GEORGIA MORTGAGE LENDER LICENSING REQUIREMENTS


EXEMPTIONS

Banks, credit card banks, savings institutions, building and loan associations and credit unions authorized
to act as such under the laws of state or federal law, the deposits of which are federally insured, and their
subsidiaries.

Persons subject to examination by the Banking Department, except as set forth above.

Any subsidiary or affiliate of a bank holding company having banking offices in Georgia.

A Georgia lawyer who is not principally engaged in negotiating mortgage loans, when services are
rendered in the course of the lawyer’s practice.

A real estate broker or salesperson not actively engaged in negotiating mortgage loans, provided he or she
received no compensation.

Any person acting under court order.

Any natural person or the estate or trust of a natural person making a mortgage loan with his or her own
funds for personal investment including a person or the estate or trust of the person who makes a purchase
money mortgage for financing sales of his or her own property.

The United States, the State of Georgia or any state or government agency thereof including, without
limitation, the Georgia Housing and Finance Authority, Georgia Development Authority, FNMA, FHLMC,
GNMA, HUD, FHA, VA, FMHA, the Federal Land Banks and Production Credit Associations.

Any person who makes a mortgage loan to an employee as an employee benefit.

Any licensee under the Georgia Industrial Loan Act, provided the mortgage loan is for $3,000 or less.

Nonprofit corporations making mortgage loans to promote home ownership or improvements for the
disadvantaged.

A natural person employed by a licensed mortgage lender or broker or any other person exempt from
licensing when acting as an employee and under the supervision of the license or exempt person. (To be
exempt the natural person must be employed by only one such employer.)

80-11-4-.03 Licensing Requirements; Employee Exemption.

(1) The exemption from licensing provided pursuant to O.C.G.A. Section 7-1-1001(a)(11) to an employee of a licensee or exemptee applies only to natural persons who meet all of the following criteria:

(a) An employee must be employed by just one licensee and work exclusively for that licensee;

(b) An employee may not solicit, process, or place loans for anyone else while claiming the exemption;

(c) An employee's procedures and activities must be supervised by the licensee on a daily basis, and the licensee is responsible for the actions of such employees. This requirement is intended to make it clear that employers control and are accountable for the actions of their employees; and

(d) An employee may not be paid or compensated for performance of mortgage activity on a 1099 form.

Authority O.C.G.A. Section 7-1-1012.

Any natural person who makes five or fewer mortgage loans in any one calendar year.

Any person who purchases mortgage loans from a mortgage lender or broker solely as an investment and
who is not in the business of brokering, making, purchasing or servicing mortgage loans.

Lenders and brokers claiming an exemption (a “registrant”) must register with the Banking Department.

(O.C.G.A. §7-1-1001, O.C.G.A. §7-1-1002)

INITIAL APPLICATION

Application must be in writing on a form prescribed by the Banking Department, under oath and must
include:

- The legal name and address of the applicant, and if the applicant is a partnership, association or
corporation, the legal name, residence and business address of every member, director and officer.

- The legal name under which applicant will conduct business.

- The address of the main office or principal place of business where books and records are located and
any other locations at which the applicant will engage in any business activity and the mailing address
where the department is to send all correspondence, orders, or notices. (Any changes in the mailing
address must be delivered in writing to the department before the change is effective.)

- The complete address of initially registered agent and office.

- The general plan and character of the business.

- An audited financial statement of the applicant prepared by an independent CPA or Georgia registered
public accountant covering the most recent fiscal year.

- Other information as the Banking Department may require with respect to the applicant, its directors,
trustees, officers, members, agents or ultimate equitable owners of 10 percent or more.

(O.C.G.A. §7-1-1003, O.C.G.A. §7-1-1004)

Must have and maintain a verifiable tangible net worth of $250,000, or such greater amount as the Banking
Department shall require, as shown by audited financial statements.

If the applicant’s verifiable net worth is greater than $100,000 but less than $250,000, the applicant may still
obtain a license provided that the applicant:

- Certifies that it will transfer or assign all mortgage loans funded with its own funds, including but not
limited to draws on a warehouse line of credit, to another mortgage lender prior to the due date of the first
payment by the borrower but in no event later than 45 days after the date of funding.

- Submits audited financial statements prepared by an independent CPA establishing that the lender has a
verifiable net worth of at least $100,000.

- Submits a corporate surety bond of $100,000.

- Submits evidence of its approval to participate as a mortgage loan correspondent in the mortgage
insurance programs administered by HUD.

- Whenever principal sum of the bond falls below the required amount, licensee must obtain a new or
additional bond so that the aggregate amount of the bonds meets the statutory requirements.

- Licensee may not cancel bond without first notifying the Banking Department by either certified or
registered mail 30 days prior to the date of cancellation.

(O.C.G.A. §7-1-1004, O.C.G.A. §7-1-1007)

Decision to grant or deny license will be made within 90 days after receipt of a completed application and
payment of all applicable fees.

(O.C.G.A. §7-1-1004)

Each licensee will be subject to an examination by the Banking Department at least once every 24 months.

Additional examinations may be conducted when deemed necessary.

(O.C.G.A. §7-1-1009)

RENEWAL

All licenses and registrations expire annually on December 31.

Applications for renewal must be made on or before October 1 of each year.

- Failure to submit renewal application by October 1 may require payment of a fine determined by the
Banking Department.

Applicant who submits required application, documents and fees for renewal shall be permitted to continue
to conduct business if disposition is not made prior to January 1 pending final approval or disapproval.

(O.C.G.A. §7-1-1005)

STATE FEES AND CHARGES 3

Financial institutions must pay an assessment, calculated by the Banking Department, on or before
January 31 of each year.

l Lenders subject to a license renewal fee of $800, plus $25 for each additional office located in Georgia that
conducts lending activity.

l Mortgage lenders required to register must pay an annual registration fee of $800.

(G.C.R.R. 80-5-1-.01)

l Application for branch office must be accompanied by nonrefundable fee of $350.

(O.C.G.A. §7-1-1006)

l $30 processing fee due with each application for initial or renewal license or registration for each set of
fingerprint cards.

(G.C.R.R. 80-5-1-.04)

l Nonrefundable investigation fee of $250 for applicants for licenses or registration.

l Applicant for a review of change or control of ownership of a licensee must pay a $250
investigation/application fee.

(G.C.R.R. 80-5-1-.03)

l No investigation fees are to be charged for the renewal process.

(O.C.G.A. §7-1-1005)

l Examination fee is $65 per hour with a minimum of $500 per examination:

- The minimum fee may be waived if the examination is conducted in conjunction with another ongoing
examination or if the minimum charge clearly exceeds the hours spent on the examination.

- Licensees must pay the actual cost of out-of-state examinations, including personnel costs,
transportation costs, meals, lodging and other incidental expenses, to the extent that these expenses
exceed $65 per hour.

(G.C.R.R. 80-5-1-.03)

l Licensees and registrants must collect a $6.50 closing fee to be paid to the Banking Department for each
mortgage loan closed and the fee shall be paid by the borrower at the time of closing of the mortgage loan.

- Fees are payable to the Banking Department on a semiannual basis.

- Fees for the period January 1 through June 30 of each year must be remitted to the Banking Department
no later than the first business day of September of each year.

- Fees for the period July 1 through December 31 of each year must be remitted no later than the first
business day of March of each year.

- The fee statement must be in a format substantially similar to the following:

GEORGIA RESIDENTIAL MORTGAGE ACT

FEE STATEMENT

SEMIANNUAL FEE STATEMENT OF PER LOAN FEES

1. Name of Remitter:

2. Fee Statement For Period: ____________________ through ____________________

3. Mortgage Lender or Broker License Number (if applicable):

4. Mortgage Lender or Broker Registration Number (if applicable):

5. Number of Mortgage Loans (covered by Article 13) Closed During Reporting Period:

6. Total Dollar Amount Enclosed: $____________________

(O.C.G.A. §7-1-1011; G.C.R.R. 80-5-1-.04)

l Hearing charge of $300 or the actual charge of nondepartmental personnel.

(G.C.R.R. 80-5-1-.05)

DENIAL, SUSPENSION AND REVOCATION

l License may be denied or revoked if:

- Applicant or licensee employs any person subject to a cease and desist order within the 12 preceding
months concerning prohibited acts under Sec. 7-1-1013, not having a required license or the revocation of
a license.

- Applicant or licensee or their officers, directors, partners, agents, employees or ultimate equitable owners
of ten percent have been convicted of a felony involving moral turpitude.

l License may be denied or restricted if:

- Applicant or any officer, director, partner, agent, employee or ultimate equitable owner of ten percent of
applicant has had license denied, revoked or suspended within one year of the application.

(O.C.G.A. §7-1-1004)

l License may be suspended or revoked if:

- The licensee fails to notify the Banking Department prior to removing books, records and accounts from
the principal place of business.

- The licensee fails to maintain the required records.

- The licensee fails to permit an examination or investigation of a licensee’s or registrant’s books, accounts
or records.

(G.C.R.R. 80-11-2-.01, G.C.R.R. 80-11-2-.02)

- The licensee fails to provide fees on a timely basis, pay within 30 days after it becomes final, a judgment
recovered in any court within Georgia by a claimant or creditor in an action arising out of the licensee’s or
registrant’s business in Georgia as a lender or broker.

- The licensee violates any provision of the Georgia Residential Mortgage Act or any regulation
promulgated thereunder.

- Any ground exists that would enable the department to refuse to issue an original license or registration.

- Failure to comply with orders for child support, or default under a guaranteed educational loan under
Sec. 20-3-295.

(O.C.G.A. §7-1-1017)

- The licensee fails to maintain the mortgage loan journal or to keep the journal current.

(G.C.R.R. 80-11-2-.03)

l An applicant, licensee or registrant may request a hearing in writing within 20 days after the denial,
suspension or revocation of a license.

(O.C.G.A. §7-1-1017)

MISCELLANEOUS

l License must be posted in a conspicuous location at each place of business and must include the address
of the principal place of business in Georgia and the name of the licensee.

l Licenses may not be either transferred or assigned.

l Licensee may not transact business under any name other than that designated in the license.

l Licensee may not open additional offices without prior approval of the Banking Department.

- Application for the additional office must be in writing on a form prescribed by the Banking Department.

- Application for the additional office will be deemed approved if notice of disapproval is not received
within 30 days from the date the application is received.

- Applicant must give written notice to the Banking Department within ten days of the commencement of
business at the additional office.

(O.C.G.A. §7-1-1006)

l No person may directly or indirectly acquire 25 percent or more of the ownership of a licensee without first:

- Filing an application with the Banking Department.

- Providing the Banking Department with requested information concerning the financial responsibility,
background, experience and activities of the applicant and any existing or proposed directors, officers or
members.

- Paying the application fee prescribed by the Banking Department.

l Application for the acquisition of 25 percent or more of the ownership of a licensee must be granted or
denied within 60 days from the date of the completed application unless the period is extended by an order
reciting the reasons for the extension.

- Upon denial, applicant must be informed of the reasons why the application was not accepted.

- Exemptions:

- The acquisition of an interest in a licensee directly or indirectly including an acquisition by merger or
consolidation by a person licensed or otherwise exempt under the Georgia Residential Mortgage Act.

- The acquisition of an interest in a licensee directly or indirectly including an acquisition by merger or
consolidation by or with a person affiliated through common ownership with the licensee.

- The acquisition of an interest in a licensee by a person by operation of law, bequest, descent or
survivorship.

- The exempt party must send written notice to the Banking Department within 30 days from the date
the transaction is closed.

(O.C.G.A. §7-1-1008)

3 Banking Department may discount or surcharge the supervision or license fees in order to assure funding of
annual appropriations by the General Assembly. (G.C.R.R. 80-5-1-.01)