Overview

Introduction

The Mortgage Lending Division (MLD) is charged with the enforcement of regulations and licensing of Mortgage Bankers, Mortgage Brokers, and Escrow Agencies.  Additionally, certain individuals operating as Mortgage Agents or Escrow Agents within these licensed entities are themselves required to be licensed or subject to personal background investigations.  The MLD does not regulate the mortgage related business of banks, savings banks, trust companies, savings and loan associations, industrial loan companies, credit unions, thrift companies or insurance companies unless the business conducted in this state is not subject to supervision by the appropriate regulatory authority for their activity.  Financial Institutions Division (FID) regulates many of these entities.  Refer to FID’s web site for a list of companies under its jurisdiction and for listings of banks operating in Nevada under Federal or other state jurisdiction.

MLD conducts background investigations on entities and individuals having substantial control of a licensed company's activities.  The statutes set a 25% percentage ownership standard for filing requirements, but the Commissioner may determine that control is vested in an individual holding less than the standard percentage and a background investigation will be required.  Background investigations are also conducted on individuals applying for a mortgage agent's license.

Our Frequently Asked Questions page addresses the most typical questions regarding licensing requirements and other issues.  Individuals may also contact the Division either through the E-mail link or through the addresses or phone numbers listed on our home page.  Every person seeking to engage in an activity that is possibly subject to licensing by MLD should carefully review the applicable Nevada Revised Statutes (NRS) and the Nevada Administrative Code (NAC).  Most libraries within Nevada have available copies of both Statutes and Regulations.  These statutes and regulations are also found by clicking on the menu above or here.  Individual copies of the applicable NRS and NAC may also be obtained by sending a request and the appropriate fee listed on the fee schedule to the MLD. 

Various statutes and regulations prohibit using within a company's name, or advertising the words Bank, Banking, Banker (or foreign language equivalent), Trust, Credit Union, or Deposit.  Additionally, the Secretary of State, Counties, Cities and Municipalities have been requested not to permit incorporation authorization, issuance of business licenses or fictitious business names, where the name of the company or the type of activities the company will engage in, indicates that it may be subject to MLD.  Upon the submission and approval of an application for licensing, MLD will provide a letter enabling the applicant to file the company’s name with these regulatory authorities to finish the application process.

GENERAL BUSINESS PLAN (NRS 645B.020 & NRS 645E.200)

Applicants for a banker or broker license are required to submit a general business plan and character of the business. In preparing the business plan should include how applications are taken, processed and submitted to the lender. Include an explanation of how the loan files are reviewed, flow of the loan file, checks and balances in place, who receives the file before submission to lender and who has final review of the file. The business plan should also include a statement on policies and procedures for the training and supervision of any mortgage agents and staff and any system in place for compliance.

MORTGAGE BROKERS (NRS & NAC 645B) 

Anyone who holds himself out as being able to make or arrange loans secured by real estate, or as being able to buy or sell notes secured by real estate in, into or from Nevada, and the activity includes “brokering” non-commercial loans to third party lenders, must have a mortgage broker license, or be specifically exempted from that license.  Mortgage Broker licenses expire on June 30^th of each year.  In order to renew the license, mortgage brokers must apply for renewal on or before May 31^st  of each year. Companies who exclusively lend their own capital or broker only commercials loans and do not maintain trust accounts may qualify to hold a mortgage banker license.  A licensed real estate broker or agent does not automatically qualify to engage in mortgage activities.  All licensed mortgage brokers must have a "qualified employee" to oversee the day-to-day operations of the company. That individual must have at least 2 years of prior verifiable mortgage lending experience, and undergo a background investigation.  The qualified employees must provide the division with the broker’s annual license renewal verification that they have completed 10 hours of continuing education. Employees of the mortgage broker who conduct mortgage activities must be licensed under the Overview section titled Mortgage Agents, and must conduct their activities through the Nevada physical licensed location of the mortgage broker.  An out of state mortgage broker location cannot be licensed, or do business in this state.

MORTGAGE AGENTS (NRS 645B & NAC 645B)

Any person, other than an owner and the qualified employee of the licensed mortgage broker, who acts as a mortgage agent must be licensed with the division.  Mortgage agents may only be associated with one mortgage broker at one time.  The division must be notified and approve any changes in employment if an agent terminates with a broker, regardless if they move between brokers or cease working as an agent.  They may not work for a mortgage banker at the same time as they are employed with the mortgage broker.  Mortgage Agent licenses must be renewed annually.  Each mortgage agent’s license renewal date is set on the date of the agent’s initial submission for approval with the division.  All mortgage agents conducting loan origination business in Nevada must be located in Nevada.  Consideration on a case-by-case basis may be given to agents residing out of state.

MORTGAGE BANKERS (NRS 645E and NAC 645E)

A mortgage banker is anyone who limits his mortgage activities to only making loans or selling notes, secured by real property using his own money buying; or only brokers "commercial mortgage loans" to "institutional investors" and does not maintain client trust accounts.  This license is more restrictive than a mortgage broker license.  Mortgage banker licenses must be renewed on or before December 31^st of each year. A mortgage company must have a "qualified employee" to oversee the day-to-day operations of the company.  That individual must have at least 2 years of prior verifiable mortgage lending experience and undergo a background investigation.  Employees of the mortgage company do not need to be separately licensed, but must conduct all their activities through the physical licensed location of the mortgage company.  An out of Nevada mortgage company location may be licensed so long as the mortgage banker maintains at least one office in Nevada.

EXEMPT MORTGAGE BROKERS (NRS 645B.015)

The 2003 legislative session resulted in the passage of AB 490, which effectively removed the language allowing many of the previously exempt mortgage brokers from operating without a mortgage broker license. Although ten provisions for exemption (NRS 645B.015) existed prior to the passage of AB490, the exemption 6, applicable to mortgage brokers approved as Sellers & Servicers with FNMA, HUD & VA was removed.  The exemption for these companies expires on December 31, 2003.  Companies in this situation should evaluate their need for a mortgage broker's or banker's license and act accordingly.  All mortgage broker offices and mortgage agents conducting loan origination business in Nevada must be located in Nevada. 

MORTGAGE COMPANY EXEMPTION (NRS 645E.150) 

The 2003 legislative session removed language from NRS 645E.150 (6), which had previously allowed mortgage bankers approved as Sellers & Servicers with FNMA, HUD & VA to operate with only an exemption certificate.  The exemption for companies operating under section 6 of NRS 645E.150 expire on December 31, 2003.  Companies in this situation should evaluate their need for a mortgage broker's or banker's license and act accordingly.  Companies who previously held a mortgage company exemption, but now broker any non-commercial loans to other lenders must obtain a mortgage brokers license.  Refer to NRS 645E.150 to review the remaining exempt provisions.

ESCROW AGENCIES (NRS & NAC 645A)

MLD licenses and regulates certain escrow agency activity in the state of Nevada. Escrow activity includes facilitating a transaction for the purpose of affecting the sale, transfer, encumbering or leasing of real or personal property from one person to another person.  Escrow activity also includes third party loan servicing.  Some escrow activity is permissible without an escrow license and/or is regulated by another agency. The Nevada Division of Insurance licenses and regulates title insurers and title companies. Licensees or principals may not hold an active real estate license.   A surety bond must be deposited with Commissioner.  The average monthly balance in the agency’s trust account determines the amount of the bond.  The bond ranges from a minimum of $20,000 to $250,000.  Refer to NRS 645A.041 for specific bonding requirements. Escrow agencies must maintain a physical office in Nevada.  Every license issued pursuant to the provisions of NRS 645A expires on July 1 of each year if it is not renewed.

ESCROW AGENTS (NRS & NAC 645A)

NRS 645A defines an escrow agent as any person engaged in the business of administering escrows for compensation.  Individuals conducting escrow activity within an escrow agency and are authorized to sign for the agency in the closing of escrows or sign the remittance of payments for serviced accounts must be licensed as an escrow agent. Individuals may not serve as an agent for more than one agency.  At the time of filing an application for a license as an escrow agent, the applicant shall file with the commissioner proof that the applicant is named as a principal on the corporate surety bond deposited with the commissioner by the escrow agency with whom he is associated or employed.  An escrow agent license issued pursuant to the provisions of NRS 645A expires on July 1^st of each year if it is not renewed.

EXAMINATIONS

The Commissioner may conduct biennial examinations of a mortgage broker instead of annual examinations, if the mortgage broker received a rating in the last annual examination that meets a threshold determined by the Commissioner; has not had any adverse change in financial condition since the last annual examination, as shown by financial statements of the mortgage broker; has not had any complaints received by the Division that resulted in any administrative action by the Division; and does not maintain any trust accounts pursuant to NRS 645B.170 or 645B.175 or arrange loans funded by private investors.

The Commissioner may conduct biennial examinations of a mortgage banker instead of annual examinations, if the mortgage banker: received a rating in the last annual examination that meets a threshold determined by the Commissioner; has not had any adverse change in financial condition since the last annual examination, as shown by financial statements of the mortgage banker; and has not had any complaints received by the Division that resulted in any administrative action by the Division.

The Commissioner may order additional examinations or conduct investigations if deemed warranted. Licensees are charged an examination fee, at a rate set by regulation, for the number of hours examination staff worked to perform the examination. Charges include time spent at the licensed location by examination staff and off-site work for preparation and research. Refer to the fee schedule link on the MLD home page for applicable rates.

QUALIFIED EMPLOYEE (NAC 645B)

The Qualified Employee must provide proof of two year's mortgage business experience and managerial experience or applicable education.   Proof may consist of W-2 or 1099 forms.  Additionally, the applicant must provide a letter from the QE’s prior employers or other supporting documentation detailing the proposed QE’s duties and experiences related to their prior employment.

The Division will consider a QE to have the required experience if the experience includes taking loan applications from borrowers, determining the borrower’s ability to repay a mortgage loan, discussing loan options, quoting rates, and if applicable to the business, discussing investment options with investors placing monies into loans secured by real property.  A QE must have a general knowledge of State and Federal laws including RESPA (Real Estate Settlement Procedures Act) and TILA (Truth in Lending Act).  Additionally, the applicant must demonstrate that the QE has experience or appropriate educational training in bookkeeping and/or managing an office.

The QE must supervise the mortgage agents in the office for which a license is sought on a full time basis. The QE must reside in Nevada prior to issuance of the license and once the license is issued continue to reside in Nevada full time within a commutable distance from the licensed location.