Promoting strength and fairness in
the financial services marketplace

  • Examination Information
    • Common Recommendations
    • Common Violations
    • Disclosures
    • Document Retention and Destruction
    • Examination Tips

Common Recommendations Cited in Examination Reports

The Examination Report will list weaknesses noted during the examination requiring management attention and corrective action.

The mortgage examination staff of the North Carolina Office of Commissioner of Banks (NCCOB) has prepared a listing of the most common recommendations cited in Examination Reports.

Regulatory Authority Recommendation
04 N.C.A.C. 03M .0501(c) & (d) Retain copies of all agreements or contracts with the applicant, including any commitment and lock-in agreements, and all disclosures required by state and federal law.
Title 16, Chapter I, Subchapter C, Part 314 of the CFR. Financial institutions are required to develop, implement, and maintain a comprehensive information security program that is written in one or more readily accessible parts and contains administrative, technical, and physical safeguards that are appropriate to the size and complexity, the nature and scope of its activities, and the sensitivity of any customer information at issue. Such safeguards shall include the elements set forth in §314.4 and shall be reasonably designed to achieve the objectives of this part.
N.C. Gen. Stat. § 53 244.030 (4) & (26) The NC SAFE Act does not allow a mortgage company’s principal place of business or any branch offices to be located at an individual’s home or residence.

A principal place of business shall consist of at least one enclosed room or building of stationary construction in which negotiations of mortgage loan transactions may be conducted and carried on in privacy and in which all of the books, records, and files pertaining to mortgage loan transactions relating to borrowers in this State are maintained. A principal office shall not be located at an individual's home or residence.

A branch office of a mortgage broker or lender must be separate and distinct from the mortgage broker's or lender's principal office and is where its employees engage in the mortgage business. A branch office shall not be located at an individual's home or residence.
24 CFR §3500.15 of Regulation X Provide applicants with an Affiliated Business Disclosure, when applicable.
15 USC § 1681m When taking adverse action with respect to any applicant that is based in whole or in part on any information contained in a consumer report the Statement of Credit Denial, Termination or Change shall contain the name, address and telephone number of the consumer reporting agency.
24 CFR § 110.10B (c) Display the Federal Housing Act poster in clear public view.
N.C. Gen. Stat. § 24-1-1E (5) (b) The high-cost home loan statute provides that if the borrower has a right to select an attorney from an approved list then attorneys’ fees are excluded from the calculation as to whether it is a high-cost loan. Therefore, the suggested practice is for the broker/lender to provide the borrower with a list of acceptable attorneys from which they may choose in writing.
04 NCAC 03M .0502 (a) Except for samples of advertising materials retained pursuant to 4 NCAC 03M.0501(f), all records required by the North Carolina Administrative Code shall be kept for a period of at least three years and shall be available for inspection and copying upon request by NCCOB.
04 NCAC 03M .0403 The State of North Carolina has no provision available to place a company under an “inactive” status. As such, in the case of a company that is not conducting business as a mortgage lender or broker the company has the option of:

  • Surrendering their company license and re-applying for licensure upon a decision to operate as a mortgage broker/lender.
  • Conducting adequate business as to be considered operational in the mortgage broker/lender industry.