond the first. Registrants engaged exclusively in mortgage servicing carry a minimum of $150,000.
O.R.C. 1322.32(A)(2)(a) covers a licensee employed by or associated with an entity holding a valid letter of exemption. That bond uses the same one half of one percent calculation, caps at $100,000, and never falls below $50,000. Paragraph (A)(2)(b) then says licensees covered by a bond obtained by the registrant or exempt entity they work for are not required to obtain an individual bond.
O.A.C. 1301:8-7-14(A) applies the registrant style rules to a qualified exempt entity or a loan processing or underwriting company, and paragraph (D) restates the one half percent calculation with the $150,000 cap.
Rule 1301:8-7-14(B) is direct. No licensee may perform the clerical or support duties of a loan processor or underwriter in Ohio as an employee of a loan processing or underwriting company, or as an independent contractor, unless either the licensee or the company on the licensee's behalf has obtained and maintains in effect at all times a corporate surety bond from a company authorized in Ohio.
One surety bond in the appropriate aggregate amount covers the registrant, qualified exempt entity or loan processing or underwriting company regardless of the number of registered or exempted office locations. An endorsement rider is used to increase or decrease the amount when an office opens or closes. Individual licensee bonds are issued in the licensee's name and state the home address listed in the licensee's NMLS account.
Two layers. Under the rule, whenever the penal sum drops below the required amount, the company and the licensees employed by or associated with it must immediately cease originating residential mortgage loans until the bond is restored to full value, and failure to restore it within thirty days of the first date of reduction is grounds for a fine, suspension, refusal to renew, or revocation of the certificate of registration or the approved letter of exemption. Under the statute, the registrant or licensee must furnish a new or additional bond, or an endorsement from the surety reinstating the bond to the required penal sum.
The term of the bond coincides with the term of registration, or the term of licensure for an individual bond, and a copy is filed with the superintendent. The bond cannot be canceled by the principal or the surety except on notice to the superintendent by certified mail, return receipt requested, and cancellation is not effective before thirty days after the superintendent receives that notice. Liability for any act or omission occurring during the bond term stays in effect for at least two years after the bond is terminated or canceled, and it is not affected by misrepresentation, breach of warranty, nonpayment of premium, or the insolvency or bankruptcy of the principal.
The principal must notify the superintendent by certified mail, within ten days, of any action brought by a buyer alleging injury from a violation of the chapter or rules, and of any judgment entered. A corporate surety that pays any claim or judgment must notify the superintendent by certified mail within ten days of payment.
It is in favor of the Superintendent of Financial Institutions and for the exclusive benefit of any buyer injured by a violation of Chapter 1322 or its rules. Aggregate surety liability for all breaches cannot exceed the penal sum.
No. It is one half of one percent of the aggregate loan amount of residential mortgage loans originated in the immediately preceding calendar year, with $50,000 as the floor. A bond written in the manner of a registrant caps at $150,000, and an individual licensee bond caps at $100,000.
Not if the company bonds them. O.R.C. 1322.32(A)(2)(b) provides that licensees covered by a corporate surety bond obtained by the registrant or the exempt entity they are employed by or associated with are not required to obtain an individual bond. A licensee working as an independent contractor needs a bond in the licensee's own name.
Yes. One surety bond in the appropriate aggregate amount covers the company regardless of the number of registered or exempted office locations, and an endorsement rider adjusts the amount when a location opens or closes.
Originations must stop immediately until the bond is restored to full value. Failure to restore it within thirty days of the first date the penal sum was reduced is grounds for a fine, suspension, refusal to renew, or revocation of the certificate of registration or the approved letter of exemption. The statute also requires a new or additional bond or a reinstating endorsement.
The bond cannot be canceled by the principal or the surety except on notice to the superintendent by certified mail, return receipt requested, and cancellation is not effective before thirty days after the superintendent receives it.
No. Liability for any act or omission occurring during the bond term is maintained for at least two years after the bond is terminated or canceled, and it is unaffected by misrepresentation, breach of warranty, failure to pay premium, or insolvency or bankruptcy of the principal.
Any buyer injured by a violation of Chapter 1322 or a rule adopted under it. The bond runs in favor of the Superintendent of Financial Institutions, and aggregate surety liability for all breaches cannot exceed the penal sum.
Notice to the superintendent by certified mail within ten days of any buyer action alleging a violation, and within ten days of notice of any judgment. The surety separately must notify the superintendent within ten days after paying any claim or judgment.
Ohio does not set premium. A surety prices the bond off underwriting: company financials, ownership credit, time in business, and any prior claims or regulatory action. Because the required penal sum moves with prior year origination volume, recalculate the amount before each renewal and quote against that figure rather than the $50,000 minimum.
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