Company Licenses
1. Q: Under NC SAFE, what types of licenses can a company obtain?
A: Under NC SAFE, NCCOB is authorized to issue the following licenses to companies:
a. A “Mortgage Broker” license, which authorizes a company to accept or offer to accept an application for residential mortgage loan from prospective borrowers, solicit or offer to solicit a residential mortgage loan from prospective borrowers, negotiate the terms or conditions of a residential mortgage loan, issue commitments, or interest rate guarantee agreements to prospective borrowers.[i]
b. A “Mortgage Servicer” license, which authorizes a company to in the business of receiving any scheduled period payments from a borrower pursuant to the terms of any residential mortgage loan, including escrow account payments, and making the payments of principal and interest and such other payments with respect to amounts received from borrowers.[ii]
c. A “Mortgage Lender” license, which authorizes a company to make or fund or offer to make or fund, or advance funds on residential mortgage loans. A Mortgage Lender may also engage in the mortgage business as would a Mortgage Broker or Mortgage Servicer.[iii]
2. Q: What requirements are there for a company to become licensed as a "Mortgage Lender" under NC SAFE?
(i) Have a Qualifying Individual, with at least three years of experience in the mortgage business, who operates the business under that person’s full charge, control and supervision.[i]
(ii) Obtain a surety bond in the required amount,[vi]
(iii) Have a principal office, with a designated Branch Manager, where you could meet with potential loan applicants and maintain the records regarding the applications taken and processed,
(iv) For any additional offices, the company would have to file through NMLS a form indicating the licensee’s designation of that office’s Branch Manager.
(v) Have a minimum Net Worth of at least $100,000, including evidence of liquidity of at least $1,000,000 or other evidence of funding capacity. Net Worth must be documented by an unqualified audited statement of financial condition.[vii]
(vi) Demonstrate to NCCOB that the Company, it’s qualifying individual and other controlling individuals have an acceptable business/employment history, credit history, are financially responsible, honest, ethical and sufficiently knowledgeable of lending practices to be able to act as a responsible Mortgage Lender.[viii]
3. Q: What requirements are there for a company to become licensed as a “Mortgage Broker” under NC SAFE?A: To become licensed as Mortgage Broker a company must submit a MU1 filing through the NMLS website. The instructions that accompany the filing provide most of the information you would need as to the requirements. Generally, the company would have to:
(i) Have a Qualifying Individual, with at least three years of experience in the mortgage business, who operates the business under that person’s full charge, control and supervision.
(ii) Obtain a surety bond in the required amount,
(iii) Have an office, with a designated Branch Manager, and physically located in North Carolina where you could meet with potential loan applicants and maintain the records regarding the applications taken and processed,
(v) Demonstrate to NCCOB that the Company, it’s qualifying individual and other controlling individuals have an acceptable business/employment history, credit history, are financially responsible, honest, ethical and sufficiently knowledgeable of lending practices to be able to act as a responsible Mortgage Broker.
4. Q: What requirements are there for a company to become licensed as a “Mortgage Servicer” under NC SAFE?A: Companies Licensed as Mortgage Lenders do not need to apply for a separate Mortgage Servicer’s license.To become licensed as Mortgage Servicer a company must submit a MU1 filing through the NMLS website. The instructions that accompany the filing provide most of the information you would need as to the requirements. Generally, the company would have to:
(i) Have a Qualifying Individual, with at least three years
of experience in the mortgage business, who operates
the business under that person’s full charge,
control and supervision.
(ii) Obtain a surety bond in the amount of ,
(iii) Have a principal office to maintain the records
regarding the residential mortgage loan servicing
documents or servicing contracts,
(iv) Have a minimum Net Worth of at least $100,000, not including monies in any escrow accounts held for others.
(v) Demonstrate to NCCOB that the Company, it’s qualifying individual and other controlling individuals have an acceptable business/employment history, credit history, are financially responsible, honest, ethical and sufficiently knowledgeable of lending practices to be able to act as a responsible Mortgage Servicer.
5. Q: I am a sole proprietor, licensed as a Mortgage Broker. Will I also need a Mortgage Loan Originator's license?A: Yes, you will. In order for a sole proprietor to be licensed as a Mortgage Broker, you must be a licensed Mortgage Loan Originator, who can meet the standards of a “Qualifying Individual” for your company. A Qualifying Individual must have at least three years of experience in the mortgage lending business.
6. Q: My company, a licensed Mortgage Broker, wishes to engage in Table Funding Mortgage Loans. How will the Act affect me?A: Table funding -- the assignment and sale of any loan closed by a Mortgage Broker licensee in its own name must be consummated within one business day. Any Mortgage Broker who is uncertain if the sale of loans will be accomplished within one business day should apply for a Mortgage Lender license.
7. Q: Does a company need to be licensed as a Mortgage Broker or Lender in order to broker the sale or purchase of already closed residential mortgage loans?A: Provided the sale is an arms-length, bona fide transaction and not merely a sham designed to avoid the application of the Act, then no license would be required. However any purchaser of a loan secured by owner-occupied residential property in North Carolina who is also intending to service that loan would need to be licensed as a mortgage servicer under the Mortgage Licensing Act or make arrangements for the loan to be serviced by a mortgage loan servicer authorized to service loans in North Carolina.
8. Q: If a company purchases a residential mortgage loan on the secondary market and intends to service the loan itself, must the company be licensed as a Mortgage Servicer?A: Yes. If a company intends to servicer residential mortgage loan, it would need to be licensed as a mortgage servicer under the Mortgage Licensing Act or make arrangements for the loan to be serviced by a mortgage loan servicer authorized to service loans in North Carolina.
9. Q: My company is licensed with the NCCOB. Can the NCCOB waive the company bond requirement?A: N.C. Gen. Stat. § 53-244.103.(d) The Commissioner has discretion to waive the bond requirement, upon receipt of a written request, if all of the following have been met;
1. The licensee has been licensed by the Commissioner for at least three years;
2. The licensee can demonstrate a net worth, according to the most recent audited financial statement, at least four times the required bond amount, and the licensee certifies that its net worth will be maintained at or above this level at all times and agrees to notify the Commissioner and to secure an appropriate bond in the event the net worth falls below this level;
3. The Commissioner believes the licensee has a satisfactory history of resolving complaints from consumers and responding to findings of investigations or examinations by the Commissioner; and
4. The Commissioner has no reason to believe the licensee will be unable to resolve complaints, respond to examination or investigative findings, or fulfill financial obligations under this Article.
10. Q: Is an individual required to become licensed as a mortgage lender, if the sale of his or her own residence is financed through “seller-financing” (i.e. a purchase money mortgage in which the seller is the beneficiary)?A: No, an individual who is selling the home which served as the selling individual’s residence is not required to obtain a license. See N.C. Gen. Stat. § 53-244.040(d)(3).
11. Q: Is there any exception from the requirement to become licensed as a mortgage lender for a “seller-financer”, even if the property had not served as the seller’s residence?A: Currently, a seller-financer may receive up to five residential mortgage loans in a calendar year without obtaining a license regardless of whether the property served as the seller’s residence. However, by July 31, 2010, the U.S. Department of Housing and Urban Development may determine that, unless selling a home that is not their own residence, a seller-financer is included in the definition of “loan originator” under the Housing and Economic Recovery Act. This would require such seller-financers to obtain a Mortgage Lender license. This requirement would not go into effect until July 31, 2010 at the earliest. See N.C. Gen. Stat. §53-244.040(d)(8).Individuals wishing to claim an exemption as seller-financer of no more than five mortgages in a calendar year, may do so by filing a form MLA-04 (available here) with NCCOB.Those wishing to take more than five seller-financer mortgages in a calendar year will need to register with NMLS as a mortgage loan originator and apply for licensure with NCCOB as an MLO and Mortgage Lender.
12. Q: Is a license as a Mortgage Servicer required for an Individual who acts as a mortgage servicer on a residential mortgage loan originated by an individual exempt as a “seller-financer”?A: If the individual acting as Mortgage Servicer is the original seller-financer of the residential mortgage loan, no license is required. However, a license is required for the individual acting as servicer was not the seller-financer of the residential mortgage loan, unless another exemption applies. See N.C. Gen. Stat. § 53-244.030(22).
13. Q: My company is licensed under the Act as a Mortgage Lender; can I also broker with this license? Must I have an office in North Carolina and/or a separate broker surety bond?A: A separate license as a Mortgage Broker will not be required if you are already licensed as a Mortgage Lender. However, you should be aware that when acting as a broker, you should comply with the provisions of the Act applicable to Mortgage Brokers, though you need not have an office in North Carolina or separate surety bond.