Frequently Asked Questions

Answers

1.  How do I apply for a mortgage broker's license?

Download and fill out the Application for Mortgage Broker License, which includes a checklist and general information.  The applicant must provide all applicable items on the checklist, including the non-refundable $1,500 application fee. 

Each person who owns 25% or more of the voting stock of the company and each person who has the power to direct the management and policy of the company (such as an officer or director) must complete a Personal History Record, a Personal Financial Questionnaire, a Child Support Statement and provide two completed, signed fingerprint cards. Applicants may be fingerprinted at most law enforcement agencies, such as the local police department.  All owners of the licensed entity who will conduct residential mortgage activity in Nevada on behalf of the licensed entity or directly supervise persons conducting residential mortgage activity, such as a qualified employee, must obtain and maintain a mortgage agent license and provide evidence of completion of 30 hours of certified courses of pre-licensing education and a score card evidencing passing the state examination administered by PSI.

Applicants for a mortgage broker license must designate a natural person, who meets the "prescribed standards", to serve as the qualified employee (QE) for the office. The QE must complete the QE Designation Form, Personal History Record, Child Support Statement, provide two signed fingerprint cards, and proof of two years of mortgage business experience in the last 5 years.  Proof may consist of W-2 forms, 1099 forms, and letters from prior employers detailing the individual’s duties with the company. The application must demonstrate that the proposed QE  is a legal resident of Nevada or reside in a border state within 35 miles of the border and within a commutable distance of the licensed office. The application must further demonstrate that the proposed QE will be present at the licensed office of the mortgage broker the majority of time the office is open. All QEs of the licensed entity who will supervise a mortgage agent who conducts mortgage activity must obtain and maintain a mortgage agent license and provide evidence of completion of 30 hours of certified courses of pre-licensing education and a score card evidencing passing the state examination administered by PSI.

Non-owner QEs must also hold a mortgage agent license.  The QE’s mortgage agent application should be submitted with the mortgage broker application.  Additionally, any owner/officer of the company or sole proprietor who conducts residential loan origination activities related to Nevada property, or supervises persons conducting these activities, must also hold a mortgage agent license. See FAQ No. 4 for more information on applying for a mortgage agent license.

There are minimum net worth requirements if the licensee maintains trust accounts pursuant to NRS 645B.175. Further, a surety bond in the amount of $50,000 for the principal office and $25,000 for each branch office, not to exceed $75,000, or a substitute form of security, such as a CD, is required for a mortgage broker's license.

Once the above documentation is submitted and reviewed, and the background investigations are completed, the Commissioner will issue an Additional Requirement Letter.  The initial review and background investigations take between 8-10 weeks to complete; the entire licensing process takes up to four months to complete.  Applicants should consider this when securing their office space.  Applicants may note “pending” for the office location when the application is initially submitted.

Some additional required items, such as the local business license and the Secretary of State filing, cannot be obtained without a memorandum of approval from the Division. The Division will provide the memoranda with the Additional Requirement Letter. The additional items include, but are not limited to, the following documents:

• A copy of an appropriate municipal business license for the company, if applicable, or an application for such business license evidencing it has been filed with the municipality;

• A copy of the State Business License (issued by the Nevada Department of Taxation pursuant to NRS 364A) or an exemption from such a license.  All businesses, Nevada corporations, foreign corporations and partnerships operating in Nevada are required to have a State Business License issued by the Department of Taxation. A sole proprietorship with one or more employees is also required to have the State Business License. Statute imposes a tax based on the number of employees working in Nevada or entering Nevada to work or conduct a business activity (NRS 364A);

• A copy of a recorded certificate of fictitious name if the applicant intends to conduct business under a DBA (Douglas County does not require fictitious name filings);

• A copy of the articles of incorporation, appropriate partnership, joint venture or limited liability company agreement (if applicable), and proof of compliance with Nevada corporate filing requirements as administered by the Nevada Secretary of State;

• The first year licensing fee of $1,000;

• Payment of the Attorney General and CPA assessments. (Amount to be determined.)

If the licensee is to be a subsidiary of a nationwide or parent organization, the applicant must disclose the percentage of ownership by the parent company. The last two fiscal year-end reports of the parent company must be provided.  These reports may be shareholder reports, CPA prepared or 10K reports, as available.

The applicant must describe the general plan and character of its business, including the anticipated source of loan funds, as well as the following:

• How the applicant will supervise the loan process and any associated mortgage agents (i.e., lending limits, policy manual, loan approval process, scope of loan review and audit procedures, frequency of head office review, if a branch, as well as the method of handling client monies);

• The applicant must explain how appraisals will be performed (see NAC 645B.270);

• The applicant must state whether he or she will handle any trust funds, or whether any such funds are to be handled by an independent third-party escrow company.

Additional branch licenses must be applied for separately. A branch license will not be issued until the principal Nevada office has been licensed for at least six months, and an examination completed resulting in a "satisfactory" rating.

All mortgage brokers licensed for less than one year must submit advertisements to the Commissioner for approval before they are used. All advertising by mortgage brokers must comply with NAC 645B.240.  Requests to approve television and/or radio advertisements must include a transcript; the videotape or tape recording will not be accepted. A hard copy of all proposed Internet web pages must be submitted for approval. All requests for approval of proposed advertisements must be submitted over the signature of the QE of the mortgage broker.  Proposed advertisements may be submitted by facsimile to (702) 486-0785, e-mailed to MLDTempReceptionist@mld.nv.gov or mailed to the Division's Las Vegas office.

Mortgage broker licensees are prohibited from acting as an escrow agent, or otherwise controlling funds which are the subject of completed construction loans (construction control accounts). (Attorney General's Opinion #89-6)
 

Multiple DBA's/Fictitious Names

Current regulations do not permit a mortgage broker to conduct business under more than one fictitious name, or "DBA;" however, the Division will permit the same company to obtain multiple licenses, each with its own DBA.  The Division will consider the corporate entity holding the licenses to be responsible for the conduct of each of its licensed offices and DBAs. 

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2.  How do I apply for a mortgage banker's license?

The application procedure for mortgage bankers is the same as that for mortgage brokers; however, only licensed mortgage bankers may license branch locations outside Nevada pursuant to NRS 645E.200.  To apply for mortgage banker license, download and complete the Application for Mortgage Banker License.

Currently, owners, qualified employees and loan officers of a mortgage banker are not required to meet the pre-licensing education-test requirements.  Additionally, mortgage bankers are required to maintain signage as prescribed in NAC 645E.231, which would limit the ability to have a home based business in most counties in Nevada. 

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3.  Must I establish and maintain a physical office location in Nevada in order to become licensed as a mortgage broker or banker?

All companies seeking a mortgage brokers or mortgage bankers license must maintain at least one office in this state.  Licenses must be obtained for all additional branch offices in this state that will engage in activity for which a license is required.  Mortgage Brokers must do business in this state from an office located in this state.  Mortgage Bankers must maintain their principal Nevada office in this state, but may conduct business from properly licensed branch offices outside the state.  See NRS 645E.200(5).

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4.  How do I apply for a mortgage agent's license?

Download and complete the Application for Mortgage Agent License, which includes a check list and general information. The applicant must provide all applicable items on the check list. Applicants must provide evidence of completion of 30 hours of certified courses of pre-licensing education and a score card evidencing passing the state examination administered by PSI.

Applicants may be fingerprinted at most law enforcement agencies, such as the local police department. The mortgage agent application fee is $185. The annual renewal fee is $170; however, the Division currently charges $100. The applicant’s background investigation must be completed prior to the issuance of a mortgage agent license. An applicant may not conduct any licensable activities prior to issuance of the license. The licensing process takes approximately 10-12 weeks to complete after submission of a complete application package to the Division.

Effective October 1, 2009, pursuant to Assembly Bill No. 523 of the 75th (2009) Legislative Session (“AB 523”), all mortgage agents are required to be W-2 employees of the mortgage broker or mortgage banker.

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5.  Who must obtain a license as a mortgage agent?

Under AB 523, a mortgage broker, mortgage banker, residential mortgage loan originator, qualified employee who wishes to engage in activities as a residential mortgage loan originator or to supervise a mortgage agent who engages in activities as a residential mortgage loan originator, and any person authorized to engage in activities as a residential mortgage loan originator on behalf of a privately insured institution or organization licensed under title 55 or 56 of NRS must obtain and maintain a license as a mortgage agent. The term does not include a person licensed as a mortgage broker or mortgage banker or a person who performs only clerical or ministerial tasks for a mortgage broker.

Pursuant to AB 523, an applicant is eligible to receive a license if the applicant:

(1) Has not been convicted of, or entered a plea of guilty or nolo contendere to, a felony in a domestic, foreign or military court within the 7 years immediately preceding the date of the application, or at any time if such felony involved an act of fraud, dishonesty or a breach of trust or money laundering;
 

(2) Has never had a license or registration as a mortgage agent, mortgage banker, mortgage broker or residential mortgage loan originator revoked in this State or any other jurisdiction or had a financial services license suspended or revoked within the immediately preceding 10 years;
 

(3) Has not made a false statement of material fact on his application;
 

(4) Has not violated any provision of Chapter 645B or Chapter 645E of NRS, a regulation adopted pursuant thereto or an order of the Commissioner; and
 

(5) Has demonstrated financial responsibility, character and general fitness so as to command the confidence of the community and warrant a determination that he will operate honestly, fairly and efficiently for the purposes of Chapter 645B or Chapter 645E of NRS.

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6.  What is required of a mortgage agent and a mortgage broker when a mortgage agent terminates his association or employment with the mortgage broker, changes brokers or renews his license?

Termination

Pursuant to NRS 645B.450(3), when a mortgage agent terminates his association or employment with a mortgage broker for any reason, including quitting, resigning or being fired, the mortgage broker must, within three business days of the termination, provide written notice to both the Division and the mortgage agent, at the agent’s last known address, using the prescribed Mortgage Agent Termination or Disassociation form. The form is available on the Division’s website, mld.nv.gov, under the Forms link, and may be faxed or mailed to the Division. Failure to comply with the provisions of NRS 645B.450 could subject the mortgage broker to administrative action and/or fines.

Changes of Brokers

Once a mortgage agent has terminated his association with one mortgage broker, he may associate with a new mortgage broker. It is the responsibility of both the mortgage agent and the new mortgage broker to ensure that the Division is in physical receipt of the completed Mortgage Agent Change of Broker form created by the Division (as executed by the new mortgage broker) and applicable $10 fee before the mortgage agent conducts mortgage activities with the new mortgage broker. The Division will accept a completed Mortgage Agent Change of Broker form and applicable $10 fee in advance of the Mortgage Agent Termination or Disassociation form.
 

License Renewal

Mortgage agents are required to renew their license annually. The annual renewal date is the month and day the license was initially issued. Renewals may be submitted up to 45 days prior to the annual renewal date. Individual mortgage agent renewal dates and histories may be verified on the Division’s website, mld.nv.gov, under Licensee Records. In order to renew his license, a mortgage agent must submit to the Division a completed Application for Renewal of Mortgage Agent License form and provide proof of completion of 10 hours of certified courses of continuing education (see Frequently Asked Question No. 7 below) during the 12 months immediately preceding the date on which the license expires, together with the $100 non-refundable renewal fee. Mortgage brokers should carefully monitor their agents’ compliance with this requirement. If a mortgage agent fails to timely renew his license, his license will be cancelled and he must immediately cease conducting mortgage activities. Agents may make application to reinstate their license up 6 months after their expiration date. To reinstate a license, an agent must comply with the renewal requirements listed above and pay an additional $75 reinstatement fee. After the 6-month period, the mortgage agent must submit a new Application for Mortgage Agent License. The Division will consider any mortgage activity conducted by a mortgage agent following his failure to timely renew to be a violation of statute and may subject both the mortgage broker and the mortgage agent to administrative action and/or fines.

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7.  What are the educational requirements for  mortgage brokers and mortgage agents to obtain and renew their licenses?

Mortgage broker licenses expire annually on June 30. Renewals must be submitted to the Division annually by May 31. NRS 645B.051 requires the broker to provide satisfactory proof at renewal that the licensee attended at least 10 hours of certified courses of continuing education during the 12 months immediately preceding the date on which the license expires. For purposes of NRS 645B.051 the term “licensee” includes the qualified employee and/or any owner or officer conducting business on behalf of the licensee in Nevada. In addition, if the licensed entity was issued a mortgage broker license after September 30, 2005, then by June 1, 2009, all owners of the licensed entity who conduct mortgage lending activity in Nevada on behalf of the licensed entity must provide evidence of completion of 30 hours of certified courses of pre-licensing education or, alternatively, a score card evidencing passing the state examination administered by PSI. If a qualified employee was approved as a qualified employee after September 30, 2005, then by June 1, 2009, the qualified employee must provide evidence of completion of 30 hours of certified courses of pre-licensing education or, alternatively, a score card evidencing passing the state examination administered by PSI.

A mortgage agent license issued pursuant to NRS 645B.410 expires 1 year after the date the license is issued. Individual agent renewal dates may be verified in the mortgage agent search section of our website. NRS 645B.430 requires the agent to provide satisfactory proof at renewal that the agent attended at least 10 hours of certified courses of continuing education during the 12 months immediately preceding the date on which the license expires. In addition, if the agent was issued a mortgage agent license after September 30, 2004, then by June 1, 2009, the agent must provide evidence of completion of 30 hours of certified courses of pre-licensing education or, alternatively, a score card evidencing passing the state examination administered by PSI.

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8.  How do I file a complaint against a mortgage broker, mortgage banker, mortgage agent, escrow agency, escrow agent, loan modification consultant, foreclosure consultant or covered service provider?

The Division of Mortgage Lending will accept and investigate all complaints filed against any company or individual under our regulatory authority. Refer to our licensing records for a complete list of companies and individuals under our jurisdiction.  Complaints must be received in writing and submitted directly via this form and mailed to the address listed on our home page.  Copies of documentation in support of your complaint must be included with the submission. If no documentation is provided, the complaint will not be pursued. The Division will correspond with all complainants upon completion of the investigation.

Refer to question ten for assistance in determine the appropriate regulatory agency for companies not directly regulated by the Division.

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9.  Does Nevada have a usury law?

Nevada does not have a usury law.  There are limits on interest and fees that can be charged in a pawn transaction; however, NRS 99.050 requires only that the rate and terms of a loan must be specified in writing and agreed to by all parties.  There are no Nevada statutory limits on any fees that may be charged in a mortgage transaction so long as all parties have agreed to those fees in writing.  Applicable mortgage loans must comply with all federal laws including, but not limited to, The Real Estate Settlement Act and Regulation Z, Truth in Lending.

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10.  What other regulatory agencies govern the lending business?

Consumers having mortgage questions or complaints regarding companies not regulated by the Mortgage Lending Division may contact the following appropriate agencies for assistance:

Nevada Financial Institutions Division
(Regulates State chartered banks, credit unions, thrifts and check cashing companies)
1179 Fairview Dr. Ste 201
Carson City, Nevada 89701
Phone: (775) 687-5522
Fax: (775) 687-5523

Nevada Financial Institutions Division
2785 E. Desert Inn Rd., Ste 180
Las Vegas, Nevada 89121
Phone: (702) 486-4120
Fax: (702) 486-4563
e-mail http://fid.state.nv.us/contact.htm
Internet http://fid.state.nv.us.

Office of the Comptroller of the Currency
(Regulates national banks)

Customer Assistance Group
1301 McKinney Street
Suite 3450
Houston, TX 77010
1-800-613-6743
E-mail: Customer.Assistance@occ.treas.gov
Internet: http://www.occ.treas.gov
 

The Office of Thrift Supervision
(Regulates federal savings and loans (S&Ls) and federally chartered savings banks ("FSB's"))

Office of Consumer Programs
1700 G Street, NW
Washington, DC 20552
(202) 906-6237
1-800-842-6929
E-mail: consumer.complaint@ots.treas.gov
Internet: http://www.ots.treas.gov

The Federal Reserve Board
(Regulates state banks that are members of the Federal Reserve System)

Division of Consumer and Community Affairs
Federal Reserve Board
Washington, DC 20551
(202) 452-3946
Internet: http://www.federalreserve.gov

The Federal Deposit Insurance Corporation
(Regulates Federally insured state banks that are not members of the Federal Reserve System)

Division of Compliance and Consumer Affairs
550 17th Street, NW
Washington, DC 20429
(202) 942-3100
1-800-934-FDIC
Email: consumer@fdic.gov
Internet: http://www.fdic.gov

The National Credit Union Administration
(Regulates federal credit unions)

1775 Duke Street
Alexandria, VA 22314-3428
(703) 518-6300
Internet: http://www.ncua.gov
 

Federal Trade Commission
(Regulates other lenders)

Consumer Response Center
6th and Pennsylvania Avenue, N.W.
Washington, DC 20580
(202) 326-2222
Email: consumerline@ftc.gov
Internet: http://www.ftc.gov

Department of Housing and Urban Development (HUD)
(Enforces Fair Housing Act and RESPA)

Office of Fair Housing and Equal Opportunity
451 Seventh Street, S.W., Room 5100
Washington, DC 20410
(202) 708-4252
1-800-669-9777
Internet: http://www.hud.gov
http://www.hud.gov/complaints/index.cfm

 

Most mortgage transactions must comply with federal as well as state laws and regulations. Two federal laws that apply in many such transactions are the Real Estate Settlement Procedures Act and Federal Regulation Z Truth in Lending regulation.

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11.  May I make a "single" or "occasional" loan in Nevada without first obtaining a license or exemption certificate?

Due to the passage of AB375 in the 2007 Legislative Session, effective 10/1/07 the provisions of NRS 80.015 are amended to limit the unsolicited origination of mortgage loans in Nevada by unlicensed/non-exempt companies to commercial properties only. After 10/1/07 all Nevada 1 to 4 family residence mortgage loan originations will be subject to all applicable licensing or exemption requirements prescribed by law.

NRS 80.015 contains a list of activities that do not constitute “doing business” in this state including “[c]reating or acquiring indebtedness, mortgages and security interests in real or personal property.” NRS 80.015(1)(g). However, a person is considered doing business in Nevada and is subject to applicable licensing requirements pursuant to chapter 645A, 645B or 645E of NRS or title 55 or 56 of NRS if the person:

“(a) Maintains an office in this state for the transaction of business;

(b) Solicits or accepts deposits in the State, except pursuant to the provisions of chapter 666 or 666A of NRS;

((c) & (d) added pursuant to AB 375, effective 10-1-07)

(c) Solicits business for the activities of a mortgage broker as defined by NRS 645B.0127 or the activities of a mortgage banker as defined by NRS 645E.100; or

(d) Arranges a mortgage loan secured by real property which is not commercial property as defined by NRS 645E.040"

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12.  How do I obtain a Category 1 Exemption?

The “Category 1” exemption is set forth in NRS 645B.015(1), which provides in part that the provisions of the mortgage broker law do not apply to:

1. Any person doing business under the laws of this State, any other state or the United States relating to banks, savings banks, trust companies, savings and loan associations, consumer finance companies, industrial loan companies, credit unions, thrift companies or insurance companies, including, without limitation, a subsidiary or a holding company of such a bank, company, association or union.

A similar provision exists with respect to mortgage bankers. See NRS 645E.150(1).

Businesses attempting to qualify for this exemption are required to apply for and receive an exemption certificate pursuant to NRS 645B.016 (645E.160 for mortgage bankers) by submitting a written application, the fee required by NRS 645B.050 (645E.280 for mortgage bankers), and satisfactory proof that the business meets the requirements for the exemption.

Businesses specifically covered by a Federal preemption to applicable state licensing requirements are not required to apply for an exemption certificate and may conduct mortgage business in Nevada to the extent covered by the preemption.

The Mortgage Lending Division requires as satisfactory proof of qualification for a Category 1 exemption (1) Written evidence that the business is of a type described in the exemption, and (2) A letter from the government entity which regulates the business confirming that its business in this state will be subject to its jurisdiction and it will investigate complaints against the entity filed by Nevada citizens.

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13.  Are Internet-based mortgage brokers/bankers required to be licensed pursuant to NRS645B or NRS645E to transact business in Nevada?

NRS 645B and 645E require a license or exemption certificate when conducting or soliciting mortgage business within or into Nevada. The Division views applications obtained through the Internet as solicited transactions. Only licensed brokers/bankers may accept application requests by Nevada residents obtained via an Internet site. The Division considers unlicensed companies conducting mortgage business via Internet sites as violations of NRS 645B.690 and transacting such business will subject companies to administrative sanctions and/or fines not to exceed $10,000 per violation.

The Division agrees that using the Internet as a form of solicitation that may be accessed by Nevada residents does not in itself require companies to obtain a license. However, pursuant to NRS 645B and 645E, holding yourself out as being able to conduct mortgage business in Nevada is subject to licensing requirements.

Companies wishing to accept mortgage loan submissions from Nevada residents via the Internet must first comply with all applicable licensing requirements pursuant to NRS 645B and 645E. Please refer to Frequently Asked Question #1 for information on obtaining a license. If you have any additional questions, please contact the licensing staff in Carson City at (775) 684-7060.

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14. How do I obtain authorization to file as a corporation, limited liability company or foreign corporation with the State of Nevada Secretary of State’s office using the word “mortgage” in the name or if the business purpose relates to the mortgage business?

NRS 78.045 provides in relevant part: 

2. The Secretary of State shall not accept for filing any articles of incorporation or any certificate of amendment of articles of incorporation of any corporation formed pursuant to the provisions of this chapter if it appears from the articles or the certificate of amendment that the business to be carried on by the corporation is subject to supervision by the Commissioner of Insurance or by the Commissioner of Financial Institutions, unless the articles or certificate of amendment is approved by the Commissioner who will supervise the business of the corporation.

Before accepting a filing for authority to do business, the Secretary of State requires an approval letter from the Division of Mortgage Lending if the filing includes the word “financial” or “mortgage” or the business purpose is related to mortgages. Companies must request the approval letter in writing to the Division specifying the purpose of the filing, the name, address, contact name and phone number for the company wishing to do business in Nevada. If the company plans to conduct mortgage activity in Nevada pursuant to NRS 645B.0127 or NRS 645E.100, the Division will not provide an approval until the applicable license application has been submitted to the Division and the company found suitable to hold a license. Once the required documentation is submitted and reviewed, the Commissioner will issue a conditional approval letter. This letter may then be provided to the Secretary of State to authorize the filing. Requests may be sent or emailed to the Division of Mortgage Lending, attention Nancy Corbin at 7220 Bermuda Road, Suite A, Las Vegas NV 89119, faxed to (702) 486-0785 or e-mailed to njcorbin@mld.nv.gov.   For information on reserving a name from the Secretary of State, Commercials Filings Division please visit the http://sos.state.nv.us.

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15.  Does conducting institutional wholesale mortgage business in Nevada trigger licensing requirements with the Mortgage Lending Division?

Pursuant to NAC 645B.017 & NAC 645E.270, a company that only provides a funding source for a loan originated by a licensed broker or a company exempt from licensing does not conduct licensable activity. Additionally, institutions that purchase closed loans on the secondary market are not subject to licensure. Such activity may, however, trigger other licensing or registration requirements such as filing requirements with the Secretary of State, State Taxation or local business licensing authorities. In order to respond to consumer complaints against wholesale lenders, the Division requests wholesale lenders doing business in Nevada to provide us with the name, address and telephone number of a contact person to whom such complaints may be referred.

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16.  After a mortgage agent who holds an active mortgage agent license terminates his affiliation with a mortgage broker, may he conduct mortgage agent activities with a new mortgage broker before the Division is in physical receipt of his completed Change of Broker form (as signed by the new mortgage broker) and applicable fee?

No. It is the responsibility of both the mortgage agent and the new mortgage broker to ensure that the Division is in physical receipt of the completed Change of Broker form and applicable fee before the mortgage agent conducts mortgage agent activities with a new mortgage broker. If the mortgage agent conducts mortgage agent activities before the Division is in physical receipt of the completed Change of Broker form and applicable fee, the activities are citable on an examination and may result in the imposition of administrative fine(s). An agent’s broker affiliation and history may be viewed on the Division’s website, mld.nv.gov, under the Licensee Records link.

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17.  I’ve heard about so called “red flag rules”. What are they and do I need to comply with them?

Answer: The "red flags rule" was the name given to the written Identity Theft Prevention Program which was mandated last year by the Federal Trade Commission and the various federal banking agencies. These rules require, in part, that all mortgage brokers, mortgage bankers and escrow agencies design and implement ID theft prevention programs that are appropriate to their size and complexity, as well as the nature of their operations. The implementation date has now been extended to June 1, 2010. For licensees who have not yet adopted ID theft prevention programs, the guidelines issued by the FTC should be helpful in assisting licensees in designing them. A supplement to the guidelines identifies 26 possible red flags. These red flags are not a checklist, but rather, are examples that licensees may want to use as a starting point. As part of the Division's examination process, the licensee's "red flag rules" must be made available for review.

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18.  Intentionally omitted

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 19. Is an employee of, or an independent contractor for, an independent licensee who undertakes a ministerial or clerical act on behalf of the licensee required to have an agent’s license under chapter 645F?

Answer: No. However, the Division is aware of several instances wherein licensees are claiming that the activities of their employees or independent contractors are ministerial or clerical in nature and do not rise to the level of activities that fall within the definition of an agent under the licensee’s respective licensing law. Licensees use the term ‘processors’ or something similar to denote their job title.

The Division believes that a ministerial or clerical act is an act that requires no discretion or exercise of judgment, sometimes called a 'mechanical' act. The employee’s or independent contractor’s job title does not define whether or not an act is ministerial or clerical in nature.

Factors the Division will consider as to whether or not an act is a ministerial or clerical act include:

• Providing secretarial services;
• Answering the telephone;
• Typing a letter;
• Filing documents; and
• Entering information into a database.

Independent licensees should note the following definition contained in Section 1.5 of Assembly Bill 523 of the 2009 Legislative Session, to read:

“Clerical or ministerial tasks” means communication with a person to obtain, and the receipt, collection and distribution of, information necessary for the processing or underwriting of a mortgage loan.

The above factors are not inclusive.

Any act that counsels, provides or offers advice, explanation or instruction to any person, or that provides an opinion, is not a ministerial or clerical act. Any act of negotiation, discussion of terms or possible courses of action or remedies is also not a ministerial or clerical act. These factors, too, are not inclusive.

Finally, the Division calls attention to the S.A.F.E. Mortgage Licensing Act of 2008: “An independent contractor may not engage in residential mortgage loan origination activities as a
loan processor or underwriter unless such independent contractor is a State-licensed loan originator.” See Section 1504(b)(1) and (2).

The Division will utilize the above in determining if a licensee’s employees or independent contractors are conducting unlicensed activity. And, since in any given situation a ministerial or clerical act may suddenly become a non-ministerial or non-clerical act, the Division encourages all licensees to obtain appropriate agent or associate licenses for its employees and independent contractors, especially those who deal with consumers or lenders. Independent contractor loan processors or underwriters should apply for a license with the Division.

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20. When are applicants and licensees required to pay the annual assessments for certified public accountant (“CPA”) and Attorney General (“AG”) costs incurred by the Division?

New Applicants:

New mortgage brokers, mortgage bankers, escrow agencies and independent loan modification consultant, foreclosure consultant or covered service providers licensee applicants, both principal offices and additional branches, are required to pay the annual AG and CPA assessments prior to issuance of a license and following completion of the background investigation.

 New mortgage agent and associated loan modification consultant, foreclosure consultant or covered service providers are required to pay the annual AG assessment prior to issuance of a license and following completion of the background investigation.  By law, mortgage agents and associated licensees are not required to pay the CPA assessment.

 Existing Licensees:

Annually, the Division will mail invoices to all licensed mortgage brokers, mortgage bankers, escrow agencies and independent loan modification, foreclosure consultant and covered service provider licensees (principal offices and branches) for the annual AG and CPA assessments.  Historically, the assessment invoices have been mailed in the fall.

Licensed mortgage agents and associated loan modification consultant, foreclosure consultant and covered service providers are required to pay the annual AG assessment at the time of submission of their annual renewal application.

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21.  Can a company license be inactivated and what are the requirements to inactivate and then to reactivate the license?

A mortgage broker, mortgage banker, and independent covered service provider, foreclosure consultant and loan modification consultant may, at the sole discretion and approval of the Commissioner, inactivate its license, one time only, for a period not to exceed six months or until the expiration date of the license, whichever occurs first. (Mortgage brokers and mortgage bankers who have balances in trust and/or escrow accounts and escrow agencies may not inactivate their licenses.)  Additionally, inactivation does not impact the Division’s authority to conduct examinations or investigations pursuant to law, nor does it remove a licensee’s responsibility to pay assessed Attorney General or CPA assessments, or any other fees and fines due the Division.

To inactivate a license, the Division requires a licensee to complete a Request for Temporary Inactivation of License, which may be found on the Division’s Web site under the forms link.  Along with the inactivation form, a licensee must submit its original license along with termination statements and the original licenses of all associated mortgage agents or associated licensees.

The Division will allow a licensee who is inactivating to continue to process loans which were originated prior to the inactivation and have a lender commitment. However, once a licensee’s request for inactivation is approved, the status of the licensee will be changed to “closed” and the company will no longer appear on the Division’s Web site. Unless during the fiscal year a licensee maintained client trust accounts described in NRS 645B.175, NRS 645E.430 or section 3.3 of Assembly Bill No. 152 of the 75th Session of the Nevada Legislature,the licensee will not be required, during the inactivation period, to submit an annual financial statement. No deficiency letter will be issued to the licensee in respect of the120-day filing requirement during the inactivation period. However, prior to reactivation, a licensee must submit to the Division, along with its reactivation request, its financial statements for the most recent fiscal year end which conform in all other respects to the requirements of law, unless previously provided, and deposit the requisite surety bond or substitute form of security with the Division if not currently in place.

To reactivate a license during the 6-month period, an inactive licensee must submit a letter to the Division’s Carson City office requesting approval to reactivate its license.  There is a $200 reactivation fee which must be enclosed with the request. In order for a license to be reactivated, the licensee must have had an examination in the prior 12 months, if it received a satisfactory rating at its prior examination, or within 6 months if it received a “3,” “4” or “5” rating.  Furthermore, all fees, assessments and fines owed must be paid, applicable financial statements must be submitted and if the inactive period crossed a renewal period, all standard renewal requirements must be met, such as fees, forms and applicable continuing education requirements.   Additionally, the licensee must submit, as applicable, either Intent to Employ forms for mortgage agents who were previously with the licensee and have not moved to another licensee, or Change of Broker forms and $10 for each mortgage agent who had moved to another licensee and is now coming back.

If an inactive licensee fails to complete all requirements to reactivate its license within the 6-month period, the license will be deemed permanently closed. Persons wishing to conduct business will then be required to submit a new license application, including fees, and wait for the completion of the licensing process before commencing any business.

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