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 exempt. 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.
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 RequirementsFiling Overview & Forms
Mortgage Lenders, Brokers, and Bankers should use application form MU1 to apply for a license. An appropriate Surety Bond (see below) must also be included and a Managing Principal who is also a NC Licensed Loan Officer must be designated in the application.
Fillable versions of all forms are available on this website and applications may be submitted via the internet as well.
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 using a form MU4 "Uniform Individual Mortgage Application & Consent Form," 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 Managing Principal. If the Managing Principal 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 Managing Principal and each Branch Manager must have three (3) years of residential mortgage lending experience. If the Managing Principal is a licensed Loan Officer, then the Managing Principal 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 Managing Principal will serve as the primary contact for licensing matters. Managing Principals/Qualified 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
Our agency is currently working with the Conference of State Banking Supervisors and the American Association of Residential Mortgage Regulators in development of a national mortgage license system for the residential mortgage industry. In order to transition to the new national mortgage licensing system, our agency will start issuing an 18 month license instead of the traditional 12 month license until we are on the same renewal period as the national system. Any applications that are approved after May 1, 2007 will have an expiration date of December 31, 2008; as such, the application fee has been adjusted for this change and is noted in the instructions below.
The initial application & licensing fee for a Mortgage Lender or Broker is One Thousand, Two Hundred and Fifty Dollars ($1,250), plus One Hundred and Twenty-Five Dollars ($125.00) per Branch Office for any portion of the first licensing year ending December 31st. The initial license fee for Loan Officers is Sixty-Seven Dollars and Fifty cents ($67.50) 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 via money order or cashier's check made payable to the Department of Commerce/Banking Commission or with a debit/credit card or ACH payment when applying online. All fees are non-refundable.
Rev. 12/14/2007