Source: http://usloanmodificationlaw.com/north-carolina
Timestamp: 2017-06-27 12:01:29
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Matched Legal Cases: ['§ 14', '§ 14', '§ 53', '§ 53', '§ 53', '§ 53', '§ 66', '§ 66', '§ 14', '§ 14', '§ 53', '§ 1841', '§ 202', '§ 53', '§ 1841', '§ 2605', '§ 202', '§ 53', '§ 53', '§ 53', '§ 53', '§ 53', '§ 53', '§ 53', '§ 53', '§ 53', '§ 53', '§ 53', '§ 53', '§ 53', '§ 53', '§ 53', '§ 53', '§ 53', '§ 53', '§ 53', '§ 53', '§ 53', '§ 53', '§ 53', '§ 53', '§ 53', '§ 53', '§ 53', '§ 53', '§ 66', '§ 66', '§ 66', '§ 66', '§ 66', '§ 66', '§ 66', '§ 66']

STATE OF NORTH CAROLINA - USLoanModificationLaw.com
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The State of North Carolina does not require a license for loan modifications, however it does require a license for anyone who brokers a mortgage.
North Carolina General Statutes Chapter 14, Article 156 deals with Debt Adjusting(attached as Schedule A).
§ 14‑424 states that engaging in debt adjusting is a misdemeanor.
§ 14‑423(2) states that “Debt adjusting also includes the business or practice of debt settlement or foreclosure assistance whereby any person holds himself or herself out as acting for consideration as an intermediary between a debtor and the debtor’s creditors for the purpose of reducing, settling, or altering the terms of the payment of any debt of the debtor, whether or not the person distributes the debtor’s funds or property among the creditors, and receives a fee or other consideration for reducing, settling, or altering the terms of the payment of the debt in advance of the debt settlement having been completed or in advance of all the services agreed to having been rendered in full.”
As stated in the Mortgage Lending Act, North Carolina General Statutes Chapter 53, Article 19A, licensed individuals are subject to the act. (attached as Schedule B).
§ 53‑243.02 states that it is unlawful for any person to act as a mortgage broker in the state without a license
§ 53‑243.01 states that the act applies to anyone who acts as a mortgage broker, defined as anyone who “act[s], for compensation or gain, or in the expectation of compensation or gain, either directly or indirectly, by accepting or offering to accept an application for a mortgage loan, soliciting or offering to solicit a mortgage loan, negotiating the terms or conditions of a mortgage loan, issuing mortgage loan commitments or interest rate guarantee agreements to borrowers, or engaging in tablefunding of mortgage loans, whether such acts are done through contact by telephone, by electronic means, by mail, or in person with the borrowers or potential borrowers.”
§ 53‑243.01(8) lists individuals exempt from the license, but none of the exemptions appear applicable.
§ 53‑243.14 states that acting without a license is a class 1 criminal felony, each action a separate offense
Chapter 66, Article 20, § 66‑108(c) (attached as Schedule B) states that “No loan broker shall collect any advance fee or other valuable consideration from a borrower prior to the closing of the loan.”
§ 66‑107(c) states that a written contract is required and includes a disclosure form which must be given to the client.
North Carolina Compiled Statutes
Chapter 14, Article 14, Debt Adjusting
Mortgage Lending Act:
Advance fee and contract requirement:
§ 14‑424. Engaging, etc., in business of debt adjusting a misdemeanor.
§ 14‑425. Enjoining practice of debt adjusting; appointment of receiver for money and property employed.
The superior court shall have jurisdiction, in an action brought in the name of the State by the Attorney General or the district attorney of the prosecutorial district as defined in G.S. 7A‑60, to enjoin, as an unfair or deceptive trade practice, the continuation of any debt adjusting business or the offering of any debt adjusting services. The Attorney General or the district attorney who brings an action under this section may appoint a receiver for the property and money employed in the transaction of business by such person as a debt adjuster, to ensure, so far as may be possible, the return to debtors of so much of their money and property as has been received by the debt adjuster, and has not been paid to the creditors of the debtors. The court may also assess civil penalties under G.S. 75‑15.2 and award attorneys’ fees to the State under G.S. 75‑16.1. (1963, c. 394, s. 3; 1973, c. 47, s. 2; 1987 (Reg. Sess., 1998), c. 1037, s. 49; 2005‑408, s. 3; 2007‑79, s. 1.)
§ 53‑243.01. (Effective until January 1, 2009) Definitions.
(2a) Affiliate. – Any 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. § 1841), et seq., as amended from time to time. For purposes of this subdivision, the term control means ownership of all of the voting stock or comparable voting interest of the controlled person.
(2b) Affiliated mortgage banker. – A licensed mortgage banker that meets the criteria of either sub‑subdivisions a., b., and c. of this subdivision or sub‑subdivisions d. and e. of this subdivision:
(3) Branch manager. – The individual whose principal office is physically located in, who is in charge of, and who is responsible for the business operations of a branch office of a mortgage broker or mortgage banker.
(4) Branch office. – An office of the licensee acting as a mortgage broker or mortgage banker that is separate and distinct from the licensee’s principal office.
(5) Commissioner. – The North Carolina Commissioner of Banks and the Commissioner’s designees. For purposes of compliance with this Article by credit unions, Commissioner means the Administrator of the Credit Union Division of the Department of Commerce.
(6) Control. – Except as provided in subdivision (2a) of this section, “control” means the power to vote more than twenty percent (20%) of outstanding voting shares or other interests of a corporation, partnership, limited liability company, association, or trust.
(7) Employee. – An individual, who has an employment relationship, acknowledged by both the individual and the mortgage broker or mortgage banker and is treated as an employee for purposes of compliance with the federal income tax laws.
(7a) Exclusive mortgage broker. – An individual who acts as a mortgage broker exclusively for a single mortgage banker or single exempt person and who is licensed under the provisions of G.S. 53‑243.05(c)(1a).
(8) Exempt person. – The term includes any of the following:
a. Any agency of the federal government or any state or municipal government granting mortgage loans under specific authority of the laws of any state or the United States.
c. Any person authorized to engage in business as a bank or a wholly owned subsidiary of a bank, a farm credit system, savings institution, or a wholly owned subsidiary of a savings institution, or credit union or a wholly owned subsidiary of a credit union, under the laws of the United States, this State, or any other state. Except for G.S. 53‑243.11 and G.S. 53‑243.15, this Article does not apply to the exempt persons set forth in this sub‑subdivision (8)c.
f. Any person who, as seller, receives in one calendar year no more than five mortgages, deeds of trust, or other security instruments on real estate as security for a purchase money obligation.
h. Any nonprofit corporation qualifying under section 501(c)(3) of the Internal Revenue Code which makes mortgage loans to promote home ownership or home improvements for the disadvantaged, provided that such corporation is not primarily in the business of soliciting or brokering mortgage loans.
(9) Licensee. – A loan officer, limited loan officer, mortgage broker, or mortgage banker who is licensed pursuant to this Article.
(10) Loan officer. – An individual who, in exchange for compensation as an employee of another person, accepts or offers to accept applications for mortgage loans. The definition of loan officer shall not include any exempt person described in sub‑subdivision (8)b. of this section.
(10a) Limited loan officer. – An individual who, in exchange for compensation as an employee of an affiliated mortgage banker, directly solicits, negotiates, offers, or makes commitments for mortgage loans. The definition of limited loan officer shall not include any exempt person described in sub‑subdivision (8)b. of this section.
(11) Make a mortgage loan. – To close a mortgage loan, to advance funds, to offer to advance funds, or to make a commitment to advance funds to a borrower under a mortgage loan.
(13) Mortgage banker. – A person who acts as a mortgage lender as that term is defined in subdivision (2) of this section. However, the definition does not include a person who acts as a mortgage lender only in tablefunding transactions.
(14) Mortgage broker. – A person who acts as a mortgage broker as that term is defined in subdivision (1) of this section. The term “mortgage broker” includes an exclusive mortgage broker, except when expressly provided otherwise.
(15) Mortgage loan. – A loan made to a natural person or persons primarily for personal, family, or household use, primarily secured by either a mortgage or a deed of trust on residential real property located in North Carolina.
(15a) Parent. – The person that controls an affiliated mortgage banker, as control is defined in subdivision (2a) of this section.
(16) Person. – An individual, partnership, limited liability company, limited partnership, corporation, association, or other group engaged in joint business activities, however organized.
(17) Qualified lender. – A person 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.
(18) Qualified person. – A person who is employed as a loan officer by a qualified lender, or by a mortgage banker or broker registered with the Commissioner under former Article 19 of this Chapter, or who is a general partner, manager, or officer of a qualified lender, registered mortgage banker, or registered mortgage broker.
(19) Residential real property. – Real property located in the State of North Carolina upon which there is located or is to be located one or more single‑family dwellings or dwelling units.
(20) Tablefunding. – A transaction where a licensee closes a loan in its own name with funds provided by others, and the loan is assigned simultaneously to the mortgage lender providing the funding within one business day of the funding of the loan. (2001‑393, s. 2; 2002‑169, ss. 1, 2; 2005‑316, s. 1.)
§ 53‑243.01. (Effective January 1, 2009) Definitions.
(4) Affiliate. – Any 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. § 1841), et seq., as amended from time to time. For purposes of this subdivision, the term control means ownership of all of the voting stock or comparable voting interest of the controlled person.
(5) Affiliated mortgage banker. – A licensed mortgage banker that meets the criteria of either sub‑subdivisions a., b., and c. of this subdivision or sub‑subdivisions d. and e. of this subdivision:
(6) Branch manager. – The individual whose principal office is physically located in, who is in charge of, and who is responsible for the business operations of a branch office of a mortgage broker or mortgage banker.
(7) Branch office. – An office of the licensee acting as a mortgage broker or mortgage banker that is separate and distinct from the licensee’s principal office. A branch office shall not be located at an individual’s home or residence.
(8) Commissioner. – The North Carolina Commissioner of Banks and the Commissioner’s designees. For purposes of compliance with this Article by credit unions, Commissioner means the Administrator of the Credit Union Division of the Department of Commerce.
(9) Control. – The power, directly or indirectly, to direct the management or policies of a company, whether through ownership of securities, by contract, or otherwise. Any person that (i) is a director, general partner, or executive officer; (ii) directly or indirectly has the right to vote ten percent (10%) or more of a class of a voting security or has the power to sell or direct the sale of ten percent (10%) or more of a class of voting securities; (iii) in the case of a Limited Liability Company, is a managing member; or (iv) in the case of a partnership, has the right to receive upon dissolution, or has contributed, ten percent (10%) or more of the capital, is presumed to control the company.
(10) Employee. – An individual, who has an employment relationship, acknowledged by both the individual and the mortgage broker or mortgage banker or mortgage servicer and is treated as a common law employee for purposes of compliance with the federal income tax laws and whose income is reported on IRS Form W‑2.
(11) Exclusive mortgage broker. – An individual who acts as a mortgage broker exclusively for a single mortgage banker or single exempt person and who is licensed under the provisions of G.S. 53‑243.05(c)(1a).
(12) Exempt person. – The term includes any of the following:
c. Any person authorized to engage in business as a bank or a wholly owned subsidiary of a bank, a farm credit system, savings institution, or a wholly owned subsidiary of a savings institution, or credit union or a wholly owned subsidiary of a credit union, under the laws of the United States, this State, or any other state. Except for G.S. 53‑243.11 and G.S. 53‑243.15, this Article does not apply to the exempt persons set forth in this sub‑subdivision.
f. Any person who, acting as seller and lender and servicer in a residential real estate transaction, receives and services in one calendar year no more than five purchase money notes secured by mortgages, deeds of trust, or other security instruments on the real estate sold as security for the purchase money obligation.
k. A mortgage banker licensed under this Article and any employee of a mortgage banker licensed under this Article are exempt from the requirement to obtain a separate license as a mortgage servicer, provided, however, that all provisions of this Article applicable to mortgage servicers are applicable to any mortgage banker or any employee of a mortgage banker acting as a mortgage servicer, except as provided in G.S. 53‑243.15(c).
(13) Licensee. – A loan officer, limited loan officer, mortgage broker, mortgage banker, or mortgage servicer who is licensed pursuant to this Article.
(14) Loan officer. – An individual who, in exchange for compensation as an employee of another person, accepts or offers to accept applications for mortgage loans, or who solicits or offers to solicit a mortgage loan, negotiates the terms or conditions of a mortgage loan, issues mortgage loan commitments or interest rate guarantee agreements to borrowers, whether such acts are done through contact by telephone, by electronic means, by mail, or in person with the borrowers or potential borrowers. The definition of loan officer shall not include any exempt person described in sub‑subdivision (12)b. of this section.
(15) Limited loan officer. – An individual who, in exchange for compensation as an employee of an affiliated mortgage banker, directly solicits, negotiates, offers, or makes commitments for mortgage loans. The definition of limited loan officer shall not include any exempt person described in sub‑subdivision (12)b. of this section.
(16) Make a mortgage loan. – To close a mortgage loan, to advance funds, to offer to advance funds, or to make a commitment to advance funds to a borrower under a mortgage loan.
(17) Mortgage banker. – A person who acts as a mortgage lender as that term is defined in subdivision (2) of this section. However, the definition does not include a person who acts as a mortgage lender only in tablefunding transactions.
(18) Mortgage broker. – A person who acts as a mortgage broker as that term is defined in subdivision (1) of this section. The term “mortgage broker” includes an exclusive mortgage broker, except when expressly provided otherwise.
(19) Mortgage loan. – A loan made to a natural person or persons primarily for personal, family, or household use, primarily secured by either a mortgage or a deed of trust on residential real property located in North Carolina.
(20) Mortgage servicer. – A person who directly or indirectly acts as a mortgage servicer as that term is defined in subdivision (3) of this section or who otherwise meets the definition of “servicer” in RESPA, 12 U.S.C. § 2605(i), with respect to mortgage loans.
(21) Parent. – The person that controls an affiliated mortgage banker, mortgage broker, or mortgage servicer, as control is defined in subdivision (4) of this section.
(22) Person. – An individual, partnership, limited liability company, limited partnership, corporation, association, or other group engaged in joint business activities, however organized.
(23) Qualified lender. – A person 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.
(24) Qualified person. – A person who is employed as a loan officer by a qualified lender, or by a mortgage banker or broker registered with the Commissioner under former Article 19 of this Chapter, or who is a general partner, manager, or officer of a qualified lender, registered mortgage banker, or registered mortgage broker.
(27) Residential real property. – Real property located in the State of North Carolina upon which there is located or is to be located one or more single‑family dwellings or dwelling units.
(29) Tablefunding. – A transaction where a licensee closes a loan in its own name with funds provided by others, and the loan is assigned simultaneously to the mortgage lender providing the funding within one business day of the funding of the loan. (2001‑393, s. 2; 2002‑169, ss. 1, 2; 2005‑316, s. 1; 2008‑228, s. 1.)
§ 53‑243.02. (Effective until January 1, 2009) License required; licensee records.
(a) Other than an exempt person, it is unlawful for any person in this State to act as a mortgage broker or mortgage banker, or directly or indirectly to engage in the business of a mortgage broker or a mortgage banker, without first obtaining a license from the Commissioner under the provisions of this Article.
(b) It is unlawful for any natural person to engage in the solicitation and acceptance of applications for mortgage loans without first obtaining a license as a loan officer, limited loan officer, mortgage banker, or mortgage broker issued by the Commissioner under the provisions of this Article. It is unlawful for any person to employ, to compensate, or to appoint as its agent a loan officer unless the loan officer is licensed as a loan officer under this Article. Exempt persons shall not be subject to this subsection.
(c) The license of a loan officer or limited loan officer is not effective during any period when that person is not employed by a mortgage broker, affiliated mortgage banker, or mortgage banker licensed under this Article. The license of an exclusive mortgage broker is not effective during any period when that person is not authorized to act as a single licensee or exempt person pursuant to G.S. 53‑243.05(c)(1a).
When a loan officer or a limited loan officer ceases to be employed by a mortgage broker, affiliated mortgage banker, or mortgage banker licensed under this Article, the loan officer, limited loan officer, and the mortgage broker, affiliated mortgage banker, or mortgage banker licensed under this Article by whom that person is employed shall promptly notify the Commissioner in writing. When the authority of an exclusive mortgage broker to act on behalf of the principal licensee or exempt person identified in G.S. 53‑243.05(c)(1a) has been terminated, the exclusive mortgage broker and the licensee or exempt person for whom the exclusive mortgage broker is an agent shall promptly notify the Commissioner in writing. The mortgage broker, affiliated mortgage banker, mortgage banker, or exempt person’s notice shall include a statement of the specific reason or reasons for, as applicable, the termination of the loan officer’s or limited loan officer’s employment or exclusive mortgage broker’s authority.
A loan officer or limited loan officer shall not be employed simultaneously by more than one affiliated mortgage banker, mortgage broker, or mortgage banker licensed under this Article.
(d) Each affiliated mortgage banker, mortgage broker, and mortgage banker licensed under this Article shall maintain on file with the Commissioner a list of all loan officers or limited loan officers who are employed with the affiliated mortgage banker, mortgage broker, or mortgage banker.
(e) No person, other than an exempt person, shall hold himself or herself out as a mortgage banker, an affiliated mortgage banker, a mortgage broker, limited loan officer, or loan officer unless such person is licensed in accordance with this Article.
(2) The loan officer is employed by a licensed mortgage broker or mortgage banker, and the managing principal of such mortgage broker or mortgage banker (i) certifies to the Commissioner in writing that the managing principal reasonably believes that the application of the person for licensure as a loan officer meets or exceeds all of the relevant requirements of this Article for licensure and (ii) undertakes in writing that the managing principal and the employer will be responsible for the acts of the applicant during the period that such application is pending; and
(3) The person is currently or has within the six‑month period prior to the date of the application been employed as and acting as a loan officer for an exempt entity which entity is exempt by virtue of an exemption claimed under G.S. 53‑243.01(8)c.
(g) The Commissioner may deny or suspend the rights of a mortgage broker or mortgage banker to employ a loan officer acting under subsection (f) of this section if the Commissioner finds that the mortgage broker or mortgage banker, or the managing principal thereof, makes the certification or undertaking set forth in subdivision (2) of subsection (f) of this section not in good faith. (2001‑393, s. 2; 2004‑171, s. 7; 2005‑316, s. 2.)
§ 53‑243.02. (Effective January 1, 2009) License required; licensee records.
(a) Other than an exempt person, it is unlawful for any person in this State to act as a mortgage broker, mortgage banker, or mortgage servicer, or directly or indirectly to engage in the business of a mortgage broker, mortgage banker, or mortgage servicer, without first obtaining a license from the Commissioner under the provisions of this Article. This Article shall apply to any person who seeks to avoid its application by any direct or indirect device, subterfuge, artifice, or pretense whatsoever.
(2) The loan officer is employed by a licensed mortgage broker or mortgage banker, and the qualifying individual of such mortgage broker or mortgage banker (i) certifies to the Commissioner in writing that the qualifying individual reasonably believes that the application of the person for licensure as a loan officer meets or exceeds all of the relevant requirements of this Article for licensure and (ii) undertakes in writing that the qualifying individual and the employer will be responsible for the acts of the applicant during the period that such application is pending; and
(3) The person is currently or has within the six‑month period prior to the date of the application been employed as and acting as a loan officer for an exempt entity which entity is exempt by virtue of an exemption claimed under G.S. 53‑243.01(12)c.
(g) The Commissioner may deny or suspend the rights of a mortgage broker or mortgage banker to employ a loan officer acting under subsection (f) of this section if the Commissioner finds that the mortgage broker or mortgage banker, or the qualifying individual thereof, makes the certification or undertaking set forth in subdivision (2) of subsection (f) of this section not in good faith. (2001‑393, s. 2; 2004‑171, s. 7; 2005‑316, s. 2; 2008‑228, s. 2.)
§ 53‑243.03. Review by Banking Commission.
The Banking Commission may review any rule, regulation, order, or article of the Commissioner adopted pursuant to or with respect to the provisions of this Article, and any person aggrieved by any rule, regulation, order, or article may appeal to the Banking Commission for review upon giving notice in writing 20 days after the rule, regulation, order, or article that is the subject of the complaint is adopted or issued. Notwithstanding any other provision of law, any party aggrieved by a decision of the Banking Commission shall be entitled to an appeal pursuant to G.S. 53‑92. (2001‑393, s. 2.)
§ 53‑243.04. Rule‑making authority.
The Commissioner may adopt any rules that the Commissioner deems necessary to carry out the provisions of this Article, to provide for the protection of the borrowing public, to instruct mortgage lenders or brokers in interpreting this Article, and to implement and interpret the provisions of G.S. 24‑1.1E, 24‑1.1F, and 24‑10.2 as they apply to licensees under this Article. (2001‑393, s. 2; 2007‑352, s. 6.)
§ 53‑243.05. (Effective until January 1, 2009) Qualifications for licensure; issuance.
(1) The applicant’s name and address and social security number.
(4) The qualifications and business history of the applicant and, if applicable, the business history of any partner, officer, or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the applicant, including: (i) a description of any injunction or administrative order by any state or federal authority to which the person is or has been subject; (ii) a conviction of a misdemeanor involving fraudulent dealings or moral turpitude or relating to any aspect of the residential mortgage lending business; (iii) any felony convictions.
(5) With respect to an application for licensing as a mortgage banker or broker, the applicant’s financial condition, credit history, and business history; and with respect to the application for licensing as a loan officer, the applicant’s credit history and business history.
(6) The applicant’s consent to a federal and State criminal history record check and 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 individual who has control of the applicant or who is the managing principal or a branch manager shall consent to a federal and State criminal history record check and submit a set of that individual’s fingerprints pursuant to this subdivision. 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.
(c) In addition to the requirements under subsection (a) of this section, each applicant for licensure as a mortgage broker or mortgage banker at the time of application and at all times thereafter shall comply with the following requirements:
(d) Each applicant shall identify one person meeting the requirements of subsection (c) of this section to serve as the applicant’s managing principal.
(e) Every applicant for initial licensure shall pay a filing fee not to exceed one thousand two hundred fifty dollars ($1,250) for licensure as a mortgage broker or mortgage banker or sixty‑seven dollars and fifty cents ($67.50) for licensure as a loan officer or limited loan officer, in addition to the actual cost of obtaining credit reports and State and national criminal history record checks.
(f) A mortgage banker shall post a surety bond in the amount of one hundred fifty thousand dollars ($150,000), and a mortgage broker shall post a surety bond in the amount of fifty thousand dollars ($50,000). The surety bond shall be in a form satisfactory to the Commissioner and shall run to the State for the benefit of any claimants against the licensee to secure the faithful performance of the obligations of the licensee under this Article. The aggregate liability of the surety shall not exceed the principal sum of the bond. A party having a claim against the licensee may bring suit directly on the surety bond, or the Commissioner may bring suit on behalf of any claimants, either in one action or in successive actions. Consumer claims shall be given priority in recovering from the bond. Any appropriate deposit of cash or securities shall be accepted in lieu of any bond that is required. An audited financial statement from a qualified lender showing a net worth of two hundred fifty thousand dollars ($250,000) or more shall be accepted in lieu of any bond required.
(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 will be operated honestly and fairly, the Commissioner shall issue a license to the applicant. In addition, for an applicant qualifying as an exclusive mortgage broker, the Commissioner shall determine if the mortgage broker/mortgage banker relationship is in the public interest. (2001‑393, s. 2; 2002‑169, ss. 3‑6; 2004‑171, s. 8; 2005‑316, ss. 3, 4; 2006‑239, s. 1.)
§ 53‑243.05. (Effective January 1, 2009) Qualifications for licensure; issuance.
(1) The applicant’s name and address (including street address, mailing address, e‑mail, and telephone contact information) and social security number or taxpayer identification number.
(4) The qualifications and business history of the applicant and, if applicable, the business history of any partner, officer, or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the applicant, including: (i) a description of any injunction or administrative order by any state or federal authority to which the person is or has been subject; (ii) a conviction, within the past 10 years, of a misdemeanor involving moral turpitude or any fraud, false statement or omission, any theft or wrongful taking of property, bribery, perjury, forgery, counterfeiting, extortion, or conspiracy to commit any of these offenses; or involving any financial service or financial service‑related business; (iii) any felony convictions.
(5) With respect to an application for licensing as a mortgage banker, mortgage broker, or mortgage servicer, the applicant’s financial condition, credit history, and business history; and with respect to the application for licensing as a loan officer, the applicant’s credit history and business history.
(6) The applicant’s consent to a federal and State criminal history record check and 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 individual who has control of the applicant or who is the qualifying individual or a branch manager shall consent to a federal and State criminal history record check and submit a set of that individual’s fingerprints pursuant to this subdivision. 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 qualifying individual or a current or proposed branch manager.
(d) Each applicant shall identify one person meeting the requirements of subsection (c) of this section to serve as the applicant’s qualifying individual.
(e) Every applicant for initial licensure shall pay a filing fee not to exceed one thousand two hundred fifty dollars ($1,250) for licensure as a mortgage broker, mortgage banker, or mortgage servicer or sixty‑seven dollars and fifty cents ($67.50) for licensure as a loan officer or limited loan officer, in addition to the actual cost of obtaining credit reports and State and national criminal history record checks.
(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 will be operated honestly and fairly, the Commissioner shall issue a license to the applicant. In addition, for an applicant qualifying as an exclusive mortgage broker, the Commissioner shall determine if the mortgage broker/mortgage banker relationship is in the public interest. (2001‑393, s. 2; 2002‑169, ss. 3‑6; 2004‑171, s. 8; 2005‑316, ss. 3, 4; 2006‑239, s. 1; 2008‑228, s. 3.)
§ 53‑243.05A. Licensing for limited loan officers; qualifications, revoked, suspended, or barred.
(a) An affiliated mortgage banker shall notify the Commissioner when it hires a limited loan officer on forms prescribed by the Commissioner. The form shall contain any information the Commissioner deems necessary including the name, social security number, address, and business location of the limited loan officer. Limited loan officers employed by an affiliated mortgage banker shall:
(2) Work exclusively for an affiliated mortgage banker. The affiliated mortgage banker who hires the limited loan officer shall:
a. Supervise the limited loan officer as required by this Article.
b. Sign the notification form regarding the hiring of the applicant.
c. Certify the applicant is qualified as a limited loan officer subject to background checks, training, testing, and fundamental education requirements.
d. Be jointly and severally liable for any and all claims and damages of any type, including punitive damages pursuant to Chapter 1D of the General Statutes arising out of the limited loan officer’s mortgage lending activities, as allowed by law.
(b) An applicant for a limited loan officer license may act provisionally as a limited loan officer during the pendency of the application before the Commissioner for up to 60 days after submission of the completed forms identified in subsection (a) of this section and a written undertaking by the employing affiliated mortgage banker that it will be responsible for all the applicant’s mortgage banking activities.
(c) Systems, programs, and procedures used by the affiliated mortgage banker for employment background checks, training, testing, and education by the affiliated mortgage banker shall be submitted to and reviewed by the Commissioner who may approve those which are comparable and functionally equivalent to those for loan officers under G.S. 53‑243.05 and G.S. 53‑243.07. The Commissioner must be notified of any material changes or modifications to such approved systems, programs, and procedures. The Commissioner may approve those systems, programs, and procedures used by the affiliated mortgage banker for these purposes that meet or exceed programs otherwise accredited by the Commissioner or that have been approved for the affiliated mortgage banker by at least five other states in which the affiliated mortgage banker is licensed and whose licensing requirements are substantially similar to those of North Carolina.
(d) Except as specified in this section, limited loan officers are subject to licensing standards and disciplinary authority in the same way as loan officers under this Article.
(e) A person whose license is revoked, suspended, or barred under this section is prohibited from participating in the mortgage lending business in this State. (2005‑316, s. 5.)
§ 53‑243.06. (Effective until January 1, 2009) License renewal; termination.
(a) All licenses issued by the Commissioner under the provisions of this Article shall expire annually on the 30th day of June following issuance or on any other date that the Commissioner may determine. The license shall become invalid after that date unless renewed. A license may be renewed 45 days prior to the expiration date by compliance with subsection (b1) of this section and by paying to the Commissioner, in addition to the actual cost of obtaining credit reports and State and national criminal history record checks as the Commissioner may require, a renewal fee as follows:
(1) Licensed mortgage bankers shall pay an annual fee not to exceed six hundred twenty‑five dollars ($625.00) and one hundred twenty‑five dollars ($125.00) for each branch office.
(b) If a mortgage banker or mortgage broker license is not renewed prior to the applicable expiration date, then an additional two hundred fifty dollars ($250.00) in addition to the renewal fee under subsection (a) of this section shall be assessed as a late fee to any renewal. If a loan officer or limited loan officer license is not renewed prior to the applicable expiration date, then an additional fifty dollars ($50.00) in addition to the renewal fee under subsection (a) of this section shall be assessed as a late fee to any renewal. In the event a licensee fails to obtain a reinstatement of the license within 90 days after the date the license expires, the Commissioner may require the licensee to comply with the requirements for the initial issuance of a license under the provisions of this Article.
(b1) When required by the Commissioner, each individual described in G.S. 53‑245.05(a)(6) shall furnish to the Commissioner his or her consent to a criminal history record check and a set of his or her 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 any other person by which he or she is employed, over which he or she has control, or as to which he or she is the current or proposed managing principal or a current or proposed branch manager.
(c) Licenses issued under this Article are not assignable. Control of a licensee shall not be acquired through a stock purchase or other device without the prior written consent of the Commissioner. The Commissioner shall not give written consent if the Commissioner finds that any of the grounds for denial, revocation, or suspension of a license pursuant to G.S. 53‑243.12 are applicable to the acquiring person. (2001‑393, s. 2; 2002‑169, s. 7; 2004‑171, s. 9; 2006‑239, s. 2.)
§ 53‑243.06. (Effective January 1, 2009) License renewal; termination.
(a) All licenses issued by the Commissioner under the provisions of this Article shall expire annually on the 31st day of December following issuance or on any other date that the Commissioner may determine. The license shall become invalid after that date unless renewed. A license may be renewed on or after November 1 by compliance with subsection (b1) of this section and by paying to the Commissioner, in addition to the actual cost of obtaining credit reports and State and national criminal history record checks and of processing fees of the nationwide system as the Commissioner may require, a renewal fee as follows:
(b) If a mortgage banker, mortgage servicer, or mortgage broker license is not renewed prior to the applicable expiration date, then two hundred fifty dollars ($250.00) in addition to the renewal fee under subsection (a) of this section shall be assessed as a late fee to any renewal. If a loan officer or limited loan officer license is not renewed prior to the applicable expiration date, then one hundred dollars ($100.00) in addition to the renewal fee under subsection (a) of this section shall be assessed as a late fee to any renewal. In the event a licensee fails to obtain a reinstatement of the license prior to March 1, the Commissioner may require the licensee to comply with the requirements for the initial issuance of a license under the provisions of this Article.
(b1) When required by the Commissioner, each individual described in G.S. 53‑245.05(a)(6) shall furnish to the Commissioner his or her consent to a criminal history record check and a set of his or her 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 any other person by which he or she is employed, over which he or she has control, or as to which he or she is the current or proposed qualifying individual or a current or proposed branch manager.
(c) Licenses issued under this Article are not assignable. Control of a licensee shall not be acquired through a stock purchase or other device without the prior written consent of the Commissioner. The Commissioner shall not give written consent if the Commissioner finds that any of the grounds for denial, revocation, or suspension of a license pursuant to G.S. 53‑243.12 are applicable to the acquiring person. (2001‑393, s. 2; 2002‑169, s. 7; 2004‑171, s. 9; 2006‑239, s. 2; 2008‑228, s. 4.)
§ 53‑243.07. Continuing education.
(a) As a condition of license renewal, the Commissioner may adopt rules to require continuing education of licensees under this Article for the purpose of enhancing the professional competence and professional responsibility of all licensees. The rules may include criteria for:
(3) Accreditation of videotape or other audiovisual programs.
(4) Computation of credit.
(5) Special cases and exemptions.
(6) General compliance procedures.
(b) Annual continuing professional education requirements shall be determined by the Commissioner. However, the requirements shall not exceed eight credit hours within a one‑year period.
(c) The Commissioner may require education providers of the fundamentals mortgage lending course required under the provisions of G.S. 53‑243.05(b)(2) and the continuing education courses required under this section to file information regarding the contents and materials of proposed courses to satisfy the education requirements with the Commissioner for review and approval. The Commissioner may set fees for the initial and continuing review of courses for which credit hours will be granted. The initial filing fee for review of materials shall not exceed five hundred dollars ($500.00) and the fee for continued review shall not exceed two hundred fifty dollars ($250.00) per annum per course offered. (2001‑393, s. 2; 2002‑169, s. 8.)
§ 53‑243.08. (Effective until January 1, 2009) Managing principals and branch managers.
Each mortgage broker or mortgage banker licensed under this Article shall have a managing principal who operates the business under that person’s full charge, control, and supervision. Mortgage bankers and mortgage brokers, other than exclusive mortgage brokers, may operate branch offices subject to the requirements of this Article. Each principal and branch office of a mortgage broker or mortgage banker licensed under this Article, shall have a branch manager who meets the experience requirements under G.S. 53‑243.05(c)(1); provided, that an affiliated mortgage banker may designate a branch manager who does not meet the experience requirements so long as at or before the designation, it certifies that the person has been employed by the affiliated mortgage banker for at least one year as a loan officer, limited loan officer, or in a comparable position in another state. The managing principal for a licensee’s business may also serve as the branch manager of one of the licensee’s branch offices. Each mortgage broker or mortgage banker licensed under this Article shall file a form as prescribed by the Commissioner indicating the business’s designation of managing principal and branch manager for each branch and each individual’s acceptance of the responsibility. Each mortgage broker or mortgage banker licensed under this Article shall notify the Commissioner of any change in its managing principal or branch manager designated for each branch. Any licensee who does not comply with this provision shall have the licensee’s license suspended pursuant to G.S. 53‑243.12 until the licensee complies with this section. Any individual licensee who operates as a sole proprietorship shall be considered a managing principal for the purposes of this Article. (2001‑393, s. 2; 2002‑169, s. 9; 2005‑316, s. 6.)
§ 53‑243.08. (Effective January 1, 2009) Qualifying individuals and branch managers.
Each mortgage broker or mortgage banker or mortgage servicer licensed under this Article shall have a qualifying individual who operates the business under that person’s full charge, control, and supervision. Mortgage bankers and mortgage brokers, other than exclusive mortgage brokers, may operate branch offices subject to the requirements of this Article. Each principal and branch office of a mortgage broker or mortgage banker licensed under this Article, shall have a branch manager who meets the experience requirements under G.S. 53‑243.05(c)(1); provided, that an affiliated mortgage banker may designate a branch manager who does not meet the experience requirements so long as at or before the designation, it certifies that the person has been employed by the affiliated mortgage banker for at least one year as a loan officer, limited loan officer, or in a comparable position in another state. The qualifying individual for a licensee’s business may also serve as the branch manager of one of the licensee’s branch offices. Each mortgage broker or mortgage banker licensed under this Article shall file a form as prescribed by the Commissioner indicating the business’s designation of qualifying individual and branch manager for each branch and each individual’s acceptance of the responsibility. Each mortgage broker or mortgage banker licensed under this Article shall notify the Commissioner of any change in its qualifying individual or branch manager designated for each branch. Each mortgage servicer licensed under this Article shall file a form prescribed by the Commissioner indicating the business’s designation of its qualifying individual and shall notify the Commissioner of any change in its qualifying individual. Any licensee who does not comply with this provision shall have the licensee’s license suspended pursuant to G.S. 53‑243.12 until the licensee complies with this section. Any individual licensee who operates as a sole proprietorship shall be considered a qualifying individual for the purposes of this Article. (2001‑393, s. 2; 2002‑169, s. 9; 2005‑316, s. 6; 2008‑228, s. 5.)
§ 53‑243.09. (Effective until January 1, 2009) Offices; address changes; display of license.
(a) Each mortgage broker licensee shall maintain and transact business from a principal place of business in this State. A principal place of business in this State shall consist of at least one enclosed room or building of stationary construction in which negotiations of mortgage loan transactions of others 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. However, the Commissioner may, by rule, impose terms and conditions under which the records and files may be maintained outside of this State.
(b) A mortgage banker or mortgage broker licensee shall report any change of address of the principal place of business or any branch office within 15 days after the change.
(c) Each mortgage broker or mortgage banker licensed under this Article shall display in plain view the certificate of licensure issued by the Commissioner in its principal office and in each branch office. Each loan officer licensed under this Article shall display in each branch office in which the officer acts as a loan officer the certificate of licensure issued by the Commissioner. (2001‑393, s. 2.)
§ 53‑243.09. (Effective January 1, 2009) Offices; address changes; display of license.
(c) Each mortgage broker or mortgage banker licensed under this Article shall display in plain public view the certificate of licensure issued by the Commissioner in its principal office and in each branch office. Each loan officer licensed under this Article shall display, in plain public view, in each branch office in which the officer acts as a loan officer the certificate of licensure issued by the Commissioner. (2001‑393, s. 2; 2008‑228, s. 6.)
§ 53‑243.10. (Effective until January 1, 2009) Mortgage broker duties.
A mortgage broker, including any mortgage broker licensee and any person required to be licensed as a mortgage broker under this Article, shall, in addition to duties imposed by other statutes or at common law, shall do all of the following:
(9) Ensure that its advertising materials are designed to make customers and potential customers aware that one mortgage broker does not discriminate on any prohibited basis. (2001‑393, s. 2; 2007‑352, s. 7; 2007‑484, ss. 43.8G(a), (b).)
§ 53‑243.10. (Effective January 1, 2009) Mortgage broker duties; mortgage servicer duties.
(a) A mortgage broker, including any mortgage broker licensee and any person acting as a mortgage broker under this Article, in addition to duties imposed by other statutes or at common law, shall do all of the following:
(9) Ensure that advertising materials are designed to make customers and potential customers aware that the mortgage broker does not discriminate on any prohibited basis.
(7) In the event of a delinquency or other act of default on the part of the borrower, the servicer shall act in good faith to inform the borrower of the facts concerning the loan and the nature and extent of the delinquency or default, and, if the borrower replies, to negotiate with the borrower, subject to the servicer’s duties and obligations under the mortgage servicing contract, if any, to attempt a resolution or workout to the delinquency. (2001‑393, s. 2; 2007‑352, s. 7; 2007‑484, ss. 43.8G(a), (b); 2008‑228, s. 7.)
§ 53‑243.11. (Effective until January 1, 2009) Prohibited activities.
(3) To fail to account for or to deliver to any person any funds, documents, or other thing 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 banker, broker, or loan officer is not entitled to retain under the circumstances.
(5) To charge or collect any fee or rate of interest or to make or broker any mortgage loan with terms or conditions or in a manner contrary to the provisions of Chapter 24 of the General Statutes.
(11) To improperly influence or attempt to improperly influence the development, reporting, result, or review of a real estate appraisal sought in connection with a mortgage loan. Nothing in this subdivision shall be construed to prohibit a mortgage broker or mortgage banker from asking the appraiser to do one or more of the following:
(14) To fail to comply with applicable federal laws and regulations related to mortgage lending.
(16A) In connection with the brokering or making of a rate‑spread home loan as defined under G.S. 24‑1.1F, no lender shall provide nor shall any broker receive any compensation that changes based on the terms of the loan. This subdivision shall not prohibit compensation based on the principal balance of the loan. (2001‑393, s. 2; 2001‑399, s. 3; 2004‑171, s. 10; 2007‑352, s. 8; 2008‑187, s. 49.6; 2008‑227, s. 3.)
§ 53‑243.11. (Effective January 1, 2009) Prohibited activities.
(5) To charge or collect any fee or rate of interest or to make or broker or service any mortgage loan with terms or conditions or in a manner contrary to the provisions of Chapter 24, Chapter 45, or Chapter 54 of the General Statutes.
(11) To improperly influence or attempt to improperly influence the development, reporting, result, or review of a real estate appraisal sought in connection with a mortgage loan. Nothing in this subdivision shall be construed to prohibit a mortgage broker, mortgage banker, or mortgage servicer from asking the appraiser to do one or more of the following:
(14) To fail to comply with applicable federal laws and regulations related to mortgage lending, or mortgage servicing.
(16A) In connection with the brokering or making of a rate‑spread home loan as defined under G.S. 24‑1.1F, no lender shall provide nor shall any broker receive any compensation that changes based on the terms of the loan. This subdivision shall not prohibit compensation based on the principal balance of the loan.
(22) To fail to make all payments from any escrow account held for the borrower for insurance, taxes, and other charges with respect to the property in a timely manner so as to ensure that no late penalties are assessed or other negative consequences result regardless of whether the loan is delinquent unless there are not sufficient funds in the account to cover the payments, and the servicer has a reasonable basis to believe that recovery of the funds will not be possible. (2001‑393, s. 2; 2001‑399, s. 3; 2004‑171, s. 10; 2007‑352, s. 8; 2008‑187, s. 49.6; 2008‑227, s. 3; 2008‑228, s. 8.)
§ 53‑243.12. (Effective until January 1, 2009) Disciplinary authority.
(2) That any of the following circumstances apply to the applicant, licensee, or any partner, member, manager, officer, director, loan officer, limited loan officer, managing principal, or any person occupying a similar status or performing similar functions or any person directly or indirectly controlling the applicant or licensee. The person:
c. Has been convicted of any felony, or, within the past 10 years, has been convicted of any misdemeanor involving mortgage lending or any aspect of the mortgage lending business, or any offense involving breach of trust, moral turpitude, or fraudulent or dishonest dealing.
e. Is the subject of an order of the Commissioner denying, suspending, or revoking that person’s license as a mortgage broker or mortgage banker.
f. Is the subject of an order entered within the past five years by the authority of any state with jurisdiction over that state’s mortgage brokerage or mortgage banking industry denying or revoking that person’s license as a mortgage broker or mortgage banking industry or denying or revoking that person’s license as a mortgage broker or mortgage banker.
h. Has been the executive officer or controlling shareholder or owned a controlling interest in any mortgage broker or mortgage banker who has been subject to an order or injunction described in sub‑subdivision d., e., or f. of this subdivision.
(c) The Commissioner may, by order, impose a civil penalty upon a licensee or any partner, officer, director, or other person occupying a similar status or performing similar functions on behalf of a licensee for any violation of this Article. The civil penalty shall not exceed ten thousand dollars ($10,000) for each violation of this Article by a mortgage broker or mortgage banker. The Commissioner may impose a civil penalty of up to ten thousand dollars ($10,000) for each violation of this Article by a person other than a licensee or exempt person.
(i) The Commissioner may from time to time, at the expense of the Commissioner’s office, conduct routine examinations of the books and records of any licensee in order to determine the compliance with this Article and any rules adopted pursuant to the authority of G.S. 53‑243.04.
(j) In addition to the rights described under this section, the Commissioner may require a licensee to pay to a borrower or other individual any amounts received by the licensee or its employees in violation of Chapter 24 of the General Statutes.
(k) If the Commissioner finds that the managing principal, branch manager, or loan officer of a licensee had knowledge of or reasonably should have had knowledge of, or participated in, any activity that results in the entry of an order under this section suspending or withdrawing the license of a licensee, the Commissioner may prohibit the branch manager, managing principal, or loan officer from serving as a branch manager, managing principal, or loan officer for any period of time the Commissioner deems necessary.
(m) Subject to the provisions of G.S. 53‑243.03, the Commissioner may, by order, prohibit licensees under this Article from engaging in acts and practices in connection with mortgage loans that the Commissioner finds to be unfair, deceptive, designed to evade the laws of this State, or that are not in the best interest of the borrowing public. (2001‑393, s. 2; 2002‑169, s. 10; 2004‑171, ss. 11‑13; 2005‑316, s. 7; 2007‑352, s. 9.)
§ 53‑243.12. (Effective January 1, 2009) Disciplinary authority.
c. Has been convicted of any felony, or, within the past 10 years, has been convicted of any misdemeanor involving moral turpitude or financial services or a financial services‑related business or any fraud, false statements or omissions, theft or any wrongful taking of property, bribery, perjury, forgery, counterfeiting, extortion, or a conspiracy to commit any of these offenses.
e. Is the subject of an order of the Commissioner denying, suspending, or revoking that person’s license as a mortgage broker, mortgage banker, or mortgage servicer.
f. Is the subject of an order entered within the past five years by the authority of any state with jurisdiction over that state’s mortgage brokerage, mortgage banking, or mortgage‑servicing industry denying or revoking that person’s license as a mortgage broker, mortgage servicer, or mortgage banker.
(c) The Commissioner may, by order, impose a civil penalty upon a licensee or any partner, officer, director, or other person occupying a similar status or performing similar functions on behalf of a licensee for any violation of this Article. The civil penalty shall not exceed ten thousand dollars ($10,000) for each violation of this Article by a mortgage broker, mortgage banker, or mortgage servicer. The Commissioner may impose a civil penalty of up to ten thousand dollars ($10,000) for each violation of this Article by a person other than a licensee or exempt person.
(i) The Commissioner may from time to time, at the expense of the licensee, conduct routine examinations of the books and records of any licensee in order to determine the compliance with this Article and any rules adopted pursuant to the authority of G.S. 53‑243.04.
(j) In addition to the rights described under this section, the Commissioner may require a licensee to pay to a borrower or other individual any amounts received by the licensee or its employees in violation of Chapter 24 of the General Statutes, or, if a servicer, in excess of those allowed by law to servicers.
(k) If the Commissioner finds that the qualifying individual, branch manager, or loan officer of a licensee had knowledge of or reasonably should have had knowledge of, or participated in, any activity that results in the entry of an order under this section suspending or withdrawing the license of a licensee, the Commissioner may prohibit the branch manager, qualifying individual, or loan officer from serving as a branch manager, qualifying individual, or loan officer for any period of time the Commissioner deems necessary.
(q) The Commissioner is authorized to take action, including suspension of the license, if the licensee fails to respond within 20 days, or within a lesser time if specifically requested for good cause, to and cooperate fully with notices from the Commissioner or the Commissioner’s designee relating to the scheduling and conducting of an examination or investigation under this Article. (2001‑393, s. 2; 2002‑169, s. 10; 2004‑171, ss. 11‑13; 2005‑316, s. 7; 2007‑352, s. 9; 2008‑228, s. 9.)
§ 53‑243.13. Records; escrow funds or trust accounts.
(a) The Commissioner shall keep a list of all applicants for licensure under this Article that 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 showing the names and places of business of all licensees that shows their respective loan officers and a roster of exempt persons required to file a notice under G.S. 53‑243.02. The rosters shall: (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 officers, and other persons; and (iii) be open to public inspection.
(c) Every licensee shall make and keep the accounts, correspondence, memoranda, papers, books, and other records as prescribed in rules adopted by the Commissioner. All records shall be preserved for three years unless the Commissioner, by rule, prescribes otherwise for particular types of records. The recordkeeping requirements imposed by the Commissioner or this subsection shall not be greater than those imposed by applicable federal law.
(d) If the information contained in any document filed with the Commissioner is or becomes inaccurate or incomplete in any material respect, the licensee shall promptly file a correcting amendment to the information contained in the document.
(e) (Effective until January 1, 2009) A licensee shall maintain in a segregated escrow fund or trust account any funds which 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 shall be held on deposit in a federally insured financial institution.
(e) (Effective January 1, 2009) A licensee shall maintain in a segregated escrow fund or trust account any funds which 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 shall be held on deposit in a federally insured financial institution. Individual loan applicants’ or borrowers’ accounts may be aggregated into a common trust fund so long as (i) interests in the common fund can be individually tracked and accounted for, and (ii) the common fund is kept separate from and is not commingled with the licensee’s own funds. (2001‑393, s. 2; 2008‑228, s. 10.)
§ 53‑243.14. (Effective until January 1, 2009) Criminal penalty.
A violation of G.S. 53‑243.02 is a Class I felony. Each transaction involving the unlawful making or brokering of a mortgage loan is a separate offense. (2001‑393, s. 2.)
§ 53‑243.14. (Effective January 1, 2009) Criminal penalty.
A violation of G.S. 53‑243.02 is a Class 3 misdemeanor. Each transaction involving the unlawful making or brokering or servicing of a mortgage loan is a separate offense. (2001‑393, s. 2; 2008‑228, s. 11.)
§ 53‑243.15. Filing required for exempt persons; civil penalty.
(a) All exempt persons described in G.S. 53‑243.01(12) who are engaged in the mortgage brokerage or mortgage banking business on October 1, 2002, or who are engaged in the mortgage‑servicing business on October 1, 2008, shall be required to file a form with the Commissioner on or before that date. All exempt persons, who commence mortgage brokerage or mortgage banking business in this State after October 1, 2002, or who commence mortgage servicing in this State after October 1, 2008, shall file the form with the Commissioner upon commencement of the business. This form, prescribed by the Commissioner, shall contain all of the following information:
(c) The filing requirements of this section shall not apply to the individual employees of an exempt person. (2001‑393, s. 2; 2008‑228, s. 12.)
§ 53‑243.16. Criminal history record checks.
(a) The Department of Justice may provide a criminal record check to the Commissioner for any person who has applied for or holds a mortgage banker, mortgage broker, exclusive mortgage broker, or loan officer license through the Commissioner under this Article.
(b) (Effective until January 1, 2009) In addition, if a person described in subsection (a) of this section is a corporation, partnership, limited liability company, association, or trust, the Department of Justice may provide a criminal history record check to the Commissioner for any person who has control of that person, or who is the managing principal or a branch manager of that person.
(b) (Effective January 1, 2009) In addition, if a person described in subsection (a) of this section is a corporation, partnership, limited liability company, association, or trust, the Department of Justice may provide a criminal history record check to the Commissioner for any person who has control of that person, or who is the qualifying individual or a branch manager of that person.
(c) The Commissioner shall provide to the Department of Justice, along with the request, the fingerprints of the person, any additional information required by the Department of Justice, and a form signed by the person consenting to the check of the criminal record and to the use of the fingerprints and other identifying information required by the State or national repositories. The person’s fingerprints shall be forwarded to the State Bureau of Investigation for a search of the State’s criminal history record file, and the State Bureau of Investigation shall forward a set of the fingerprints to the Federal Bureau of Investigation for a national criminal history check. The Commissioner shall keep all information pursuant to this section privileged, in accordance with applicable State law and federal guidelines, and the information shall be confidential and shall not be a public record under Chapter 132 of the General Statutes.
The Department of Justice may charge a fee for each person for conducting the checks of criminal history records authorized by this section. (2002‑169, s. 11; 2004‑171, s. 14; 2008‑228, s. 13.)
§ 53‑243.17. Participation in national mortgage licensing system; licensing proprietary software.
(a) The Commissioner of Banks is authorized to participate in the formation and operation of a centralized and automated licensing system and data depository funded by State mortgage regulators and law enforcement agencies. Pursuant to this authority, the Commissioner may:
(1) Cause funds of the Office of Commissioner of Banks to be applied to the initial capitalization, organizational expenses, and operating expenses of a limited liability company, nonprofit corporation or foundation, or other entity created to operate the licensing system and data depository and to serve as a manager or director of the entity;
(2) Enter into operating agreements, information sharing agreements, interstate cooperative agreements, and technology licensing agreements necessary to the organization and operation of the entity and the licensing system and data depository; and
(3) Take such further actions as are reasonably necessary to give effect to the provisions of this section.
(b) The Commissioner is authorized to enter into agreements to license the use of the proprietary software owned by the Office of the Commissioner of Banks to banking, mortgage, or financial services supervisory agencies of other states.
(c) (Effective until January 1, 2009) Notwithstanding any other provision of this section, the Commissioner retains full authority and discretion under this Article to license mortgage brokers, mortgage bankers, loan officers, and limited loan officers and to enforce this Article to its fullest extent. Nothing in this section shall be deemed to be a reduction or derogation of that authority and discretion.
(c) (Effective January 1, 2009) Notwithstanding any other provision of this section, the Commissioner retains full authority and discretion under this Article to license mortgage brokers, mortgage bankers, mortgage servicers, loan officers, and limited loan officers and to enforce this Article to its fullest extent. Nothing in this section shall be deemed to be a reduction or derogation of that authority and discretion. (2006‑239, s. 3; 2008‑228, s. 14.)
§ 53‑243.18. Payment of fees.
Payment of fees specified in this Article shall be made to the Office of Commissioner of Banks or, at the election of the Commissioner, to a national mortgage licensing system, agency, or enterprise designated by the Commissioner. (2006‑239, s. 3.)
§ 53‑244. Reserved for future codification purposes.
§ 66‑106. Definitions.
(1) A “loan broker” is any person, firm, or corporation who, in return for any consideration from any person, promises to (i) procure for such person, or assist such person in procuring, a loan from any third party; or (ii) consider whether or not it will make a loan to such person.
(2) A “loan” is an agreement to advance money or property in return for the promise to make payments therefor, whether such agreement is styled as a loan, credit card, line of credit, a lease or otherwise.
(b) (Effective until January 1, 2009) Except for mortgage loans as defined in G.S. 53‑243.01(15), this Article shall not apply to any party approved as a mortgagee by the Secretary of Housing and Urban Development, the Federal Housing Administration, the Veterans Administration, a National Mortgage Association or any federal agency; nor to any party currently designated and compensated by a North Carolina licensed insurance company as its agent to service loans it makes in this State; nor to any insurance company registered with and licensed by the North Carolina Insurance Commissioner; nor, with respect to residential mortgage loans, to any residential mortgage banker or mortgage broker licensed pursuant to Article 19A of Chapter 53 of the General Statutes or exempt from licensure pursuant to G.S. 53‑243.01(8) and G.S. 53‑243.02; nor to any attorney‑at‑law, public accountant, or dealer registered under the North Carolina Securities Act, acting in the professional capacity for which such attorney‑at‑law, public accountant, or dealer is registered or licensed under the laws of the State of North Carolina. Provided further that subdivision (1)(ii) above shall not apply to any lender whose loans or advances to any person, firm or corporation in North Carolina aggregate more than one million dollars ($1,000,000) in the preceding calendar year.
(b) (Effective January 1, 2009) Except for mortgage loans as defined in G.S. 53‑243.01, this Article shall not apply to any party approved as a mortgagee by the Secretary of Housing and Urban Development, the Federal Housing Administration, the Veterans Administration, a National Mortgage Association or any federal agency; nor to any party currently designated and compensated by a North Carolina licensed insurance company as its agent to service loans it makes in this State; nor to any insurance company registered with and licensed by the North Carolina Insurance Commissioner; nor, with respect to residential mortgage loans, to any residential mortgage banker or mortgage broker licensed pursuant to Article 19A of Chapter 53 of the General Statutes or exempt from licensure pursuant to G.S. 53‑243.01(12) and G.S. 53‑243.02; nor to any attorney‑at‑law, public accountant, or dealer registered under the North Carolina Securities Act, acting in the professional capacity for which such attorney‑at‑law, public accountant, or dealer is registered or licensed under the laws of the State of North Carolina. Provided further that subdivision (1)(ii) above shall not apply to any lender whose loans or advances to any person, firm or corporation in North Carolina aggregate more than one million dollars ($1,000,000) in the preceding calendar year. (1979, c. 705, s. 1; 1981, c. 785, s. 1; 1993, c. 339, s. 2; 2001‑393, s. 4; 2008‑228, s. 17.)
§ 66‑107. Required disclosure statement.
At least seven days prior to the time any person signs a contract for the services of a loan broker, or the time of the receipt of any consideration by the loan broker, whichever occurs first, the broker must provide to the party with whom he contracts a written document, the cover sheet of which is entitled in at least 10‑point bold face capital letters “DISCLOSURES REQUIRED BY NORTH CAROLINA LAW.” Under this title shall appear the statement in at least 10‑point type that “The State of North Carolina has not reviewed and does not approve, recommend, endorse or sponsor any loan brokerage contract. The information contained in this disclosure has not been verified by the State. If you have any questions see an attorney before you sign a contract or agreement.” Nothing except the title and required statement shall appear on the cover sheet. The disclosure document shall contain the following information:
(2) The names, addresses and titles of the broker’s officers, directors, trustees, general partners, general managers, principal executives, and any other persons charged with responsibility for the broker’s business activities; and all the broker’s employees located in North Carolina;
(6) A copy of a current (not older than 13 months) financial statement of the broker, updated to reflect any material changes in the broker’s financial condition;
a.____ “As required by North Carolina law, this loan broker has secured a bond by
a surety authorized to do business in this State. Before signing a contract with this loan broker, you should check with the surety company to determine the bond’s current status,” or
b.____ “As required by North Carolina law, this loan broker has established a trust account __________________________________________________
with _______________________________________________
Before signing a contract with this loan broker you should check with the bank or savings institution to determine the current status of the trust account.” (1979, c. 705, s. 1.)
§ 66‑108. Bond or trust account required.
(a) Every loan broker must obtain a surety bond issued by a surety company authorized to do business in this State, or establish a trust account with a licensed and insured bank or savings institution located in the State of North Carolina. The amount of the bond or trust account shall be ten thousand dollars ($10,000). The bond or trust account shall be in favor of the State of North Carolina. Any person damaged by the loan broker’s breach of contract or of any obligation arising therefrom, or by any violation of this Article, may bring an action against the bond or trust account to recover damages suffered. The aggregate liability of the surety or trustee shall be only for actual damages and in no event shall exceed the amount of the bond or trust account.
§ 66‑109. Filing with Secretary of State.
(a) Prior to placing any advertisement or making any other representations to prospective borrowers in this State, every loan broker shall file with the Secretary of State two copies of the disclosure statement required by G.S. 66‑107, and either a copy of the bond required by G.S. 66‑108, or a copy of the formal notification by the depository that the trust account required by G.S. 66‑108 is established. These filings shall be updated as any material changes in the required information or the status of the bond or trust account occur, but no less than annually.
§ 66‑110. Contracts to be in writing.
§ 66‑111. Remedies.
(a) If a loan broker uses any untrue or misleading statements in connection with a loan brokerage contract, fails to fully comply with the requirements of this Article, fails to comply with the terms of the contract or any obligation arising therefrom, or fails to make diligent effort to grant a loan to or procure a loan on behalf of the prospective borrower, then, upon written notice to the broker, the prospective borrower may void the contract, and shall be entitled to receive from the broker all sums paid to the broker, and recover any additional damages including attorney’s fees.
(d) The violation of any provisions of this Article shall constitute an unfair practice under G.S. 75‑1.1. (1979, c. 705, s. 1.)
§ 66‑112. Scope.
§§ 66‑113 through 66‑117. Reserved for future codification purposes.