Rhode Island Surety Bond and Minimum Net Worth Requirements for Mortgage Loan Originators By Patricia Antonelli, Esq.

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On November 5, 2010, the Division of Banking of the Rhode Island Department of Business Regulation (the “DBR”) introduced Banking Regulation 6 entitled “Surety Bond and Minimum Net Worth Pursuant to the Secure and Fair Enforcement Mortgage Licensing Act of 2009”. The purpose of the proposed regulation (known as “BR 6”), is to set forth the requirements for Mortgage Loan Originators to comply with R.I.G.L. § 19-14.10-14 entitled “Surety Bond Required”, and R.I.G.L. § 19-14.10-14(e) the minimum net worth requirements for Mortgage Loan Originators. BR 6 does provide for the fulfillment of Surety Bond requirements for Mortgage Loan Originators who are employees of Rhode Island licensed lenders and loan brokers by utilizing the Surety Bond of the licensed lender or loan broker with certain conditions. With respect to Minimum Net Worth requirements, however, Mortgage Loan Originators are required to maintain those requirements individually, and may not utilize the net worth of their employers.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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