Licensing Overview

Effective July 1, 2002, the Mortgage Lending Act (“MLA” as codified in NCGS Chapter 53, Article 19A) 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 exemption. All licenses expire annually on December 31st, if approved after April 30, 2007. License types are summarized below.

Company application/license status can be checked online by using the licensee search.

License types

License Type	Authorized Activities
Mortgage Lender	Make or broker mortgage loans at a designated principal office
Mortgage Broker	Broker or table-fund* mortgage loans at a designated principal office located in NC
Affiliated Mortgage Banker	Make or broker mortgage loans at a designated principal office and must meet certain size and net worth requirements depending on the type of entity and affiliations (see Form MLA14).
Branch Office	Conduct same activities as authorized at principal office
Mortgage Loan Officer; Limited Loan Officer	Accept or offer to accept applications for mortgage loans as an employee of a licensed Mortgage Lender or Broker

*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.

Exemptions

Under the new law, HUD-Approved lenders lose their former exemption and must be licensed. However, several classes of Mortgage Lenders and Brokers and their Loan Officers are exempt under the new law, primarily banks, thrifts and credit unions and their wholly owned subsidiaries.

Filing & Licensing Requirements

Filing Overview & Forms

Mortgage Lenders, Brokers, and Bankers 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 Loan Officer must be designated in the application.

Loan Officers

Any individual who, for compensation, accepts or offers to accept residential mortgage applications must be licensed as a Loan Officer 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 NC Mortgage Fundamentals Course and pass the NC Mortgage Loan Officer License Test in order to be licensed as a Loan Officer.

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 Loan Officers of the company, then he/she must also be a licensed Loan Officer. In addition, every Branch Office must have a designated Branch Manager who is also a licensed Loan Officer. 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 Loan Officer, 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 Lender Surety Bond in the amount of $150,000 or a Broker Surety Bond in the amount of $50,000 must be submitted with the license filing unless the licensee meets the definition of a “Qualified Lender*” and is submitting an audited Financial Statement that shows Net Worth in excess of $250,000 in assets acceptable to the Commissioner.

*Qualified lender: An entity who is engaged as a mortgage lender in North Carolina and is either a supervised or a nonsupervised institution, as these terms are defined in 24 C.F.R. § 202.2, approved by the United States Department of Housing and Urban Development.

Filing Fees

The initial application & licensing fee for a Mortgage Lender or Broker is One Thousand, Three Hundred and Fifty Dollars (including a $100 NMLS fee), plus One Hundred and Forty-Five Dollars (including a $20 NMLS fee) per Branch Office for any portion of the first licensing year ending December 31st. The initial license fee for Loan Officers is Ninety-Seven Dollars and Fifty cents (including a $30 NMLS fee) for any portion of a License year ending December 31st, plus the $46 fee to cover the cost of obtaining a credit report and conducting a criminal history check. These fees must be paid when submitting a filing online. All fees are non-refundable.

Rev. 10/29/2008