A claimant obtains recovery in an action on the surety bond governed by Minnesota Statutes section 58A.13. What must the residential mortgage originator do under subdivision 4?
Correct Answer
C) File a new bond immediately upon the recovery
Section 58A.13, subdivision 4, requires a new bond immediately upon recovery in any action on the bond. The rule does not wait for renewal, exhaustion of the bond's full amount, or an additional order. Recovery, rather than merely filing a claim, is the event specified in the question. Source: https://www.revisor.mn.gov/statutes/cite/58A.13
Why This Is the Correct Answer
Minnesota requires a residential mortgage originator to file a new bond immediately upon recovery on any action on the bond.
Why the Other Options Are Wrong
Option A: Wait until the next annual renewal to replace the bond
Treat the timing or filing requirement as optional if the transaction appears low risk. is not correct because the governing rule requires the compliant answer shown in the explanation.
Option B: Replace the bond only if the recovery exhausts its full penal amount
Assume the Minnesota requirement does not apply to this branch onboarding review. is not correct because the governing rule requires the compliant answer shown in the explanation.
Option D: Wait for a separate commissioner order before filing a replacement bond
Treat branch, office, and remote-work controls as satisfied by borrower consent alone. is not correct because the governing rule requires the compliant answer shown in the explanation.
Memory Technique
MN -> mn-bonds-records-reports-exams-confidentiality
Exam Tip
Minnesota bond and record questions test Chapter 58 company bonds, Chapter 58A MLO bond coverage, new bond after recovery, commissioner examination and subpoena powers, books and records access, reports, confidentiality, NMLS public disciplinary data, and record-withholding prohibitions.
Common Mistakes to Avoid
- -Using generic federal mortgage facts when Minnesota state-specific rules are being tested
- -Confusing Minnesota individual MLO licensing with company, branch, sponsor, bond, or record requirements
- -Treating Minnesota state-law conduct, advertising, reporting, servicing, or enforcement requirements as optional
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