Oregon Implements Rules Regarding Surety Bond Information

• February 27, 2017
• Laura Eckstein

The Oregon Department of Consumer and Business Services, Finance and Securities Regulation, implemented rules allowing licensees to submit required surety bond information through the Nationwide Mortgage Licensing System and Registry. These provisions are effective on April 1, 2017.

The Department of Consumer and Business Services has been working towards full utilization of the Nationwide Mortgage Licensing System and Registry’s (NMLS) features. By requiring electronic submission of the surety bonds, it will make it easier for consumers to access the bond information and will streamline the mortgage licensing process. The proposed rules also remove the grace period after a bond is cancelled that was meant to provide time for new bonds to be sent through the U.S. mail. By implementing this rule, it protects consumers by reducing the period during which a mortgage loan originator may originate loans without the protection of a bond. Licensees will receive more effective notice regarding their bonds because NMLS can be used to quickly notify, and continually remind, licensees of their bond status.

441-860-0020

Application Requirements

Each person applying for a mortgage banker or mortgage broker license shall submit to the director all the following required application materials and information:

1. A completed Form MU1 submitted through the Nationwide Mortgage Licensing System and Registry and approved by the director.
2. A completed Form MU2 submitted through the Nationwide Mortgage Licensing System and Registry and approved by the director for any individual that acts as a control person for the mortgage banker or mortgage broker.
3. (a) A corporate surety bond submitted through the Nationwide Mortgage Licensing System and Registry that meets specified terms calculated using the appropriate loan volume amounts under OAR 441-860-0085 if the applicant acts as the applicant’s sole mortgage loan originator or employs a mortgage loan originator; or(c) An irrevocable letter of credit filed with the director that meets specified terms calculated using the appropriate loan volume amounts under OAR 441-860-0090 if the applicant is a mortgage banker and the applicant is either not a mortgage loan originator or the applicant is not required to employ a mortgage loan originator.
4. (b) A corporate surety bond submitted through the Nationwide Mortgage Licensing System and Registry that meets specified terms calculated using the appropriate loan volume amounts under OAR 441-860-0090; or
5. Financial statements prepared in accordance with generally accepted accounting principles, including a balance sheet and a statement of income or operations, dated not more than six months prior to submission of the application through the Nationwide Mortgage Licensing System and Registry.

[…]

1. The name of the registered agent of the mortgage banker or mortgage broker appointed under ORS 60.111 to accept process, notices or demands served upon the mortgage banker or mortgage broker listed on the application submitted through the Nationwide Mortgage Licensing System and Registry.
2. Biographical information required by OAR 441-860-0021 submitted through the Nationwide Mortgage Licensing System and Registry.
3. The information required under OAR 441-860-0030 for each branch office submitted through the Nationwide Mortgage Licensing System and Registry.

441-860-0050

Renewal of Mortgage Banker and Mortgage Broker License

1. A mortgage banker or a mortgage broker license shall expire on December 31 of each calendar year. At least 30 days prior to the expiration of a mortgage banker or mortgage broker license, the mortgage banker or the mortgage broker shall submit a renewal request for the license to the director through the Nationwide Mortgage Licensing System and Registry and shall:
   1. Complete a renewal request with an attestation that the records are true and accurate; and
   2. Pay any applicable renewal fees prescribed under OAR 441-860-0101.
2. A mortgage banker or mortgage broker shall each calendar year:
   1. Submit, or confirm, through the Nationwide Mortgage Licensing System and Registry a corporate surety bond meeting specified terms and calculated using the appropriate loan volume amounts under OAR 441-860-0085; or
   2. File or have on file with the director an irrevocable letter of credit which meets specified terms calculated using the appropriate loan volume amounts under OAR 441-860-0090
3. The director may refuse to renew a license if a reason exists under ORS 86A.095 through 86A.198 or 86A.200 through 86A.239.
4. If a mortgage banker or mortgage broker submits an application for renewal which is incomplete in any respect, the director shall notify the mortgage banker or broker of the deficiencies on the application. The mortgage banker or mortgage broker shall have 30 days from the date of the notice or the end of the renewal period, whichever occurs first, to complete the application for renewal. If the mortgage banker or mortgage broker fails to complete the application for renewal, and the license shall be terminated on the expiration date by reason of failure to renew.

Other provisions of the rule include 441-860-0025– Rules for Use of Assumed Business Names, 441-885-0010 – Cancellation of Mortgage Banker or Mortgage Broker License for Failure to Maintain Corporate Surety Bond or Irrevocable Letter of Credit, and 441-730-0026 – Corporate Surety Bond for Consumer Finance Licensees Employing a Mortgage Loan Originator.

View the full text at:

http://dfr.oregon.gov/laws-rules/Documents/441-860-0020-permanent.pdf

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