NORTH CAROLINA MORTGAGE BROKER REGISTRATION REQUIREMENTS
NORTH CAROLINA MORTGAGE LENDER REGISTRATION REQUIREMENTS
Any lender authorized to engage in business as a bank, a farm credit system, life insurance company, savings institution or credit union, under the laws of the United States or the State of North Carolina and subsidiaries and affiliates of such lenders, which subsidiaries and affiliates are subject to the general supervision or regulation of the lender or subject to audit or examination by a regulatory body or agency of the United States or the State of North Carolina.
The officers and employees of the above entities.
Any licensed real estate agent or broker, who is performing those activities subject to the regulation of the North Carolina Real Estate Commission and who does not receive direct compensation or income in connection with the placement of a mortgage loan.
Any person who as a seller receives in one calendar year ten or less mortgages, deeds of trust or other security instruments on real estate as security for a purchase money obligation within any calendar year.
The North Carolina Housing Finance Agency.
Any agency of the Federal Government or any state or municipal government granting first mortgage loans under specific authority of the laws of any state or the United States. (N.C.G.S. §53-234)
A mortgage banker (one who for compensation or gain directly or indirectly advances or offers to advance, or makes a commitment to advance funds to an applicant for a mortgage loan) must first register with the Commissioner of Banking (the "Commissioner").
Application must be in writing, under oath and on a form prescribed by the Commissioner.
-If sole proprietor, must include the name and complete business and residential addresses of the applicant.
-If a partnership, association, corporation or other form of business organization, must include the names and complete business and residential addresses of each member, director and principal officer.
-If the applicant wants to register as a lender and a broker, must state such on the application.
Must include an affirmation of financial solvency which reflects each of the capitalization requirements established by the Commissioner.
To extent required by the Commissioner, must include description of business activities, financial responsibility, educational background and general character and fitness of the applicant including:
-Audited financial statement for the previous accounting period.
-Copies of the articles of incorporation or partnership agreement.
-Certificate of Existence or Certificate of Good Standing, not more than 90 days old, from the applicant's state of incorporation, if applicable.
-Certificate of Authority to do business in North Carolina, if applicable.
-Copy of the applicant's Certificate of Assumed Name, if applicable.
-A statement authorizing the Commissioner to run a credit report on the applicant.
-Disclosure of any criminal proceedings pending against or criminal convictions entered against the applicant, its partners, directors, principal officers or controlling persons.
-Disclosure of any civil proceedings pending against or civil judgments entered against the applicant, its partners, directors, principal officers or controlling persons which involve fraud or dishonesty.
-Disclosure of any civil judgments entered against the applicant, its partners, directors, principal officers or controlling persons during the past ten years which have remained partially or completely unpaid.
-Disclosure of bankruptcy proceedings, assignment for the benefit of creditors, receivership, conservatorship or similar proceedings.
-Disclosure of federal or state agency proceedings against applicant or its partners, directors, principal officers or controlling persons which involve licensure or business activities as a mortgage lender.
-Disclosure of any judgments entered by any state or federal administrative agency against the applicant, its partners, directors, principal officers or controlling persons which involve fraud, dishonesty or reflect on the applicants' character and fitness to command the confidence of the public.
-Description of the applicant's business operations and organizational structure.
-The addresses at which the applicant intends to engage in business as a mortgage lender, including branch offices and the name of the manager at each branch office.
-Description of the business experience, current business activities and education of the applicant's partners, directors, principal officers and controlling persons.
-Evidence of compliance with experience requirements.
-Three business references, including one bank reference.
-Where applicable, the names and business addresses of all lenders whom the applicant is authorized to represent (and a copy of each agency agreement).
An application for registration as a lender or broker whose only activity is table funding must include one of the following:
-A surety bond for $25,000.
-An irrevocable letter of credit for $25,000.
-A pledge of securities for $25,000.
A registrant must notify the Commissioner within 30 days of any material changes to information (1) submitted during the application process, (2) submitted upon the filing of the annual statement or (3) otherwise filed with the Commissioner.
-The term "material" means any information that would be likely to influence the granting, revocation or expiration of a Certificate of Registration and includes, but is not limited to, the following:
-Changes in the registrant's corporate officers, partners or business structure.
-Changes in the address of the registrant's main or branch offices and any names under which the registrant operates.
Lenders must maintain one of the following:
-Net worth of at least $250,000 and a surety bond for $25,000 obtained from a company authorized to do business in North Carolina.
-Net worth must be computed in accordance with generally accepted accounting principles and evidence of compliance with this rule must be reported annually on a balance sheet audited in accordance with generally accepted accounting principles and generally accepted auditing standards.
-A surety bond for $100,000 obtained from a company authorized to do business in North Carolina.
-An irrevocable letter of credit for $100,000 obtained from a bank or insurance company authorized to do business in North Carolina.
-A pledge of securities, as detailed below, having a par value of $100,000.
-General obligations of or fully guaranteed by the United States or of any agency or instrumentality of or corporation wholly owned by the United States directly or indirectly.
-Direct general obligations of North Carolina, or of any county, city, town or other political subdivision or municipal corporation of North Carolina.
-If a lender wants to rely on the capital of its parent, it must provide the following for each year:
-A balance sheet, audited in accordance with generally accepted accounting principles and generally accepted auditing standards, of the parent showing a net worth of at least $500,000 as of the close of its most recent fiscal year.
-A binding written commitment from the parent to the lender to make a minimum of $250,000 available to the lender in connection with its mortgage banking activities.
-A lender must notify the Commissioner in writing within seven days of the discovery that the lender does not meet any of the above requirements.
Lenders and brokers whose only activity is table funding must post a surety bond for $25,000.
A broker must notify the Commissioner in writing within seven days of the discovery that the broker does not meet this requirement.
-If the lender is a sole proprietor, must have at least three years of experience in residential mortgage lending.
-If the lender is a general or limited partnership, at least one of the general partners must have at least three years of experience in residential mortgage lending.
-If the lender is a corporation, at least one of the principal officers must have at least three years experience in residential mortgage lending.
Incomplete application files may be closed and deemed denied without prejudice when the applicant has not submitted information requested by the Commissioner within 30 days of request. (N.C.G.S. §53-235, §53-236; 4NCAC. 3I.0201, .0204, .0205, .0206, .0301, .0303, .0305, .0401, .0501, .0503, 0702)
STATE FEES AND CHARGES
$500 initial application fee.-No change in fee where applicant seeks to be both a lender and a broker.
$250 renewal fee payable on or before December 31 of each year.
The Commissioner will fully refund any annual registration fees paid if the application is denied.(N.C.G.S. §53-236, §53-242)
Commissioner may investigate the actions of a registrant when there exists reason to believe that the registrant has violated any law or regulation of the United States or North Carolina.(4NCAC 3I.0603)
Certificate shall state the address or addresses at which the business is to be conducted, the registrant's name and the date of registration.
Certificate must be prominently located in each place of business within the state and at any offices outside the state where mortgage loans are originated or made on residential property as defined in N.C.G.S. Section 53-234(1) and (2).
A registrant must notify the Commissioner of the opening of any branch office, a change in the name under which it operates or a change in the address of its principal office and any branch office at least 30 days prior to the effective date of the change.
-Must pay a certificate reissuance fee of $25.
-Registrant must surrender its former registration.
Certificates may not be transferred or assigned.
-A change in the registrant's organizational structure will constitute a transfer or assignment of the Certificate of Registration including, but not limited to, the following circumstances:
-If the registrant is a corporation, a change in ownership of 50 percent or more of the registrant's stock or the conversion of the corporation into a general or limited partnership or sole proprietorship.
-If the registrant is a general or limited partnership, a change in one of the registrant's general partners, the conversion of the general partnership into a limited partnership, corporation or sole proprietorship or the conversion of the limited partnership into a general partnership, corporation or sole proprietorship.
-If the registrant is a sole proprietor, the conversion of the sole proprietorship into a general or limited partnership or corporation, or the sale of all of the assets of the registrant's business to another person.
-Upon a change in the organization, as described above, the Certificate of Registration is void and the registrant must surrender it to the Commissioner within 30 days of the change.(N.C.G.S. §53-237; 4NCAC 3I .0306, .0406)
A lender or broker who engages solely in table funding must deposit all third-party fees and refundable fees in a segregated account in a federally insured financial institution, used exclusively for third-party fees and refundable fees within seven business days of receipt of the funds.
-Account must be reconciled monthly and the reconciliation must be kept for THREE years.(4NCAC 3I.0403)
A person who negotiates real estate loans using funds belonging to his loan correspondents is subject to real estate license tax. (17NCAC 4B .3301)