Examination Overview

The Mortgage Lending Act (“MLA” as codified in NCGS Chapter 53, Article 19A) allows the NC Commissioner of Banks (“NCCOB”) to conduct routine examinations of the books and records of any licensee in order to determine the compliance with the Mortgage Lending Act and any rules adopted pursuant to the authority of NCGS 53-243.04. 

Compliance with Federals Laws and Regulations will also be examined as authorized by the North Carolina Administrative Code (“NCAC”).  04 NCAC 03M.501 (c).

Licensees should develop internal procedures concerning state examinations and make sure all staff members are aware of what must be done to facilitate the examination process. 

North Carolina law requires that licensees afford full access to all premises, books, records and information that the examiner deems necessary.  Attempts to prevent the examiner from conducting the examination may lead to a monetary fine, license suspension or revocation.

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Examination Process

Notification

Normally, licensees will receive an Examination Notification Letter.  The examination will commence approximately four to six weeks after receiving the notification.

**EXAMINATIONS ARE NOT REQUIRED TO BE SCHEDULED IN ADVANCE.**

Accompanying the notification will be an Uniform Manager's Questionnaire that includes a North Carolina Examination Supplement (Appendix A), and a North Carolina Examination Additional Information request (Appendix B).

Uniform Manager's Questionnaire

The Uniform Manager's Questionnaire is to be completed by the Qualified Individual; responding to questions concerning the licensees' mortgage lending business.  A completed Uniform Manager's Questionnaire must be returned to out office within 15 days of receipt of notification of examination.

North Carolina Examination Supplement (Appendix A)

The North Carolina Examination Supplement is to be completed by the Qualified Individual; responding to questions concerning the licensees' mortgage lending business.  A completed North Carolina Examination Supplement must be returned to our office along with the Uniform Manager's Questionnaire.

North Carolina Examination Additional Information Request (Appendix B)

The North Carolina Examination Additional Information Request lists the documentation to be reviewed during the examination.  The documentation should be compiled and ready for review when the examiner arrives.  Additional information may be requested during the examination.

 Scheduling

An examiner will contact the Licensee’s Qualified Individual to schedule an examination date.  

Examination Location

Most examinations are conducted where the examination documentation is stored.  Normally this is the Licensee’s main office.  

An Examination of a Licensee with corporate headquarters located out-of-state is conducted at a branch office located in North Carolina.  Such an examination may also be conducted at OCOB; the licensee would be required to deliver examination documentation to OCOB. 

An Examination of a Licensee with more than one branch office is conducted at a location chosen by the examiner.

Examination Report

The Licensee will receive an Examination Report approximately 30 days after the examination is completed.  Subject to examination findings, a response may be required from the Licensee. 

A Licensee can expect to receive one of the following letters with the Examination Report:

·        No Response Required

·        Recommendations Only

·        Response Required Within 20 Days

Frequency

Examinations of Mortgage Lenders and Brokers licensed by the state of North Carolina are conducted approximately every 36 months. 

Survey

Licensees will be asked to complete a post-examination survey.  The survey form will be mailed along with the Examination Report.   An online Post Mortgage Examination Survey form may be completed mailed to OCOB.