NAC645B.062. Surety bonds.

     1. Except as otherwise provided in this section, a mortgage agent or mortgage broker shall deposit with the Commissioner and keep in full force and effect a corporate surety bond payable to the State of Nevada which is in the amount set forth in this section and is executed by a corporate surety satisfactory to the Commissioner.

     2. If a mortgage agent is an employee of, or is associated with, a mortgage broker subject to the provisions of chapter 645B of NRS or a mortgage banker subject to the provisions of chapter 645E of NRS, the surety bond of the mortgage broker or mortgage banker may be used to fulfill the mortgage agent’s individual surety bond requirement so long as the surety bond of the mortgage broker or mortgage banker:

     (a) Expressly covers the mortgage agent as a principal; and

     (b) Names the mortgage broker or mortgage banker as a principal and names all mortgage agents employed by or associated with the mortgage broker or mortgage banker as principals, either by individual name or as a group, such as “All Employed or Associated Mortgage Agents.”

     3. A bond deposited pursuant to this section must be in substantially the following form:

     Know All Persons by These Presents, that ....................., as principal, and ...................., as surety, are held and firmly bound unto the State of Nevada for the use and benefit of any person who suffers damages because of a violation of any provision of chapter 645B, 645E or 645F of NRS or any regulation adopted pursuant thereto, in the sum of ...................., lawful money of the United States, to be paid to the State of Nevada for such use and benefit, for which payment well and truly to be made, and that we bind ourselves, our heirs, executors, administrators, successors and assigns, jointly and severally, firmly by these presents.

     The condition of that obligation is such that:

     Whereas, the principal has been issued a license as a mortgage agent, mortgage broker or mortgage banker by the Commissioner of Mortgage Lending and is required to furnish a bond, which is conditioned as set forth in this bond:

     Now, therefore, if the principal, and the principal’s agents and employees, strictly, honestly and faithfully comply with the provisions of chapters 645B, 645E and 645F of NRS and any regulation adopted pursuant thereto, and pay all damages suffered by any person because of a violation of any provision of chapter 645B, 645E or 645F of NRS or any regulation adopted pursuant thereto or by reason of any fraud, dishonesty, misrepresentation or concealment of material facts growing out of any transaction governed by the provisions of chapter 645B, 645E or 645F of NRS or any regulation adopted pursuant thereto, then this obligation is void; otherwise it remains in full force.

     This bond becomes effective on the .......... (day) of .......... (month) of .......... (year), and remains in force until the surety is released from liability by the Commissioner of Mortgage Lending or until this bond is cancelled by the surety. The surety may cancel this bond and be relieved of further liability hereunder by giving 60 days’ written notice to the principal and to the Commissioner of Mortgage Lending.

     In Witness Whereof, the seal and signature of the principal hereto is affixed, and the corporate seal and the name of the surety hereto is affixed and attested by its authorized officers at ...................., Nevada, this .......... (day) of .......... (month) of .......... (year).

.....................  (Seal)

Principal

.....................  (Seal)

Surety

By ....................

Attorney-in-fact

.........................................

Licensed registered agent

     4. The required amount of the surety bond that complies with the provisions of this section is calculated by the Commissioner by determining the annual loan production amount for the person or persons covered under the bond, and:

     (a) In the case of an initial surety bond, the expected annual loan production is determined by an estimate of the Commissioner; and

     (b) After the deposit of an initial surety bond, the expected annual loan production is based upon the annual loan production in the previous year.

     5. The surety bond amounts will be set and adjusted as necessary annually by the Division in accordance with the following scale:

Annual Loan Production                             Bond Amount Required

$20,000,000 or less..................................... $50,000

Greater than $20,000,000........................... $75,000

     6. The procedure regarding cancellation of a bond is as follows:

     (a) A surety may cancel a bond upon giving 60 days’ notice to the Commissioner by certified mail;

     (b) Upon receipt by the Commissioner of notice, the Commissioner will immediately notify the mortgage agent or mortgage broker who deposited the bond:

          (1) Of the effective date of the cancellation; and

          (2) That the license of the mortgage agent or mortgage broker will be revoked unless the mortgage agent or mortgage broker furnishes an equivalent bond before the effective date of the cancellation;

     (c) The notification by the Commissioner must be sent to the mortgage agent or mortgage broker by certified mail to the last address of record filed in the office of the Division; and

     (d) If the mortgage agent or mortgage broker does not comply with any requirements set out in the notification from the Commissioner, the license of the mortgage agent or mortgage broker must be revoked on the date the bond is cancelled.

     7. Any person:

     (a) May claim against a bond by bringing an action in a court of competent jurisdiction on the bond for damages to the extent covered by the bond, but an action may not be commenced after the expiration of 3 years following the commission of the act on which the action is based; and

     (b) Who claims against a bond shall notify the Commissioner in writing by certified mail upon filing the action.

     8. Upon receiving a request from a person for whose benefit a bond is required, the Commissioner will notify the person:

     (a) That a bond is in effect and the amount of the bond; and

     (b) If there is an action against the bond, of the title of, the court and case number of, and the amount sought in that action.

     9. If a surety wishes to make payment without awaiting action by a court:

     (a) The amount of the bond must be reduced to the extent of any payment made by the surety in good faith under the bond; and

     (b) Any payment must be based on written claims received by the surety before any action is taken by a court.

     10. A surety may bring an action for interpleader against all claimants upon the bond, and if the surety brings an action, the surety:

     (a) Shall publish notice of the action at least once each week for 2 weeks in every issue of a newspaper of general circulation in the county of the principal place of business of the mortgage agent or mortgage broker; and

     (b) May deduct its costs of the action, including attorney’s fees and publication, from its liability under the bond.

     11. Claims against a bond:

     (a) Have equal priority;

     (b) If the bond is insufficient to pay all claims in full, must be paid on a pro rata basis, but partial payment of claims is not full payment; and

     (c) Do not preclude a claimant from bringing an action against a mortgage agent or mortgage broker for an unpaid balance.

     12. A bond used to fulfill the requirements of NRS 645B.042 may be used to fulfill, wholly or partially, the bond requirement of this section, provided that:

     (a) If used to fulfill wholly the bond requirement of this section, the amount of the bond used pursuant to NRS 645B.042 is equal to or greater than the amount of the bond required pursuant to this section; and

     (b) If used to fulfill partially the bond requirement of this section, the remaining difference is made up by another bond that meets the requirements of this section and is in an amount equal to or greater than the difference between the two bonds.

     13. A substitute for a surety bond required by NRS 645B.042, as provided for in NRS 645B.044, may not be used to fulfill, wholly or partially, the bond requirement of this section.

     (Added to NAC by Comm’r of Mortgage Lending by R035-10, eff. 7-22-2010)