Licensing Overview

Effective July 31, 2009, the Mortgage Licensing Act (“MLA” as codified in NCGS Chapter 53, Article 19B) requires that any entity engaged in the business of making or brokering residential mortgage loans secured by North Carolina real estate be licensed by the NC Commissioner of Banks (“NCCOB”), unless exempt. 

Article 19B was written to conform to the requirements of Federal Law and bring North Carolina's mortgage lending laws into compliance with the Housing and Economic Recovery Act of 2008, P.L. 110-289, Title V, enacted by Congress and signed into law on July 30, 2008.

The General Assembly of North Carolina enacts:

SECTION 1. Article 19A of the General Statutes has been repealed. (Article 19A was originally enacted July 1, 2002).  

License types

License Type	Authorized Activities and Definitions
Mortgage Lender	To make or fund, or offer to make or fund, or advance funds on residential mortgage loans for compensation or gain, or in the expectation of compensation or gain.
Mortgage Broker	For compensation or gain, or in the expectation of compensation or gain, either directly or indirectly, to accept or offer to accept an application for a 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 with prospective borrowers, issue residential mortgage loan commitments or interest rate guarantee agreements to prospective borrowers, or engage in tablefunding of residential mortgage loans, whether any such acts are done through contact by telephone, by electronic means, by mail, or in person with the borrowers or prospective borrowers.
Exclusive  Mortgage Broker	An individual who acts as a  mortgage broker exclusively for a single mortgage lender or mortgage broker licensee or a single  exempt mortgage lender and who is licensed pursuant to G.S. 53-244.050(b)(3).
Branch Office	An office of a mortgage broker or mortgage lender that is separate and distinct from the mortgage broker's or lender's principal office and from which its employees engage in the mortgage business. A branch office shall not be located at an individual's home or residence.
Mortgage Servicer	To engage, whether for compensation or gain from another or on one's own behalf, in the business of receiving any scheduled periodic payments from a borrower pursuant to the terms of any residential mortgage loan, including amounts for escrow accounts, and making the payments of principal and interest and such other payments with respect to the amounts received from the borrower as may be required pursuant to the terms of the residential mortgage loan, the residential mortgage loan servicing documents, or servicing contract, or otherwise to meet the definition of the term "servicer" in 12 U.S.C.

*Table-funding: The closing of a loan in the name of a party shown as payee on the mortgage loan note, who, within one business day of closing, consummates sale and settlement of the note to another party.

Filing & Licensing Requirements

Filing Overview & Forms

Mortgage Lenders, Brokers, and Servicers should use the NMLS website to submit a MU1 filing. An appropriate Surety Bond (see below) must also be included and a Qualifying Individual who is also a NC Licensed Mortgage Loan Originator must be designated in the application.

Mortgage Loan Originators

Any individual who, for compensation, accepts or offers to accept residential mortgage applications must be licensed as a Mortgage Loan Originator and be an employee of a licensed Mortgage Lender or Broker unless covered by the law's exemption provisions. An individual must complete an approved NMLS Prelicensing course and pass the NMLS approved tests in order to be licensed as a Mortgage Loan Originator.

Branch Offices

All Branch Offices which make or broker loans secured by North Carolina real estate must be licensed in North Carolina and should be included in the licensing filing. Branch Offices opened or closed after initial licensing must be licensed by submitting a MU3 filing on the NMLS website, which should also be used to report other Branch Office activity such as closings or address corrections.

Designated Managers

Each Mortgage Lender or Broker licensee must designate a Qualifying Individual. If the Qualifying Individual is the individual who will be responsible for resolving consumer complaints regarding Mortgage Loan Originators of the company, then he/she must also be a licensed Mortgage Loan Originator. In addition, every Branch Office must have a designated Branch Manager who is also a licensed Mortgage Loan Originator. The Qualifying Individual and each Branch Manager must have at least three (3) years of residential mortgage lending experience. If the Qualifying Individual is a licensed Mortgage Loan Original, then the Qualifying Individual may serve as a Branch Manager for one Branch Office in addition to any duties at the principal office, but otherwise a Branch Manager may manage only one Branch Office. The Qualifying Individual will serve as the primary contact for licensing matters.

Qualifying Individuals are strongly encouraged to attend an introductory class given by the OCOB which focuses on newly licensed mortgage lenders/brokers. New licensees should plan on attending this 8 hour course held at our Raleigh office within 6 months from the date of licensure. Our agency believes that a sound foundation of knowledge in the beginning would be both educational and useful in helping prevent violations from occurring. The course will focus on the following areas: Licensing, Education, Examination, and Legal.

Surety Bonds

A licensee is required to have a  Lender Surety Bond or a Broker Surety Bond as detailed in N.C. General Statutes   § 53.244.103 (b) (1) (2). The bond amount is based upon the loan origination volume reported to our agency. Please see detailed  information on forms MLA02 and MLA03 as it applies to license type.

Filing Fees