Mortgage laws for North Carolina
SECTION 37-22-110. Definitions.
The following definitions apply in this chapter:
(1) "Act as a mortgage broker" means to act, for compensation or
gain, or in the expectation of compensation or gain, either directly or
indirectly, by: (i) soliciting, processing, placing, or negotiating a mortgage
loan for a borrower from a mortgage lender or depository institution or
offering to process, place, or negotiate a mortgage loan for a borrower from a
mortgage lender or depository institution, (ii) engaging in table-funding of a
mortgage loan, or (iii) acting as a loan correspondent whether those acts are
done by telephone, by electronic means, by mail, or in person with the
borrowers or potential borrowers. "Act as a mortgage broker" also
includes bringing a borrower and lender together to obtain a mortgage loan or
rendering a settlement service as described in 12 U.S.C. 2602(3) and 24 C.F.R.
Part 3500.2(b).
(5) "Affiliate" means a company that controls, is controlled by, or
is under common control with another company, as set forth in the Bank Holding
Company Act of 1956 (12 U.S.C. Section 1841, et seq.). For purposes of this
item, the term "control" means ownership of all of the voting stock
or comparable voting interest of the controlled person.
(6) "Board" means the State Board of Financial Institutions as that
term is used in Chapter 1, Title 34.
( (10) "Clerical or support duties" mean administrative functions
after the receipt of an application by a licensed mortgage originator or
lender, such as gathering information, requesting information, word processing,
sending correspondence, or assembling files, and may include:
(a) the receipt, collection, and distribution common for the processing or
underwriting of a residential mortgage loan; or
(b) any communication with a borrower to obtain the information necessary for
the processing or underwriting of a loan, to the extent that such communication
does not include taking a residential mortgage loan application, offering or
negotiating loan rates or terms, or counseling consumers about residential
mortgage loan rates or terms.
(11) "Commissioner" means the designee of the State Board of
Financial Institutions for purposes of licensing and regulation of mortgage
lenders and mortgage loan originators pursuant to this chapter.
( (13) "Depository institution" has the same meaning as in Section 3
of the Federal Deposit Insurance Act (12 U.S.C. Section 1811, et seq.), and
includes a credit union.
(17) "Escrow funds" means money entrusted to a mortgage lender by a
borrower for the purpose of payment of taxes and insurance or other payments to
be made in connection with the servicing of a mortgage loan.
(18) "Exempt person" means:
(a) an employee of a licensee whose responsibilities are limited to clerical or
support duties for the employer and who does not solicit borrowers, accept
applications, or negotiate the terms of loans on behalf of the employer;
(b) a depository institution or a subsidiary that is wholly owned and
controlled by the depository institution and regulated by a federal banking
agency or an institution regulated by the Farm Credit Administration. This
chapter does not apply to the exempt persons described in this subitem;
(c) an officer, registered loan originator, or employee of an exempt person
described in subitem (b) of this section when acting in the scope of employment
for the exempt person;
(d) a person who offers or negotiates terms of a mortgage loan with or on
behalf of an immediate family member of the individual;
(e) an individual who offers or negotiates terms of a mortgage loan secured by
a dwelling that served as the person's residence;
(f) an employee whose employment as a processor or underwriter is undertaken
pursuant to the direction and supervision of a licensee or exempt person except
when the processor or underwriter is working as an independent contractor;
(g) an attorney who negotiates the terms of a residential mortgage loan on
behalf of a client as an ancillary matter to the attorney's representation of
the client, unless the attorney is compensated by a mortgage lender, a mortgage
broker, or other mortgage loan originator or by an agent of the mortgage
lender, mortgage broker, or other mortgage loan originator;
(h) an attorney who works for a mortgage lender, pursuant to a contract, for
loss mitigation efforts or third party independent contractor who is
HUD-certified, Neighbor works-certified, or similarly certified, who works for
a mortgage lender, pursuant to a contract, for loss mitigation efforts;
(i) a manufactured home retailer and its employees if performing only clerical
or support duties in connection with the sale or lease of a manufactured home
and the manufactured home retailer and its employees receive no compensation or
other gain from a mortgage lender or a mortgage broker for the performance of
the clerical or support duties; or
(j) any other person deemed exempt pursuant to the Secure and Fair Enforcement
for Mortgage Licensing Act (SAFE Act), Section 1508, Title V of the Housing and
Economic Recovery Act of 2008, Public Law 110-289, and any regulations
promulgated thereunder.
(19) "Federal banking agencies" means the Board of Governors of the
Federal Reserve System, the Comptroller of the Currency, the Director of the
Office of Thrift Supervision, the National Credit Union Administration, and the
Federal Deposit Insurance Corporation.
(20) "Financial services or financial services related business"
means pertaining to securities, commodities, banking, insurance, consumer
lending, or real estate including, but not limited to, acting as or being
associated with a bank or savings association, credit union, mortgage lender,
mortgage servicer, mortgage broker, real estate broker, real estate salesperson
or agent, closing agent, title company, or escrow agent.
(21) "Immediate family member" means a spouse, child, sibling,
parent, grandparent, or grandchild including stepparents, stepchildren,
stepsiblings, and adoptive relationships.
(22) "Individual servicing a mortgage loan" means an employee of a
mortgage lender licensed in this State, that:
(a) collects or receives payments including payments of principal, interest,
escrow amounts, and other amounts due on existing obligations due and owing to
the licensed mortgage lender for a mortgage loan including, but not limited to,
when:
(i) the borrower is in default; or
(ii) the borrower is in reasonably foreseeable likelihood of default;
(b) works with the borrower and the licensed mortgage lender, collects data,
and makes decisions necessary to modify, either temporarily or permanently,
certain terms of those obligations; or
(c) otherwise finalizes collection through the foreclosure process.
(23) "Licensee" means a person who is licensed pursuant to this
chapter.
(24) "Loan commitment" or "commitment" means a statement,
written or electronic, by the mortgage lender setting forth the terms and
conditions upon which the mortgage lender is willing to make a particular
mortgage loan to a particular borrower.
(25) "Loan correspondent" means a person engaged in the business of
making mortgage loans as a third party originator and who does not engage in
all three of the following activities with respect to each mortgage loan:
(a) underwrite the mortgage loan written by their employees;
(b) approve the mortgage loan; and
(c) fund the mortgage loan utilizing an unrestricted warehouse or credit line.
A loan correspondent is not a mortgage lender.
(
(30) "Mortgage lender" means a person who acts as a mortgage lender
as that term is defined in item (2) or engages in the business of servicing
mortgage loans for others or collecting or otherwise receiving mortgage loan
payments directly from borrowers for distribution to another person. This
definition does not include engaging in a tablefunded transaction.
(33) "Nontraditional mortgage product" means a mortgage product other
than a thirty-year fixed rate mortgage loan.
(c) A processor or underwriter who is an independent contractor may not engage
in the activities of a processor or underwriter unless the independent
contractor processor or underwriter obtains and maintains a license as provided
by rule or regulation pursuant to Section 37-22-270.
(36) "Registered loan originator" means a natural person who meets
the definition of loan originator and is an employee of a depository
institution or a subsidiary that is wholly owned and controlled by the
depository institution and regulated by a federal banking agency or an
institution regulated by the Farm Credit Administration and is registered with
and maintains a unique identifier through the Nationwide Mortgage Licensing
System and Registry.
(
(40) "Tablefunding" means a settlement at which a loan is funded by a
contemporaneous advance of loan funds and an assignment of the loan to the
person advancing the funds.
(41) "TILA" means the Truth in Lending Act, 15 U.S.C. Section 1601,
et seq., and regulations adopted pursuant to it including, but not limited to,
the TILA-RESPA Integrated Disclosure Rule.
(42) "Unique identifier" means a number or other identifier assigned
by protocols established by the Nationwide Mortgage Licensing System and
Registry.
HISTORY: 2009 Act No. 67, Section 2, eff January 1, 2010; 2017 Act No. 93
(S.366), Section 1, eff September 16, 2017.
Federal Reserve System".
SECTION 37-22-120. Licensing requirements.
(A) Without first obtaining a license pursuant to this chapter it is unlawful
for a person, other than an exempt person, doing business in this State to:
(1) act as a mortgage lender or, directly or indirectly, engage in the business
of a mortgage lender under any name or title; or
(2) circulate or use advertising, including electronic means, make a
representation or give information to a person which indicates or reasonably
implies activity within the scope of this chapter.
(B) It is unlawful for a person to employ, compensate, or appoint as its agent
a loan originator unless the loan originator is licensed as a loan originator
pursuant to this chapter. An exempt person is not subject to this subsection.
(C) The license of a loan originator is not effective during a period that the
person is not employed by a mortgage lender licensed pursuant to this chapter.
(D) If a loan originator ceases to be employed by a mortgage lender licensed
pursuant to this chapter, the loan originator and the mortgage lender by whom
that person is employed promptly shall notify the commissioner in writing. The
mortgage lender's notice must include a statement of the specific reason or
reasons for the termination of the loan originator's employment. The reason for
termination is confidential information and must not be released to the public.
(E) A loan originator must not be employed simultaneously by more than one
mortgage lender licensed pursuant to this chapter.
(F) Independent contractors, except for exempt persons, must be licensed
separately. Processors and underwriters who are independent contractors must be
licensed as provided in Section 37-22-110(34)(c).
HISTORY: 2009 Act No. 67, Section 2, eff January 1, 2010.
SECTION 37-22-130. Contested case
proceedings; appeals.
(A) A person aggrieved by an administrative order issued by the commissioner may
request a contested case hearing before the Administrative Law Court in
accordance with the court's rules of procedure. If the person fails to request
a contested case hearing within the time provided in the court's rules of
procedure, the administrative order becomes final and the commissioner may
bring an action to enforce its order pursuant to Chapter 23, Title 1. This
section does not limit utilization of, or the scope of judicial review
available under, other means of review, redress, relief, or trial de novo
provided by law. A preliminary, procedural, or intermediate action or ruling of
the Administrative Law Court is reviewable immediately if review of the final
decision of the Administrative Law Court would not provide an adequate remedy.
(B) Contested case proceedings are instituted by filing a request for a
contested case hearing with the Administrative Law Court according to the rules
of procedure of the Administrative Law Court. Copies of the request for a
contested case hearing must be served upon the commissioner and all parties of
record. The final decision of the administrative law judge may be appealed as
provided in Section 1-23-380, Section 1-23-610, or Chapter 23, Title 1.
HISTORY: 2009 Act No. 67, Section 2, eff January 1, 2010.
SECTION 37-22-140. Application for licensure;
information required; identification of managing principal; filing fee; surety
bond; issuance of license.
(A) A person desiring to obtain a license pursuant to this chapter shall make
application for licensure to the commissioner on forms prescribed by the
commissioner. The application must contain the information the commissioner
considers necessary including, but not limited to, the applicant's:
(1) name, address, and social security number or, if applicable, Employer
Identification Number (EIN);
(2) form and place of organization, if applicable;
(3) proposed method of and locations for doing business, if applicable;
(4) qualifications and business history and, if applicable, the business
history of any partner, officer, or director, a person occupying a similar
status or performing similar functions, or a person directly or indirectly
controlling the applicant, including:
(i) a description of any injunction or administrative order by a state or
federal authority to which the person is or has been subject, including denial,
suspension, or revocation of a financial services or financial services related
license or registration;
(ii) a conviction, or plea of guilty or nolo contendere to a misdemeanor within
the last ten years involving financial services or a financial services related
business or any fraud, false statements or omissions, theft or wrongful taking
of property, bribery, perjury, forgery, counterfeiting, extortion, money
laundering, breach of trust, or a conspiracy to commit any of these offenses;
and
(iii) a conviction of, or plea of guilty or nolo contendere to, a felony;
(5) financial condition, credit history, and business history, with respect to
an application for licensing as a mortgage lender; and credit history and
business history, with respect to the application for licensing as a loan
originator; and
(6) consent to a national fingerprint-based criminal history record check
pursuant to Section 37-22-240 and submission of a set of the applicant's
fingerprints in a form acceptable to the commissioner. In the case of an
applicant that is a corporation, partnership, limited liability company,
association, or trust, each natural person who has control of the applicant or
who is the managing principal or a branch manager shall consent to a national
fingerprint-based criminal history record check pursuant to Section 37-22-240
and submit a set of that natural person's fingerprints pursuant to this item.
Refusal to consent to a criminal history record check constitutes grounds for
the commissioner to deny licensure to the applicant as well as to any entity:
(i) by whom or by which the applicant is employed;
(ii) over which the applicant has control; or
(iii) as to which the applicant is the current or proposed managing principal
or a current or proposed branch manager.
(B) In addition to the requirements imposed by the commissioner in subsection
(A), each applicant for licensure as a loan originator shall:
(1) have attained the age of at least eighteen years;
(2) work for a licensed mortgage lender;
(3) have satisfactorily completed prelicensing education of at least twenty
hours, which shall include at least three hours on South Carolina laws and
regulations, and the National Test Component with Uniform State Content
approved pursuant to 12 U.S.C. 5101, et seq.;
(4) have never had a loan originator license revoked in any governmental
jurisdiction; and
(5) have not been convicted of, or pled guilty or nolo contendere to, a felony
in a domestic, foreign, or military court: (i) during the ten-year period
preceding the date of the application for licensing, or (ii) at any time, if
the felony involved an act of fraud, dishonesty, breach of trust, or money
laundering.
(C) In addition to the requirements of subsection (A) of this section, each
applicant for licensure as a mortgage lender at the time of application and at
all times after that shall comply with the following requirements:
(1) If the applicant is a sole proprietor, the applicant shall have at least
three years of experience in financial services or financial services related
business or other experience or competency requirements as the commissioner may
impose.
(2) If the applicant is a general or limited partnership, at least one of its
general partners shall have the experience described in item (1).
(3) If the applicant is a corporation, at least one of its principal officers
shall have the experience described in item (1).
(4) If the applicant is a limited liability company, at least one of its
members or managers shall have the experience described in item (1).
(5) Instead of a showing of three years' experience, an applicant may show
proof of three years' employment with a federally insured depository
institution or a VA-, FHA-, or HUD-approved mortgagee.
(D) Each applicant shall identify one person meeting the requirements of
subsections (B) and (C) to serve as the applicant's managing principal.
(E) Every applicant for initial licensure shall pay a filing fee of one
thousand dollars for licensure as a mortgage lender or fifty dollars for
licensure as a loan originator, in addition to the actual cost of obtaining
credit reports and national fingerprint-based criminal history record checks.
If a licensed loan originator changes employment, a new license must be issued
and a fee of twenty-five dollars must be paid.
(F) A mortgage lender shall post and maintain a surety bond in an amount
determined by the commissioner, based on the total dollar amount of mortgage
loans subject to regulation by the commissioner pursuant to this act in a
calendar year in this State pursuant to the following: (i) dollar volume of
mortgage loans from $0 to $49,999,999, surety bond of $50,000, (ii) dollar
volume of mortgage loans from $50,000,000 to $249,999,999, surety bond of
$100,000, (iii) dollar volume of mortgage loans greater than $250,000,000
surety bond of $150,000. In no case is the surety bond less than fifty thousand
dollars. The surety bond must be executed by a surety company authorized by the
laws of this State to transact business within this State. The surety bond must
be in a form satisfactory to the commissioner, must be executed to the
commissioner, and must be for the use of the State for the recovery of
expenses, fines, and fees, or any of them, levied pursuant to this chapter and
for consumers who have losses or damages as a result of noncompliance with this
chapter by the mortgage lender. The full amount of the surety bond must be in
effect at all times. The license of a licensee expires upon the termination of
the bond by the surety company, unless a new bond is filed with the
commissioner before the termination of the previous bond. If the license
expires based on bond termination, all licensed activity must cease and the
person must apply for a license pursuant to subsection (A).
(G) Any sole proprietor, general partner, member or manager of a limited
liability company, or officer of a corporation who meets individually the
requirements of subsection (B), upon payment of the applicable fee, meets the
qualifications for licensure as a loan originator subject to the provisions of
subsection (I).
(H) Each principal office and each branch office of a licensed mortgage lender
at which business is conducted must be licensed pursuant to this chapter and
must be issued a separate license. A licensed mortgage lender shall file with
the commissioner an application on a form prescribed by the commissioner which
identifies the address of the principal office and each branch office and branch
manager. The commissioner may license a personal residence of a loan originator
as a branch office if it is located more than seventy-five miles from a
commercial branch office location. A licensing fee of one hundred fifty dollars
must be assessed by the commissioner for each branch office issued a license.
(I) If the commissioner determines that an applicant meets the qualifications
for licensure and finds that the financial responsibility, character, and
general fitness of the applicant are such as to command the confidence of the
community and to warrant belief that the business is to be operated honestly,
fairly, and efficiently according to the purposes of this chapter and in
accordance with all applicable state and federal laws, the commissioner shall
issue a license to the applicant. If the commissioner does not make that
determination, the commissioner shall refuse to license the applicant and shall
notify him of the denial.
(J) Issuance of a license does not indicate approval or acceptance of any contract,
agreement, or other document submitted in support of the application. A
licensee may not represent that its services or contracts are approved by the
State or state agency.
(K) A person who obtains a license as a mortgage lender, upon notice to the
commissioner on a form prescribed by the commissioner, may act as a mortgage
broker as defined in Section 37-22-110(1). The commissioner shall provide to
the administrator notification of which mortgage lenders also are acting as
brokers. A mortgage lender who also acts as a mortgage broker is not required
to obtain a license as a mortgage broker pursuant to Chapter 58, Title 40,
unless the person acts as a mortgage broker with regard to the majority of
mortgage loans reported on the person's Mortgage Call Report filed during the
last two quarters of the previous calendar year and the first two quarters of
the current calendar year. A mortgage lender acting as a mortgage broker must
comply with Sections 40-58-70, 40-58-75, and 40-58-78.
(L) Transitional licenses will be granted as authorized by and pursuant to the
SAFE Act.
(M) If the information contained in a document filed with the commissioner is
or becomes inaccurate or incomplete, the licensee promptly shall file a
correcting amendment to the information contained in the document.
(N) All advertisements of mortgage loans must comply with the Truth in Lending
Act, 15 U.S.C. 1601, et seq., and the South Carolina Consumer Protection Code,
Title 37.
HISTORY: 2009 Act No. 67, Section 2, eff January 1, 2010; 2017 Act No. 93
(S.366), Section 2, eff September 16, 2017.
Effect of Amendment
2017 Act No. 93, Section 2, amended the section, removing the state
fingerprint-based criminal history record check requirement, requiring three
hours of prelicensing education on state laws and regulations, allowing
licensure of a personal residence under certain circumstances, and allowing for
the grant of transitional licenses pursuant to the SAFE Act.
SECTION 37-22-150. Expiration and renewal of
licenses; fingerprint check; assignment or transfer of license.
(A) All licenses issued by the commissioner pursuant to this chapter expire
annually on the thirty-first day of December or on another date that the
commissioner may determine. The license is invalid after that date unless
renewed. The renewal period for all licensees is from November first through
December thirty-first annually or on another date the commissioner may
determine. A licensee desiring to renew its license must submit an application
to the commissioner on forms and containing information the commissioner
requires. Applications received after December thirty-first or another date the
commissioner determines, are late and the late fees in subsection (B) apply. A
license may be renewed by compliance with this section and by paying to the
commissioner, in addition to the actual cost of obtaining credit reports and
national fingerprint-based criminal history record checks as the commissioner
may require, a renewal fee as prescribed by the board for each of the
following:
(1) for a licensed mortgage lender, an annual renewal fee of no more than eight
hundred dollars and no more than one hundred fifty dollars for each branch
office; and
(2) for a licensed loan originator, an annual fee of no more than fifty
dollars.
(B) If a license of a licensed mortgage lender is not renewed during the
renewal period, a late fee of not more than five hundred dollars as prescribed
by the board, in addition to the renewal fee in subsection (A)(1), must be
assessed. If a license of a licensed loan originator is not renewed during the
renewal period, a late fee of not more than one hundred dollars as prescribed
by the board, in addition to the renewal fee in subsection (A)(2), must be
assessed as a late fee to a renewal. If a licensee fails to renew its license
within thirty days after the date the license expires or otherwise fails to
maintain a valid license, the commissioner shall require the licensee to comply
with the requirements for the initial issuance of a license pursuant to this
chapter, in addition to paying any fee that has accrued.
(C) At any time required by the commissioner, each person described in Section
37-22-140 shall furnish to the commissioner consent to a national
fingerprint-based criminal history record check and a set of fingerprints in a
form acceptable to the commissioner. Refusal to consent to a criminal history
record check may constitute grounds for the commissioner to deny renewal of the
license of the person as well as the license of another person by which he is
employed, over which he has control, or as to which he is the current or
proposed managing principal or a current or proposed branch manager.
(D) A license issued pursuant to this chapter is not assignable or
transferable. Control of a licensee must not be acquired through a stock
purchase or other device without the prior written consent of the commissioner.
The commissioner may not give written consent if the commissioner finds that
any of the grounds for denial, revocation, or suspension of a license pursuant
to Section 37-22-200 are applicable to the acquiring person.
HISTORY: 2009 Act No. 67, Section 2, eff January 1, 2010; 2017 Act No. 93
(S.366), Section 3, eff September 16, 2017.
Effect of Amendment
2017 Act No. 93, Section 3, in (A) and (C), deleted "and state"
preceding "fingerprint-based criminal history record check".
SECTION 37-22-160. Continuing professional
education.
(A) As a condition of license renewal, a licensee must complete at least eight
hours of continuing professional education annually, which shall include at
least one hour on South Carolina laws and regulations, for the purpose of
enhancing professional competence and responsibility. The continuing
professional education completed must be reported to the commissioner annually.
Documentation of courses completed must be maintained by all licensees. This
documentation is subject to inspection by the commissioner for up to two years
after the date of course completion.
(B) Continuing education credit may be granted only for the year in which the
class is taken and may not be granted for the same course in successive years.
(C) If a licensee fails to complete the continuing professional education
before the license expiration date, his license expires and he shall pay a
penalty of not more than one hundred dollars, in addition to other fees or
penalties that have accrued, to reinstate the license.
(D) All prelicensing education, continuing education, and written examinations
must be approved through the Nationwide Mortgage Licensing System and Registry,
pursuant to 12 U.S.C. 5101, et seq. before credit can be awarded. Applicants
and licensees that successfully complete education or testing approved through
the Nationwide Mortgage Licensing System and Registry fulfill the requirements
of this State.
HISTORY: 2009 Act No. 67, Section 2, eff January 1, 2010; 2017 Act No. 93
(S.366), Section 4, eff September 16, 2017.
Effect of Amendment
2017 Act No. 93, Section 4, in (A), inserted ", which shall include at
least one hour on South Carolina laws and regulations,".
SECTION 37-22-170. Managing principal; branch
offices; notification of commissioner of designation and change of managing
principal or branch manager.
A mortgage lender licensed pursuant to this chapter shall have a managing
principal who operates the business under that manager's full charge, control,
and supervision. A mortgage lender may operate a branch office subject to the
requirements of this chapter. Each principal and branch office of a mortgage lender
licensed pursuant to this chapter shall have a branch manager who meets the
requirements of Section 37-22-140(B) and (C)(1). Each mortgage lender licensed
pursuant to this chapter shall file a form prescribed by the commissioner
indicating the business's designation of managing principal and branch manager
for each branch and their acceptance of the responsibility. The managing
principal for a licensee's business also may serve as the branch manager of one
of the licensee's branch offices. A mortgage lender licensed pursuant to this
chapter shall notify the commissioner of a change in its managing principal or
any branch manager. The license of a licensee who does not comply with this
provision must be suspended pursuant to Section 37-22-200 until the licensee
complies with this section. A licensee who operates as a sole proprietorship is
a managing principal for the purposes of this chapter.
HISTORY: 2009 Act No. 67, Section 2, eff January 1, 2010.
SECTION 37-22-180. Notice of change of
address; display of license.
(A) A licensee shall report to the commissioner a change of address of the
principal place of business or a branch office at least seven days before the
change. Change of address notification of a licensed location must be
accompanied by a fee of twenty-five dollars.
(B) A mortgage lender licensed pursuant to this chapter shall display in plain
view in its principal office and in each branch the license issued by the
commissioner. A loan originator licensed pursuant to this chapter shall display
in each branch office in which mortgage loans are originated a copy of the
license issued by the commissioner.
HISTORY: 2009 Act No. 67, Section 2, eff January 1, 2010.
SECTION 37-22-190. Prohibited activities;
violation of state or federal law.
(A) In addition to the activities prohibited by other provisions of state or
federal law, it is unlawful for a person licensed pursuant to this chapter, in
the course of a mortgage loan origination, to:
(1) misrepresent or conceal the material facts or make false promises likely to
influence, persuade, or induce an applicant for a mortgage loan or a mortgagor
to take a mortgage loan, or to pursue a course of misrepresentation through
agents or otherwise;
(2) refuse improperly or fail to issue a satisfaction of a mortgage pursuant to
Section 29-3-310;
(3) fail to account for or deliver to a person entitled to receive funds,
documents, or other things of value obtained in connection with a mortgage loan
including money provided by a borrower for a real estate appraisal or a credit
report, which the mortgage lender or loan originator is not entitled to retain
under the circumstances;
(4) pay, receive, or collect in whole or in part any commission, fee, or other
compensation for a mortgage loan origination in violation of this chapter
including any unlicensed person other than an exempt person;
(5) charge or collect a fee or rate of interest or to make or service a
mortgage loan with terms or conditions or in a manner contrary to the
provisions of this chapter;
(6) advertise mortgage loans including rates, margins, discounts, points, fees,
commissions, or other material information including material limitations on
the loans, unless the person is able to make the mortgage loans available as
advertised to qualified applicants;
(7) fail to disburse funds in good faith and in accordance with a written
commitment or agreement to make a mortgage loan that has been accepted by the
borrower;
(8) engage in a transaction, practice, or course of business in connection with
the making or servicing of, or purchase or sale of, a mortgage loan that is not
in good faith or fair dealing, that is unconscionable, as set forth in Section
37-5-108, or that constitutes a fraud upon a person;
(9) fail to pay reasonable fees within a reasonable time to a licensed third
party for services that are:
(a) requested from the third party in writing by the mortgage lender or an
employee of the mortgage lender; and
(b) performed by the third party in connection with the origination or closing
of a mortgage loan for a customer or mortgage lender;
(10) influence or attempt to influence through coercion, extortion, or bribery,
the development, reporting, result, or review of a real estate appraisal sought
in connection with a mortgage loan. This item does not prohibit a mortgage
lender or servicer from asking the appraiser to do one or more of the
following:
(a) consider additional appropriate property information;
(b) provide further detail, substantiation, or explanation for the appraiser's
value conclusion; or
(c) correct errors in the appraisal report;
(11) fail to comply with the mortgage loan servicing transfer, escrow account
administration, or borrower inquiry response requirements imposed by Sections 6
and 10 of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. Section
2605 and Section 2609, and regulations adopted pursuant to them and state law;
(12) fail to provide within a reasonable time, upon written request of a
borrower, a payment history statement in a form easily understood by the
borrower including payment dates and amounts and charges within the twelve
months preceding the month in which the request is received and the total
amount unpaid as of the end of the period covered by the statement. The
statement must be provided without charge once during each year of the term of
the obligation. If additional statements are requested, the borrower may be
charged a reasonable fee, not to exceed five dollars for each additional
statement;
(13) take a security interest in a borrower's principal dwelling where the
amount of the mortgage loan is less than five thousand dollars;
(14) fail to provide disclosures as required by state or federal law or collect
any fee before providing required disclosures;
(15) fail to comply with this chapter or other state or federal law including
rules and regulations applicable to business regulated by this chapter;
(16) falsely advertise or misuse names in violation of 18 U.S.C. Section 709 or
state law; or
(17) use any trade name or insignia of membership in an organization of which
the licensee is not a member or advertise falsely through any material
including, but not limited to, business card, stationery, or signage concerning
a designation or certification of special education, credentials, trade
organization membership, or business.
(B) A violation of a state or federal law applicable to a business covered by
this chapter is a violation of this chapter and may be enforced by the
commissioner.
HISTORY: 2009 Act No. 67, Section 2, eff January 1, 2010; 2017 Act No. 93
(S.366), Section 5, eff September 16, 2017.
Effect of Amendment
2017 Act No. 93, Section 5, in (A)(11), deleted "by the Secretary of the
Department of Housing and Urban Development and" following
"regulations adopted pursuant to them".
SECTION 37-22-200. Powers of commissioner
relating to denial, suspension, revocation or refusal to renew license;
surrender; investigations and subpoena of documents.
(A) The commissioner, by order, may deny, suspend, revoke, or refuse to issue
or renew a license of a licensee or applicant pursuant to this chapter or may
restrict or limit the activities relating to mortgage loans of a licensee or a
person who owns an interest in or participates in the business of a licensee,
if the commissioner finds that both:
(1) the order is in the public interest; and
(2) the applicant, licensee, or any partner, member, manager, officer,
director, loan originator, managing principal, or other person occupying a
similar status or performing similar functions or a person directly or
indirectly controlling the applicant or licensee:
(a) has filed an application for license that, as of its effective date or as
of a date after filing, contained a statement that, in light of the
circumstances under which it was made, is false or misleading with respect to a
material fact;
(b) has violated or failed to comply with a provision of this chapter or order
of the commissioner;
(c) within the past ten years has been convicted of, or pled guilty or nolo
contendere to, a misdemeanor involving financial services or financial services
related business or an offense involving breach of trust or fraudulent or
dishonest dealing, or money laundering or has been convicted of, or pled guilty
or nolo contendere to, a felony in a domestic, foreign, or military court;
(d) is permanently or temporarily enjoined by a court of competent jurisdiction
from engaging in or continuing conduct or practice involving financial services
or financial services related business;
(e) is the subject of an order of the commissioner denying, suspending, or
revoking that person's license;
(f) is the subject of an order entered by the authority of a governmental
entity with jurisdiction over the financial services or financial services
related industry denying or revoking that person's license;
(g) does not meet the qualifications or the financial responsibility,
character, or general fitness requirements, or a bond or capital requirements,
pursuant to this chapter;
(h) has been the executive officer or controlling shareholder or owned a
controlling interest in a financial services or financial services related
business that has been subject to an order or injunction described in subitems
(d), (e), or (f);
(i) has failed to pay the proper filing or renewal fee pursuant to this chapter
or a fine, penalty, or fee imposed by any governmental entity. However, the
commissioner may enter only a denial order pursuant to this subitem, and the
commissioner shall vacate the order when the deficiency is corrected; or
(j) has falsely certified attendance or completion of hours at an approved
education course.
(B) The commissioner, by order, summarily may postpone or suspend the license
of a licensee pending final determination of a proceeding pursuant to this
section. Upon entering the order, the commissioner shall notify promptly the
applicant or licensee that the order has been entered, the reasons for the
order, and the procedure for requesting a hearing before the Administrative Law
Court. If a licensee does not request a hearing and the commissioner does not
request a hearing, the order remains in effect until it is modified or vacated
by the commissioner.
(C) The commissioner, by order, may impose an administrative penalty upon a
licensee or any member, partner, officer, director, or other person occupying a
similar status or performing similar functions on behalf of a licensee for a
violation of this chapter. The administrative penalty may not exceed ten
thousand dollars for each violation of this chapter by a licensee. The
commissioner may impose an administrative penalty that may not exceed ten
thousand dollars for each violation of this chapter by a person other than a
licensee or exempt person.
(D) In addition to other powers pursuant to this chapter, upon finding that an
action of a person is in violation of this chapter, the commissioner may order
the person to cease from the prohibited action. If the person subject to the
order fails to request a contested case hearing in accordance with Section
37-22-130, or if the person requests the hearing and it is denied or dismissed,
and the person continues to engage in the prohibited action in violation of the
commissioner's order, the person is subject to an administrative penalty that
may not exceed twenty-five thousand dollars for each violation of the
commissioner's order. The penalty provision of this section is in addition to
and not instead of another provision of law for failure to comply with an order
of the commissioner.
(E) Unless otherwise provided, all actions and hearings pursuant to this
chapter are governed by Chapter 23, Title 1.
(F) If a licensee is accused of any act, omission, or misconduct that subjects
the licensee to disciplinary action, the licensee, with the consent and approval
of the commissioner, may surrender the license and the rights and privileges
pertaining to it and is not eligible to receive, or to submit an application
for, licensure for a period of time established by the commissioner.
(G) If the commissioner has reasonable grounds to believe that a licensee or
other person has violated this chapter or that facts exist that would be the
basis for an order against a licensee or other person, the commissioner, either
personally or by a person duly designated by the commissioner, at any time may
investigate or examine the loans and business of the licensee and examine the
books, accounts, records, and files of the licensee or other person relating to
the complaint or matter under investigation. The reasonable cost of this
investigation or examination must be charged against the licensee. The
commissioner may require the licensee or other person to submit a consent to a
national and state fingerprint-based criminal history record check and a set of
that person's fingerprints in a form acceptable to the commissioner in
connection with an examination or investigation. Refusal to submit the
requested criminal history record check or a set of fingerprints is grounds for
disciplinary action.
(H) The commissioner may subpoena documents and witnesses and compel their
production and attendance, to examine under oath all persons whose testimony
the commissioner considers relative to the person's business and require the
production of books, papers, or other materials.
(I) The commissioner, at the licensee's expense, may conduct routine
examinations of the books and records of a licensee to determine compliance
with this chapter.
(J) The commissioner shall cooperate and share information with an agency of
this State, other states, or the federal government concerning activity
regulated by this chapter. The commissioner shall accept or participate in
examinations conducted by one of these agencies.
(K) In addition to the authority described in this section, the commissioner
may require a person to pay to a borrower or other natural person amounts
received by the person or its employees in violation of this chapter.
(L) If the commissioner finds that the managing principal, branch manager, or
loan originator of a licensee had knowledge of, or reasonably should have had
knowledge of, or participated in an activity that results in the entry of an
order suspending or withdrawing the license of a licensee, the commissioner may
prohibit the branch manager, managing principal, or loan originator from
serving as a branch manager, managing principal, or loan originator for the
period of time the commissioner considers necessary.
(M) Orders issued by the commissioner or by the Administrative Law Court
pursuant to this chapter must be reported by the commissioner to the Nationwide
Mortgage Licensing System and Registry.
HISTORY: 2009 Act No. 67, Section 2, eff January 1, 2010.
SECTION 37-22-210. Commissioner's records;
segregated escrow funds; licensee ceasing business activities.
(A) The commissioner shall keep a list of all applicants for licensure pursuant
to this chapter which includes the date of application, name, and place of
residence and whether the license was granted or refused.
(B) The commissioner shall keep a current roster containing the names and
places of business of all licensees and containing their respective loan
originators. The rosters must:
(i) be kept on file in the office of the commissioner;
(ii) contain information regarding all orders or other action taken against the
licensees, loan originators, and other persons; and
(iii) be open to public inspection.
(C)(1) A licensee shall make and keep the accounts, correspondence, memoranda,
papers, books, and other records prescribed by the commissioner. Records must
be preserved for three years unless the commissioner prescribes otherwise for
particular types of records. A licensee should develop, maintain, and test
disaster recovery plans for all records that are maintained. The recordkeeping
requirements imposed by the commissioner or this subsection must not be greater
than those imposed by applicable state or federal law. Licensee's records may
be maintained electronically, if approved by the commissioner, so long as they
are readily accessible for examination by the commissioner.
(2) Beginning on January 1, 2010, in addition to the records required to be
maintained by licensees pursuant to item (1), each licensee shall maintain a
mortgage log that contains these specific data elements:
(i) credit score of the borrower;
(ii) adjustable or fixed type of loan;
(iii) term of the loan;
(iv) annual percentage rate of the loan; and
(v) appraised value of the collateral.
Each licensee shall submit to the commissioner by March thirty-first of each
year its mortgage log data and the data identified in 12 C.F.R. Part 1003, et
seq., in a form determined by the commissioner. The licensee shall pay a fine
of one hundred dollars a day for late or incomplete data submissions. Data
collected by the commissioner pursuant to this section is confidential and may
be released to the public only in composite form. The commissioner annually
shall submit to the department, in a form prescribed by the department and no
later than April thirtieth, the data that it collected. The department shall
prepare and make available to the public a report based on the data. The report
must be available by June thirtieth each year.
(D) If the information contained in a document filed with the commissioner is
or becomes inaccurate or incomplete in a material respect, the licensee
promptly shall file a correcting amendment to the information contained in the
document.
(E) A licensee shall maintain in a segregated escrow fund or trust account
funds that come into the licensee's possession, but which are not the
licensee's property and which the licensee is not entitled to retain under the
circumstances. The escrow fund or trust account must be held on deposit in a
federally insured financial institution. Escrow funds must be accounted for in
compliance with the rules under RESPA.
(F) A licensee clearly shall display the unique identifier assigned by the
Nationwide Mortgage Licensing System and Registry on all mortgage loan forms,
solicitations, or advertisements including business cards or websites and any other
documents furnished in connection with a mortgage loan transaction.
(G) A licensee ceasing activities regulated by this chapter and desiring no
longer to be licensed shall inform the commissioner at least seven days in
advance. The licensee shall include with the notification a plan of withdrawal
that includes a timetable for the disposition of the business, the location of
the books, records, and accounts until the end of the retention period, and
certification of the proper disposal of those records after that.
HISTORY: 2009 Act No. 67, Section 2, eff January 1, 2010; 2017 Act No. 93
(S.366), Section 6, eff September 16, 2017.
Effect of Amendment
2017 Act No. 93, Section 6, in (C)(2), substituted "12 C.F.R. Part 1003,
et seq." for "12 C.F.R. Part 203 et seq.".
SECTION 37-22-220. Maintenance of records by
licensee; annual mortgage reports.
(A) A licensee shall maintain records in conformity with generally accepted
accounting principles and practices in a manner that will enable the
commissioner to determine if the licensee is complying with the provisions of
this chapter and other state and federal laws. The recordkeeping system of a
licensee is sufficient if it makes the required information reasonably
available. The records need not be kept in the place of business where loans
are made if the commissioner is given free access to the records wherever
located and the licensee pays the reasonable cost of their examination.
(B) On or before March thirty-first each year, a licensee shall file with the
commissioner an annual report in the form prescribed by the commissioner
relating to all mortgage loans made, serviced, or brokered by it. The licensee
shall pay a fine of one hundred dollars a day for each late or incomplete
annual report.
(C) The mortgage loan report shall include, but is not limited to, the total
number and dollar amounts in connection with all mortgage loans, of:
(1) first and subordinate lien loans originated by licensee and closed in the
name of another party;
(2) first and subordinate lien loans originated by another party and closed in
the name of the licensee;
(3) first and subordinate lien loans originated by and closed in the name of
the licensee;
(4) first and subordinate lien loans originated by and closed in the name of another
party but funded by licensee;
(5) loans purchased by licensee;
(6) first and subordinate lien loans serviced by licensee;
(7) loans owned with and without servicing rights;
(8) loans sold with and without servicing rights;
(9) loans paid off before and at maturity;
(10) unpaid loans at the beginning and end of the reporting year;
(11) delinquent loans that are 30-59, 60-89, and ninety days or more
delinquent, of all the loans the licensee owned as of December thirty-first;
(12) loans in foreclosure as of December thirty-first and foreclosed in the
previous calendar year by licensee;
(13) mortgage loans charged against reserve for loan losses as a result of
foreclosures during the reporting year; and
(14) loans repurchased during the previous calendar year.
(D) The annual report also must include the total gross revenue earned in this
State under this license, the total dollar amount of points paid to the
licensee by borrowers on first and subordinate lien mortgage loans, the total
dollar amount of points paid to brokers by the licensee on first and
subordinate lien mortgage loans, including yield spread premiums, and the
lending institution, maximum amount available, outstanding balance, and
expiration date of licensee's four largest warehouse lines of credit during the
previous calendar year.
(E) Information contained in annual reports is confidential and may be
published only in composite form.
(F) The commissioner annually shall submit to the department, in a form
prescribed by the Department of Consumer Affairs and no later than April
thirtieth, the data that it collected. The department shall prepare and make
available to the public a report based on the data. The report must be
available by June thirtieth each year.
HISTORY: 2009 Act No. 67, Section 2, eff January 1, 2010.
SECTION 37-22-230. Violations of chapter;
penalties.
A person who willfully violates a provision of this chapter is guilty of a
misdemeanor and, upon conviction, must be fined not more than five hundred
dollars or imprisoned not more than six months, or both, for each violation.
Each transaction involving the unlawful making or servicing of a mortgage loan
is a separate offense.
SECTION 37-22-240. Criminal background
checks.
Using the information supplied by the commissioner, the applicant must undergo
a national criminal record check, supported by fingerprints, by the Federal
Bureau of Investigation (FBI). The results of these criminal record checks must
be reported to the commissioner. The Nationwide Mortgage Licensing System and
Registry is authorized to retain the fingerprints for certification purposes
and for notification of the commissioner regarding subsequent criminal charges
which may be reported to the FBI. The commissioner shall keep all information
pursuant to this section privileged, in accordance with applicable state and
federal guidelines.
HISTORY: 2009 Act No. 67, Section 2, eff January 1, 2010; 2017 Act No. 93
(S.366), Section 7, eff September 16, 2017.
Effect of Amendment
2017 Act No. 93, Section 7, rewrote the section, removing certain requirements
and authorizing the Nationwide Mortgage Licensing System and Registry to retain
fingerprints for certain purposes.
SECTION 37-22-250. Funds payable to
commissioner.
All funds specified in this chapter must be paid to the commissioner, must be
used to implement the provisions of this chapter, and are nonrefundable.
HISTORY: 2009 Act No. 67, Section 2, eff January 1, 2010.
SECTION 37-22-260. Promulgation of
regulations.
(A) The commissioner may promulgate regulations necessary to effectuate the
purposes of this chapter.
(B) For the purpose of participating in the Nationwide Mortgage Licensing
System and Registry, the commissioner may waive or modify, in whole or in part,
by rule, regulation, or order, any or all of the requirements of this chapter
and establish new requirements as reasonably necessary to participate in the
Nationwide Mortgage Licensing System and Registry.
(C) For the purposes of implementing an orderly and efficient licensing
process, the commissioner may establish licensing rules or regulations and
interim procedures for licensing and acceptance of applications. For previously
registered or licensed individuals, the commissioner may establish expedited
reviews, expedited licensing procedures, and grandfather provisions.
HISTORY: 2009 Act No. 67, Section 2, eff January 1, 2010.
SECTION 37-22-270. Participation in
Nationwide Mortgage Licensing System and Registry.
(A) The commissioner may participate in a Nationwide Mortgage Licensing System
and Registry and may:
(1) facilitate and participate in the establishment and implementation of the
Nationwide Mortgage Licensing System and Registry;
(2) enter into agreements and contracts including cooperative, coordinating,
and information sharing agreements;
(3) contract with third parties to process, maintain and store information
collected by the Nationwide Mortgage Licensing System and Registry;
(4) authorize the Nationwide Mortgage Licensing System and Registry to collect
fingerprints on the commissioner's behalf in order to receive national criminal
history background record checks from the FBI to retain for certification
purposes and for notification of the commissioner regarding subsequent criminal
charges which may be reported to the FBI in accordance with Sections 37-22-140
and 37-22-240;
(5) authorize the Nationwide Mortgage Licensing System and Registry to collect
credit reports on the commissioner's behalf for all licensees in accordance
with Section 37-22-140;
(6) require persons that must be licensed by this chapter to utilize the
Nationwide Mortgage Licensing System and Registry;
(7) require all applicants and licensees to pay all applicable funds provided
for in this chapter through the Nationwide Mortgage Licensing System and
Registry;
(8) provide information to and receive information from the Nationwide Mortgage
Licensing System and Registry;
(9) authorize a third party to collect funds associated with licensure on
behalf of the commissioner; and
(10) authorize the Nationwide Mortgage Licensing System and Registry to collect
and disburse consumer complaints.
(B) Persons required to be licensed pursuant to this chapter must be required
to pay all applicable fees to utilize the Nationwide Mortgage Licensing System
and Registry and consent to utilizing the Nationwide Mortgage Licensing System
and Registry to obtain fingerprint-based criminal history background record
checks and credit reports.
(C) The commissioner shall provide licensees with written notice sent to the
address of record on file with the commissioner through the United States
Postal Service the date the Nationwide Mortgage Licensing System and Registry
will be available for their use. Licensees shall have one hundred and twenty
days from the date the system is available for use to enter all their licensing
information into the Nationwide Mortgage Licensing System and Registry. All
filings required by the commissioner pursuant to this chapter after the date
the system is available for use must be made through the Nationwide Mortgage
Licensing System and Registry, except for exempt persons.
(D) All licensees licensed through the Nationwide Mortgage Licensing System and
Registry must use the unique identifier assigned in all advertising and on all
mortgage loan documents.
(E) Notwithstanding another provision of law to the contrary, the Nationwide
Mortgage Licensing System and Registry is not intended to and does not replace
or affect the commissioner's authority to grant, suspend, revoke, or deny a
license required pursuant to this chapter.
(F) The commissioner shall develop a plan that ensures an orderly transition to
the Nationwide Mortgage Licensing System and Registry. This transition plan
must address issues of prelicensing education, written examinations, credit
reports, and national and state fingerprint-based criminal histories and record
checks.
HISTORY: 2009 Act No. 67, Section 2, eff January 1, 2010; 2017 Act No. 93
(S.366), Section 8, eff September 16, 2017.
Disclaimer * Policies * Photo Credits * Contact Us
South Carolina mortgage broker
bond is as follows:
(1.) For a
dollar volume of mortgage loans from $0 to $49,999,999, a mortgage broker bond
of $25,000,
(2.) For a
dollar volume of mortgage loans from $50,000,000 to $99,999,999, a mortgage
broker bond of $40,000,
(3.) For a
dollar volume of mortgage loans greater than $100,000,000, a mortgage
broker bond of $55,000.
in no
case will the South Carolina mortgage
broker bond be less than the amount of twenty-five thousand
dollars
LENDER
Volume of loans less
than $49,999,999 require a $50,000 surety bond.
Loan
volumes $50,000,000 up to $249,999,999 require a $100,000 surety bond,
And loan
volumes exceeding $250,000,000 require a $150,000 surety bond.
North Carolina
Under
04 NCAC 03M .0401 , mortgage bankers and mortgage brokers must report any loan
repurchased due to a material misstatement made in connection with the mortgage
lending process within:
28
days
14
days
7
days
30
daysYou correctly checked this.
Mortgage
bankers, mortgage brokers, and loan officers shall report within 30 days the
name of any person suspected of making a material misstatement in connection
with the mortgage lending process. Mortgage bankers and mortgage brokers must
also report within 30 days any loan repurchased due to a material misstatement
made in connection with the mortgage lending process.
Mortgage
Brokers and Bankers must, after calendar year end, file an annual report
questionnaire (ARQ) in an NMLS-approved format within:
30
days
90
daysYou correctly checked this.
60
days
120
days
Mortgage
Brokers and Bankers must, after calendar year end, file an annual report
questionnaire (ARQ) in an NMLS-approved format within 90 days.
Score: 100%
Question 3
Mortgage
Brokers must provide, among other things, a quarterly Mortgage Call Report
showing loan activity details within:
45
days of the end of each quarter
14
days of the end of each quarter
30
days of the end of each quarter
28
days of the end of each quarter
Mortgage
Brokers must provide, among other things, an annual certification from insured
financial institutions confirming: a) a demand deposit account exists and
contains an average daily balance of $10,000 for the previous year covered by
annual report (must be signed by QIL); b) an annual certification of $25,000
net worth; a quarterly Mortgage Call Report within 45 days of the end of each
quarter with loan activity details (effective May 2011).
On
October 3, 2015, the Good Faith Estimate and the Initial Truth-in-Lending
disclosure were replaced with the:
Closing
Disclosure
HUD-1
Disclosure
Final
Truth-in-Lending disclosure
Loan
EstimateYou correctly checked this.
On
October 3, 2015, the Good Faith Estimate and the Initial Truth-in-Lending
disclosure were replaced with the Loan Estimate. Similarly, the HUD-1 and the
Final Truth-in-Lending disclosures were replaced with the Closing Disclosure.
The Consumer Financial Protection Bureau (CFPB) also integrated the Real Estate
Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA)
disclosures and regulations. These are now referred to as TRID (TILA-RESPA
Integrated Disclosure Rule).
Score: 100%
Question 5
Each
point paid at closing by the borrower to the mortgage lender and/or mortgage
broker is equivalent to
0,75%
of the loan amount
1%
of the loan amountYou correctly checked this.
1,5%
of the loan amount
0,5%
of the loan amount
Points
are a type of fee paid at closing by you to your mortgage lender and/or
mortgage broker. Each point equals 1% of the loan amount. Discount points can
be a good idea if consumers plan to stay in a home for some time since they can
lower the monthly loan payment. There are two types of points: origination points
and discount points. Origination Points are charged to recover some of the
lender’s costs of the loan origination process. Usually, your Loan Officer's
compensation will be based on the origination points and may be negotiable.
Discount Points are paid to lower your interest rate. This is known as a rate
buy‐down. A general rule of thumb is that one full discount point will lower
your fixed interest rate .25% or your adjustable rate .375% for the term of the
loan. There is usually some flexibility by the lender in determining the actual
buy‐down formula, but not as much as with origination points.
