1998 Minnesota Statutes

     58.08 Bonds; letters of credit. 

    Subdivision 1.    Requirement of residential mortgage 
 originators.  A residential mortgage originator licensee shall 
 continuously maintain a surety bond or irrevocable letter of 
 credit in an amount not less than $50,000 in a form approved by 
 the commissioner, issued by an insurance company or bank 
 authorized to do so in this state.  The bond must be available 
 for the recovery of expenses, fines, and fees levied by the 
 commissioner under this chapter, and for losses or damages 
 incurred by borrowers as the result of a licensee's 
 noncompliance with the requirements of this chapter, sections 
 325D.43 to 325D.48, and 325F.67 to 325F.69, or breach of 
 contract. 

    The bond or irrevocable letter of credit must be submitted 
 with the originator's license application, and evidence of 
 continued coverage must be submitted with each renewal.  Any 
 change in the bond or letter of credit must be submitted for 
 approval by the commissioner, within ten days of its execution. 

    Subd. 2.    Requirement of residential mortgage servicers. 
  A residential mortgage servicer licensee shall continuously 
 maintain a surety bond or irrevocable letter of credit in an 
 amount not less than $100,000 in a form approved by the 
 commissioner, issued by an insurance company or bank authorized 
 to do so in this state.  The bond must be available for the 
 recovery of expenses, fines, and fees levied by the commissioner 
 under this chapter, and for losses or damages incurred by 
 borrowers or other aggrieved parties as the result of a 
 licensee's noncompliance with the requirements of this chapter, 
 sections 325D.43 to 325D.48, and 325F.67 to 325F.69, or breach 
 of contract relating to activities regulated by this chapter.  

    The bond or irrevocable letter of credit must be submitted 
 with the servicer's license application and evidence of 
 continued coverage must be submitted with each renewal.  Any 
 change in the bond or letter of credit must be submitted for 
 approval by the commissioner, within ten days of its execution. 

    Subd. 3.    Exemption.  Subdivisions 1 and 2 do not 
 apply to mortgage originators or mortgage servicers who are 
 approved as seller/servicers by the Federal National Mortgage 
 Association or the Federal Home Loan Mortgage Corporation. 

    HIST: 1998 c 343 art 1 s 8