A mortgage banker shall not under the authority of its letter of exemption originate or make a residential mortgage loan which is secured by other than a first lien. A mortgage banker may hold an approved letter of exemption under Chapter J A mortgage banker holding an approved letter of exemption shall not act as a mortgage broker.
A mortgage broker holding a certificate of registration may act as a mortgage banker without having to obtain an approved letter of exemption from the superintendent provided that all residential mortgage loan transactions shall comply with the requirements for loans made by a registered mortgage broker.
K A residential mortgage loan is primarily for personal, family, or household use if more than one half of the total loan amount is used for consumer purposes and not for business purposes. In assessing the purpose or purposes, if the loan is a hybrid used for both consumer and business purposes , the superintendent shall consider the totality of the circumstances surrounding the loan and not merely the purpose of cash-out proceeds.
If more than one half of the total loan amount is for business purposes, then the requirements of Chapter L Notwithstanding paragraph K of this rule, a residential mortgage loan made to a borrower for purposes of investing in a dwelling to either lease, rent, or resell for profit is considered a business purpose loan and is not subject to the requirements of Chapter M Nothing in division E 2 b of section N A registrant or qualified exempt entity shall not hold a certificate of registration issued pursuant to Chapter O A registrant or qualified exempt entity shall not evade the limits on points and fees for qualified mortgages set forth in 12 C.
Assisting a borrower with improving his or her credit record, history, or rating as well as removing adverse credit information are considered part of the normal activities of a registrant or qualified exempt entity. A Submitting an application for a certificate of registration, letter of exemption or license via the NMLS does not authorize the applicant to begin acting as a registrant, qualified exempt entity, or licensee.
The applicant must first receive an active certificate of registration, letter of exemption or license from the superintendent to be authorized to begin acting as a registrant, qualified exempt entity, or licensee. B Each question and answer on the NMLS, including any exhibit or attachment, is material to the application process.
Submitting false or fraudulent information or omitting information is grounds to refuse to issue the certificate of registration, letter of exemption, or license and may subject the applicant and individuals who signed and attested to the application to administrative, civil, or criminal actions. C Engaging in mortgage broker or loan origination activity on or after the first day of January by a person who fails to submit a renewal application via the NMLS by the thirty-first day of January constitutes activity without a certificate of registration or license in violation of Chapter D Registrants, qualified exempt entities, licensees, and applicants are responsible for ensuring that all information maintained on the NMLS is current and accurate.
If information on the NMLS becomes out-of-date or inaccurate for any reason, the registrant, qualified exempt entity, licensee or applicant shall correct the information within ten business days of the change unless a different time frame is specified in Chapter E In order to apply for an active license, a licensee or applicant to be a licensee shall have a sponsorship request submitted via the NMLS on his or her behalf by the registrant or qualified exempt entity with whom the licensee or applicant seeks to be associated or employed.
To be authorized to originate residential mortgage loans for a registrant or qualified exempt entity, the sponsorship request must be approved by the superintendent and the loan originator must receive an active license from the superintendent. G An individual or registered loan originator may obtain or maintain a license in escrow without having a sponsorship submitted via the NMLS on his or her behalf by a registrant or qualified exempt entity.
The licensee shall not originate residential mortgage loans while his or her license is in escrow. H A licensee shall not originate a residential mortgage loan for a transaction that is governed by sections An individual may obtain a loan originator license under Chapter An individual shall not be employed by or associated with more than one registrant or qualified exempt entity at any one time.
For purposes of this paragraph, registrant includes a person registered under sections I When transferring to a different registrant or qualified exempt entity, or when a loan originator seeks to activate an escrowed license, a nonrefundable fifteen dollar fee plus applicable NMLS fees must be submitted via the NMLS.
J An applicant may request the withdrawal of an application for a certificate of registration, letter of exemption or license prior to a determination on the application being made by the superintendent by submitting a request via the NMLS. The application may only be withdrawn with the permission of the superintendent.
An application withdrawn at the request of the applicant may only be re-activated within seven calendar days of the withdrawal for good cause shown and at the discretion of the superintendent.
A withdrawn application does not prohibit a person from reapplying. K An escrowed or suspended license is subject to all of the following:. Placing a license in escrow or having a license suspended does not extend or toll the time for completion of the licensee's continuing education requirements;.
L A suspended certificate of registration or letter of exemption is subject to all of the following:. M A suspended certificate of registration, letter of exemption, or license may be returned to active status if it meets all of the following:.
N A certificate of registration, letter of exemption or license may be surrendered in accordance with the following:. A person may surrender by submitting a written statement to the superintendent or by submitting a request via the NMLS. The certificate of registration, letter of exemption or license may only be surrendered with the permission of the superintendent;. A In accordance with section The special account shall be in the name of the registrant as it appears on its certificate of registration.
C A registrant shall keep records of all deposits, withdrawals, and disbursements from the special account. The records shall include the following:. D All funds required to be deposited in the special account shall be deposited prior to the end of the tenth business day following receipt.
E All deposits to the special account shall be documented by a bank statement or deposit slip which has been validated by bank imprint confirming that the funds were actually deposited into the special account. F Deposits to the special account shall be limited to funds delivered and made payable to the registrant for payment to bona fide third parties.
Notwithstanding the foregoing sentence, a registrant may deposit funds into the special account for purposes of establishing and maintaining the special account. G A registrant is responsible for the disbursement of all special account funds.
Funds deposited in the special account shall not be commingled with other funds. H When a registrant receives a check or wire transfer from closing which includes both the registrant's fee and a payment for a bona fide third party fee, the registrant shall instruct the depository institution to split the check or wire transfer and route any moneys due to a bona fide third party to the special account, and moneys due the registrant to its general account. I After a registrant has satisfied all payments owed to bona fide third parties, and it is then determined that moneys must be refunded to a borrower, such refund must be remitted to the borrower within five business days.
A In accordance with division B of section The four-year retention period commences on the date the residential mortgage loan is closed or, if the residential mortgage loan is not closed, the date of the withdrawal or denial of the residential mortgage loan application.
If the residential mortgage loan is serviced by a qualified exempt entity, the four-year retention period commences on the date the residential mortgage loan is paid in full or the date the registrant ceases to service the residential mortgage loan. The retention period for advertisements commences from the date the advertisements are published, broadcast or disseminated.
B A registrant or qualified exempt entity shall notify the superintendent via the NMLS of a change of location of its records pertaining to business conducted pursuant to Chapter C A registrant or qualified exempt entity who maintains its records pertaining to business transacted pursuant to Chapter At the request of the superintendent, payment of the estimated travel, lodging and per diem expenses, as determined by the superintendent, shall be made in advance and placed on deposit with the division.
After actual costs are determined, any excess funds shall be refunded to the registrant or qualified exempt entity. D All records shall be kept current and shall be available at all times during normal business hours for review by the superintendent. Records should be legible and maintained in a type size that is clearly readable without magnification and in conformity with any specific typeface or font size that may be required by state or federal law.
Except when otherwise provided by federal or state law, records shall be maintained in English. When records are allowed to be in a language other than English, the registrant or qualified exempt entity, at its expense, shall be responsible for providing the superintendent with a full and accurate translation. For purposes of this rule, "current" means within thirty days from the date of the occurrence of the event required to be recorded.
E A registrant or qualified exempt entity shall segregate the records pertaining to business conducted pursuant to Chapter F Records pertaining to business conducted pursuant to Chapter Any records maintained on an electronic storage media or system shall meet all of the following requirements:.
At all times, a registrant or qualified exempt entity must be able to have indices of the electronic records being stored available for examination by the superintendent. Each index must also be duplicated and the duplicate copies must be stored separately from the original copy of each index. Original and duplicate indices must be preserved for the time required for the indexed records;. At all times, a registrant or qualified exempt entity must be able to have the results of the audit system available for examination by the superintendent.
The audit results must be preserved for the time required for the audited records;. The superintendent may grant additional time for good cause shown upon receipt of a request for additional time from the registrant or qualified exempt entity. G A registrant or qualified exempt entity shall create, maintain, keep current and preserve the following books and records:. The spreadsheet shall contain for each borrower the closing date of the residential mortgage loan obtained for the borrower, the amount of the residential mortgage loan, the licensee responsible for originating the residential mortgage loan, the identity of the lender that funded or purchased the residential mortgage loan, the residential mortgage loan application date, the residential mortgage loan program type, the underwriter whose decision was relied upon to close and fund the residential mortgage loan, the property address, and the identifying loan number;.
The settlement statement file shall be maintained separately from the settlement statements contained in the individual borrower files. Settlement statements are not acceptable proof of receipt for purposes of this rule;. H In order to reduce the risk of consumer fraud and related harms, including identity theft, registrants and qualified exempt entities shall be required to comply with section of the "Fair and Accurate Credit Transactions Act of ," Stat.
Part and 16 C. Part , as in effect January 12, , pertaining to the maintenance, security, and disposal of consumer information and records.
A Every advertisement placed, or caused to be placed, by a registrant or licensee shall:. If a registrant has been approved by the superintendent to conduct business using a trade name or fictitious name, the registrant may use its name, trade name, or fictitious name, or any combination of them, as they appear on its certificate of registration;.
B For purposes of paragraph A 2 of this rule, a registrant may opt to state only its NMLS unique identifier in lieu of stating both its certificate of registration number and NMLS unique identifier. C For purposes of paragraph A 3 of this rule, a licensee may opt to state only his or her NMLS unique identifier in lieu of stating both the licensee's license number and NMLS unique identifier.
D When the information required by paragraphs A to C of this rule appears in a written advertisement, it shall be clearly legible to a reasonable borrower.
E Paragraphs A to D of this rule shall not apply to advertising done on pens, pencils, pocket calendars, balloons, coffee mugs, and similar promotional items. F Website advertising shall comply with paragraphs A to D of this rule by placing the required information on every viewable web page of the website.
In the alternative, maintaining a hyperlink on every viewable web page which links directly to a web page that contains the required information will satisfy the requirements of paragraphs A to D of this rule. G A registrant shall keep its website advertising current. A registrant shall update or have updated its website advertising no later than thirty calendar days after any information becomes outdated or expired.
H It is a violation for a registrant or licensee to place or cause to be placed any advertisement that contains any material misrepresentation regarding any term of a residential mortgage loan, including, but not limited to:. I A violation of 12 C. J Licensees employed by or associated with qualified exempt entities shall not place or cause to be placed, an advertisement that fails to comply with this rule.
K Written or oral statements that are purely informational and not designed to effect or create interest in purchasing the services of a registrant or licensee are not subject to this rule. A A registrant shall grant sufficient authority to its operations manager to carry out the duty of ensuring that the daily operations and management of the registrant's business complies with all state and federal laws, rules, and regulations applicable to the transaction of mortgage broker business. B Only one individual shall be designated as operations manager regardless of the number of registered office locations or employees.
C No individual shall act as an operations manager without being approved by the superintendent. An individual may be designated to act as an operations manager subject to the superintendent's approval. The registrant shall submit a completed "Application to change Mortgage Broker Operations Manager" form to the superintendent within ten business days of the designation.
D To qualify for approval as an operations manager, the superintendent shall find that the individual possesses at least three years of experience in the mortgage and lending field that complies with paragraph F of this rule. E For purposes of paragraph D of this rule and division A 4 of section The experience requirement may be verified by the division directly with the employer and tax authorities. F For purposes of paragraph D of this rule and division A 4 of section The division counts each month toward the three year requirement.
A fractional month of experience, at least twenty days long, qualifies as a full month. The experience may have been gained by directly soliciting, processing, placing and negotiating residential mortgage loans for or as a mortgage broker, or with a financial institution, mortgage lending institution, or other lending institution. The individual should have had direct contact and interaction with borrowers during all phases of making or brokering residential mortgage loans, and not compartmentalized experience in one phase of the process.
Experience in all phases of processing, underwriting and closing or operations management is acceptable. Other experience related specifically to the business of residential mortgage lending may qualify, but will not include the following types of employment:. G Any individual who wishes to present experience or education which is not in accord with paragraphs E and F of this rule may petition the superintendent to consider alternative education or experience which the individual reasonably believes would satisfy the experience requirement.
Such petition shall include documentation of the experience at issue and a detailed explanation of its relationship to residential mortgage lending activities. Brokering commercial real estate loans can be a lucrative business. While some states do not require a license to be a commercial loan originator or open a firm, others require licensing in similar fields.
Among states that require licensing, some allow originators to use standard real estate or mortgage broker licenses to do business financial commercial properties. According to the National Association of Mortgage Brokers, commercial properties are buildings not designated as single, residential dwellings.
Proposals for Comment. Release Notes. State Licensing Requirements. Common Requirements. Criminal Background Check. Credit Report. Approved Topics. State Education Notices. Functional Specification. Course Resources. Rules of Conduct for Students.
Provider Working Group. Late CE Approval. Comments or Questions. Surety Company. Surety Bond Producer. Quick Guides - Company. Quick Guides - Individual. Report Samples. Training Workshops. Annual Renewal. Advance Change Notice. ESB for Licenses. Financial Statements.
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