Section 3.14.053. Surety bond required of mortgage licensee.

	(a)  An applicant for a mortgage license must file with the department a bond with one or more sureties. Before March 15, 2011, the amount of the bond must be at least $25,000. After March 14, 2011, the amount of the bond must be at least $75,000. The bond must be executed by the applicant and by a surety company authorized to conduct a surety business in the state. The bond must secure the performance by the mortgage licensee of its obligations under AS 06.60  and this chapter and must be in a form acceptable to the department.  
	(b)  The bond must run to the benefit of the department, the Department of Law, or another person with a claim for relief because of a violation of AS 06.60  or this chapter by a mortgage licensee.  
	(c)  The bond must provide that, no later than 90 days after receipt of a final order issued by a court or the department that finds the mortgage licensee has violated AS 06.60  or this chapter and orders the mortgage licensee to pay a sum of money as a result of the violation, the surety shall pay the amount required in the final order to be paid to the department, the Department of Law, or another person up to the full amount of the bond. The bond must provide that if, at the time the surety makes payment under the bond, the surety has received a final order under this subsection from more than one claimant and the total amount of the claims exceeds the bond amount, the surety shall make a pro rata payment to all claimants who have submitted a final order to the surety under this subsection.  
	(d)  No later than 14 days after the mortgage licensee receives notice of an action against the mortgage licensee that could result in recovery against the bond, a mortgage licensee shall provide written notice to the department of the action.  
	(e)  The bond must provide that, no later than 14 days after the surety receives notice of an action against the bond or a final order of a court under (c) of this section, the surety shall provide written notice of the action or final order to the department.  
	(f)  The bond must provide that immediately upon a payment by the surety under the bond, the surety shall provide written notice of the payment to the department.  
	(g)  A mortgage licensee shall ensure that the full amount of the required bond is in effect continuously while the mortgage licensee is licensed and for a three-year period after the department revokes or otherwise terminates the license. Failure to maintain the surety bond at the level required in this section is grounds for immediate suspension of the mortgage license. If the department receives notice of a final order of a court under (c) of this section or submits a final order of the department to the surety under (c) of this section, the department may require the filing of a new bond. If a new bond is required, the mortgage licensee shall file a new bond in the required amount no later than 30 days after receiving notice from the department. Immediately upon payment by the surety under the bond the mortgage licensee shall file a new bond with the department.  
	(h)  The bond must provide that the surety shall provide written notice by certified mail to the department at least 30 days before canceling the surety bond for any reason. Upon receipt by the department of a notice of cancellation, the department will notify the mortgage licensee who is the principal on the bond of the effective date of the cancellation of the bond and that the mortgage license will be suspended when the bond is cancelled, unless the mortgage licensee furnishes the department with an equivalent bond before the effective date of the cancellation. The department will send the notice to the mortgage licensee by certified mail to the mailing address of the mortgage licensee then on file with the department through the registry. The department will suspend the mortgage license on the effective date of the cancellation, unless the surety bond has been replaced, renewed, or otherwise reinstated.  
	(i)  The remedies provided under this section are cumulative and nonexclusive and do not affect any other remedy available at law.  

Authorities

06.60.045;06.60.910

Notes

Authority

AS 06.60.045 AS 06.60.910

History

Eff. 12/4/2010, Register 196