California Code of Regulations
Title 10 - Investment
Chapter 3 - Commissioner of Financial Protection and Innovation
Subchapter 6 - California Financing Law
Article 3 - Books, Records and Examinations
Section 1437 - Surety Bond

Universal Citation: 10 CA Code of Regs 1437

Current through Register 2024 Notice Reg. No. 38, September 20, 2024

Every licensee shall maintain a surety bond in accordance with section 22112 of the Financial Code as follows:

(a) A licensee that does not make residential mortgage loans and does not employ one or more mortgage loan originators shall post a surety bond in the amount of $25,000.

(b) A mortgage lender, mortgage broker, or mortgage lender and broker shall post a surety bond based on the aggregate dollar amount of residential mortgage loans originated by the mortgage lender, mortgage broker, mortgage lender and broker in the preceding year, as follows:

Aggregate Loans Bond Amount
0 - $1,000,000 $25,000
$1,000,001 - $50,000,000 $50,000
$50,000,001 - $500,000,000 $100,000
Over $500,000,001 $200,000

(c)

(1) The surety bond shall be in the form provided as Exhibit B to the application for a license as a finance lender or broker in section 1422 of these rules, unless the applicant or licensee is filing through NMLS.

(2) For an applicant or licensee filing through NMLS, all surety bonds, amendments, cancellations, notices of claims, and information related to surety bonds, shall be filed with, and processed through, NMLS.

(3) When filing through NMLS, the surety bond shall be in the form of an electronic surety and shall include the following information and representations by the applicant or licensee, and the surety:

Bond No. [Bond Number]

Bond Amount: [Bond Amount]

Effective Date: [Bond Effective Date]

KNOW ALL PERSONS BY THESE PRESENTS:

That we, [Licensee/Principal Name] including any and all trade names, NMLS # [Licensee/Principal NMLS ID], as Principal, whose address for service is [Principal Address for Service], and [Surety Name], NAIC # [Surety NAIC], whose address for service is [Surety Address for Service], duly licensed to do surety business in the State of California as Surety (Principal and Surety together are hereinafter collectively referred to as "Obligors"), are held and firmly bound unto the Commissioner of Financial Protection and Innovation of the State of California ("Commissioner") for use by the Commissioner, for its own benefit, and for the benefit of any person or persons who may have a cause of action against us as the Obligors of this instrument under the provisions of the California Financing Law, California Financial Code section 22000 et seq., the provisions of Chapter 2 (commencing with section 995.010) of Title 14, Part 2, California Code of Civil Procedure, and Financial Code section 22112, hereafter described in the penal sum of [Bond Amount], lawful money of the United States of America, to be paid to the Commissioner for which payment well and truly to be made, we bind ourselves, our heirs, executors, administrators, successors and assigns, jointly and severally, firmly by these presents:

Whereas, the above bound Principal has applied to the Commissioner for a license to engage in the business of finance lending, brokering, or administering a PACE program, as provided by law under the California Financing Law.

THE CONDITION OF THIS OBLIGATION IS SUCH, that if the Principal and any employee or agent representing the Principal, working at any location, faithfully conform to and abide by each and every provision of the California Financing Law, California Financial Code section 22000 et seq., and all amendments thereto, and of all rules and regulations and orders lawfully made by the Commissioner, and pay to the Commissioner, and to any such person or persons having a right of action against the Obligors any and all monies that may become due or owing to the Commissioner, and to such person or persons from said Obligors under and by virtue of the provisions of the California Financing Law, then this obligation to be void; otherwise to remain in full force and effect until the Surety is released from liability by the Commissioner, subject, however, to the following conditions:

1. The Surety may reduce coverage by amending the effective date or the bond amount, or may cancel this bond thirty days from date of receipt of notice delivered electronically through NMLS to the Principal and the Commissioner, but no such amendment or cancellation shall affect any liability which arises from acts or omissions which occur prior to the termination of such thirty-day period.

2. In no event shall the aggregate liability of the Surety for any and all claims exceed the penal sum of this Bond stated herein.

3. The Commissioner has the exclusive right to proceed on this bond against the Principal or Surety hereon or both to recover any and all moneys that may become due or owing.

In Witness Whereof, The said Principal has hereto set his hand and seal and the said Surety has caused this obligation to be duly executed by its duly authorized agent to be hereunto affixed on this [Day of Signatory Date] day of [Month of Signatory Date], [Signatory Year].

By: [Principal Signee]

Principal

I certify under penalty of perjury under the laws of the State of California that I have executed the foregoing bond under an unrevoked power of attorney.

By: [Surety Signee]

Surety

(d) A mortgage lender, mortgage broker, or mortgage lender and broker applicant without a prior year operating history shall make a good faith estimate of the aggregate amount of loans anticipated to be originated in the upcoming year to determine the amount of the surety bond.

1. New section filed 4-1-2010 as an emergency; operative 7-31-2010 (Register 2010, No. 14). A Certificate of Compliance must be transmitted to OAL by 9-28-2010 or emergency language will be repealed by operation of law on the following day.
2. Editorial correction of HISTORY 1 (Register 2010, No. 40).
3. New section refiled 9-28-2010 as an emergency, including repealer of subsection (e); operative 9-28-2010 (Register 2010, No. 40). A Certificate of Compliance must be transmitted to OAL by 12-27-2010 or emergency language will be repealed by operation of law on the following day.
4. New section refiled 12-23-2010 as an emergency; operative 12-23-2010 (Register 2010, No. 52). A Certificate of Compliance must be transmitted to OAL by 3-23-2011 or emergency language will be repealed by operation of law on the following day.
5. Certificate of Compliance as to 12-23-2010 order, including amendment of subsection (a), transmitted to OAL 3-14-2011 and filed 4-25-2011; amendments operative 5-25-2011 (Register 2011, No. 17).
6. Amendment filed 8-5-2021; operative 10-1-2021 (Register 2021, No. 32). Transmission deadline specified in Government Code section 11346.4(b) extended 60 calendar days pursuant to Executive Order N-40-20 and an additional 60 calendar days pursuant to Executive Order N-71-20. Filing deadline specified in Government Code section 11349.3(a) extended 60 calendar days pursuant to Executive Order N-40-20 and an additional 60 calendar days pursuant to Executive Order N-71-20.

Note: Authority cited: Section 22150, Financial Code. Reference: Section 22112, Financial Code.

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