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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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