If an originator fails to maintain their surety bond, what is the likely consequence?

When an originator fails to maintain their surety bond, the most significant consequence is the expiration of their license. A surety bond is a security measure that protects consumers and ensures compliance with laws and regulations governing mortgage lending. It acts as a financial guarantee that the originator will uphold their obligations.

If the bond is not maintained, it indicates a failure to meet the regulatory requirements set by the licensing authority, which can result in the automatic expiration of the license. This ensures that only those who meet the necessary financial and ethical standards are allowed to operate within the mortgage industry, thus protecting both consumers and the integrity of the market. Continuing to practice as an originator without a valid license exposes them to legal and financial penalties, rendering them unable to conduct business legally.