An Indiana DFI-licensed mortgage lender sponsors an MLO but its surety bond excludes that employee. Under DFI sponsorship guidance, which correction is required?
Correct Answer
C) Ensure the sponsor surety bond covers the sponsored MLO
C. The sponsor bond must cover its sponsored MLO. The DFI guidance expressly includes sponsored MLOs in the sponsor bond coverage requirement. Having a company license does not establish that an excluded employee is covered. Scope and exceptions: This question concerns DFI sponsorship, not the separate Secretary of State licensing route. It does not establish a bond amount or an automatic enforcement sanction. Source: Qualifications — Sponsorship — https://www.in.gov/dfi/licensing-and-applications/consumer-credit-licensing/mlo-faq
Why This Is the Correct Answer
C. The sponsor bond must cover its sponsored MLO. The DFI guidance expressly includes sponsored MLOs in the sponsor bond coverage requirement. Having a company license does not establish that an excluded employee is covered. Scope and exceptions: This question concerns DFI sponsorship, not the separate Secretary of State licensing route. It does not establish a bond amount or an automatic enforcement sanction.
Why the Other Options Are Wrong
Option A: Keep the exclusion because company licensure alone supplies coverage
Licensure and actual bond coverage are distinct.
Option B: Replace coverage with a written promise from the employee
An employee promise is not the required bond coverage.
Option D: Replace coverage with the borrower's written consent
Borrower consent does not replace the requirement.
Exam Tip
Verify who the bond covers, not merely whether a bond exists.
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