32-9-123. Irrevocable letter of credit or surety bond -- notice of legal action. (1) Each mortgage broker, other than an individual mortgage broker working as an employee of a mortgage broker, shall maintain at all times an irrevocable letter of credit or surety bond, naming the department as a beneficiary, in the amount of $25,000 for each principal location and branch office identified in the application for licensure. The department shall use the proceeds of the letters of credit or surety bonds to reimburse borrowers or bona fide third parties who successfully demonstrate a financial loss because of an act of a licensee that violates the provisions of this part.
     (2) A mortgage broker or loan originator shall give notice to the department by certified mail within 15 days of the mortgage broker's or loan originator's knowledge of the initiation of an investigation or the entry of a judgment in a criminal or civil action. The notice must be given if the investigation or the legal action is in any state and involves a mortgage broker, anyone having an ownership interest in a mortgage broker entity, or a loan originator. In the case of a legal action, the notice must include a copy of the criminal or civil judgment.

     History: En. Sec. 15, Ch. 516, L. 2003; amd. Sec. 9, Ch. 498, L. 2007.