Iowa Code 535B.9 – Bonds required of license applicants
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1. An applicant for a license shall file with the administrator a bond furnished by a surety company authorized to do business in this state, together with evidence of whether the applicant is seeking to transact business as a mortgage broker, mortgage banker, or closing agent. Until such time as the superintendent pursuant to administrative rule determines a bond amount that reflects the dollar value of loans originated, the bond shall be in the amount of one hundred thousand dollars for applicants seeking to transact business as a mortgage broker or mortgage banker. For applicants seeking to transact business as a closing agent, the bond shall be in the amount of twenty-five thousand dollars, unless the administrator by rule establishes a higher bond amount. The bond shall be continuous in nature until canceled by the surety with not less than thirty days’ notice in writing to the mortgage broker, mortgage banker, or closing agent and to the administrator indicating the surety’s intention to cancel the bond on a specific date.
Terms Used In Iowa Code 535B.9
- Administrator: means the superintendent of the division of banking of the department of commerce. See Iowa Code 535B.1
- Closing agent: means a person who is not a party to the real estate transaction, who provides real estate closing services. See Iowa Code 535B.1
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Licensee: means a person licensed under this chapter; however, any natural person who is acting solely as an employee or agent of a mortgage banker, mortgage broker, or closing agent licensed under this chapter need not be separately licensed under this chapter. See Iowa Code 535B.1
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgage banker: means a person who does one or more of the following:a. See Iowa Code 535B.1
- Mortgage broker: means a person who arranges or negotiates, or attempts to arrange or negotiate, at least four mortgage loans or commitments for four or more such loans on residential real property located in this state in a calendar year. See Iowa Code 535B.1
- Person: means a natural person, an association, joint venture or joint stock company, partnership, limited partnership, business corporation, nonprofit corporation, or any other group of individuals however organized. See Iowa Code 535B.1
- Rule: includes "regulation". See Iowa Code 4.1
- state: when applied to the different parts of the United States, includes the District of Columbia and the territories, and the words "United States" may include the said district and territories. See Iowa Code 4.1
2. For applicants seeking to transact business as a mortgage broker or mortgage banker, the bond shall be for the use of the state and any persons who may have causes of action against the applicant. The bond shall be conditioned upon the applicant’s faithfully conforming to and abiding by this chapter and any rules adopted under this chapter and shall require that the surety pay to the state and to any persons all moneys that become due or owing to the state and to the persons from the applicant by virtue of this chapter.3. For applicants seeking to transact business as a closing agent, the bond shall be conditioned upon the applicant’s faithfully conforming to and abiding by this chapter and any rules adopted under this chapter and shall require that the surety pay to the state all moneys that become due or owing to the state from the applicant by virtue of this chapter.4. In lieu of filing a bond, the applicant may pledge an alternative form of collateral acceptable to the administrator, if the alternative collateral provides protection to the state and any aggrieved person that is equivalent to that provided by a bond.5. A licensee may not act as a closing agent unless the bond requirements in this section are in place at the time of a real estate closing.