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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 30th
of each year. In order to renew the license, mortgage
brokers must apply for renewal on or before May 31st
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
31st 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 1st 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. |
