This text of Indiana § 24-4.4-2-402.3 (Surety bond; requirements; amount; termination; liability; notices) is published on Counsel Stack Legal Research, covering Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
3.
(1)Each:
(b)person that is exempt (either under this article or under IC 24-4.5) from licensing and that:
(i)employs a licensed mortgage loan originator; or
(ii)sponsors a licensed mortgage loan originator as permitted
by IC 24-4.4-1-202(b)(8) or by 750 IAC 9;
must be covered by a surety bond in accordance with this section.
(2)A surety bond must:
(a)provide coverage for:
(ii)a person that is exempt from licensing and that employs a
licensed mortgage loan originator, or that sponsors a licensed
mortgage loan originator as permitted by IC 24-4.4-1-202(b)(8)
or by 750 IAC 9;
in an amount as prescribed in subsection (4);
(b)be in a form prescribed by the director;
(c)be in effect:
(i)during the term of the creditor's license; or
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3. (1) Each:
(a) creditor; and
(b) person that is exempt (either under this article or under IC 24-4.5) from licensing and that:
(i) employs a licensed mortgage loan originator; or
(ii) sponsors a licensed mortgage loan originator as permitted
by IC 24-4.4-1-202(b)(8) or by 750 IAC 9;
must be covered by a surety bond in accordance with this section.
(2) A surety bond must:
(a) provide coverage for:
(i) a creditor; or
(ii) a person that is exempt from licensing and that employs a
licensed mortgage loan originator, or that sponsors a licensed
mortgage loan originator as permitted by IC 24-4.4-1-202(b)(8)
or by 750 IAC 9;
in an amount as prescribed in subsection (4);
(b) be in a form prescribed by the director;
(c) be in effect:
(i) during the term of the creditor's license; or
(ii) at any time during which the person exempt from licensing
employs a licensed mortgage loan originator or sponsors a
licensed mortgage loan originator as permitted by IC 24-4.4-1-202(b)(8) or by 750 IAC 9;
as applicable;
(d) subject to subsection (3), remain in effect during the two (2)
years after:
(i) the license of the creditor is surrendered or terminated; or
(ii) the person exempt from licensing ceases to employ a
licensed mortgage loan originator, or ceases to sponsor a
licensed mortgage loan originator as permitted by IC 24-4.4-1-202(b)(8) or by 750 IAC 9, or to offer financial
services to individuals in Indiana, whichever is later;
as applicable;
(e) be payable to the department for the benefit of:
(i) the state; and
(ii) individuals who reside in Indiana when they agree to
receive financial services from the creditor or the person
exempt from licensing, as applicable;
(f) be issued by a bonding, surety, or insurance company
authorized to do business in Indiana and rated at least "A-" by at
least one (1) nationally recognized investment rating service; and
(g) have payment conditioned upon:
(i) the creditor's or any of the creditor's licensed mortgage loan
originators'; or
(ii) the exempt person's or any of the exempt person's licensed
mortgage loan originators';
noncompliance with or violation of this chapter, 750 IAC 9, or
other federal or state laws or regulations applicable to mortgage
lending.
(3) The director may adopt rules or guidance documents with
respect to the requirements for a surety bond as necessary to
accomplish the purposes of this article. Upon written request from:
(a) a creditor described in subsection (1)(a); or
(b) an exempt person described in subsection (1)(b);
the director may, at the discretion of the director, waive or shorten the
two (2) year period set forth in subsection (2)(d) during which a surety
bond required by this section must remain in effect after the occurrence
of an event described in subsection (2)(d)(i) or (2)(d)(ii), as applicable.
(4) The penal sum of the surety bond shall be maintained in an
amount that reflects the dollar amount of mortgage transactions
originated as determined by the director. If the principal amount of a
surety bond required under this section is reduced by payment of a
claim or judgment, the creditor or exempt person for whom the bond
is issued shall immediately notify the director of the reduction and, not
later than thirty (30) days after notice by the director, file a new or an
additional surety bond in an amount set by the director. The amount of
the new or additional bond set by the director must be at least the
amount of the bond before payment of the claim or judgment.
(5) If for any reason a surety terminates a bond issued under this
section, the creditor or the exempt person shall immediately notify the
department and file a new surety bond in an amount determined by the
director.
(6) Cancellation of a surety bond issued under this section does not
affect any liability incurred or accrued during the period when the
surety bond was in effect.
(7) The director may obtain satisfaction from a surety bond issued
under this section if the director incurs expenses, issues a final order,
or recovers a final judgment under this chapter.
(8) Notices required under this section must be made in writing and
submitted through the NMLSR or any other electronic registration
system that may be approved by the director.