A licensing coordinator is preparing a New York renewal checklist involving financial responsibility. Which rule is correct?
Correct Answer
B) New York Article 12-E requires each mortgage loan originator to be covered by a surety bond under Banking Law 599-k, and DFS instructs originating entities to ensure MLO coverage remains in effect.
New York Article 12-E requires each mortgage loan originator to be covered by a surety bond under Banking Law 599-k, and DFS instructs originating entities to ensure MLO coverage remains in effect.
Why This Is the Correct Answer
New York Article 12-E requires each mortgage loan originator to be covered by a surety bond under Banking Law 599-k, and DFS instructs originating entities to ensure MLO coverage remains in effect.
Why the Other Options Are Wrong
Option A: Use a verbal explanation instead of the required license status, disclosure, record, or filing.
Use a verbal explanation instead of the required license status, disclosure, record, or filing. is not correct because the governing rule requires the compliant answer shown in the explanation.
Option C: Use a supervisory file review exception instead of satisfying the rule before activity continues.
Use a supervisory file review exception instead of satisfying the rule before activity continues. is not correct because the governing rule requires the compliant answer shown in the explanation.
Option D: Close or renew first, then decide whether the supervisory file review needs a compliance correction.
Close or renew first, then decide whether the supervisory file review needs a compliance correction. is not correct because the governing rule requires the compliant answer shown in the explanation.
Memory Technique
NY -> ny-dfs-exams-investigations-discipline-penalties-surety
Exam Tip
Enforcement questions test DFS suspension/revocation, restitution, exams, Article 12-D discipline, surety bonds under 599-k and 3 NYCRR 420.15, unlicensed activity, confidentiality, and information sharing.
Common Mistakes to Avoid
- -Using generic federal mortgage facts when New York DFS or Banking Law rules are being tested
- -Confusing Article 12-D company authority with Article 12-E individual MLO authority
- -Treating New York high-cost, subprime, reverse mortgage, MCR, unique identifier, or surety bond rules as optional
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