New York Codes, Rules and Regulations › Title 3 - BANKING › Chapter III - SUPERINTENDENT'S REGULATIONS › Subchapter B - NON-BANKING ORGANIZATIONS › Part 410 - Mortgage Bankers: Licensing Requirements; Mortgage Brokers: Registration Requirements; Branch Applications: Notifications: Books And Records; Annual Reports; Surety Bonds; And Consultants Of Licensed Mortgage Bankers And Registered Mortgage Brokers › Section 410.1 - Mortgage banking license; minimum standards

Current through Register Vol. 46, No. 28, July 10, 2024
(a) Purpose. Section 592  of the Banking Law provides that the
				  superintendent may issue licenses to engage in the business of mortgage banking
				  if he shall find that the financial responsibility, experience, 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,
				  fairly and efficiently. Certain minimum standards to be met by applicants for a
				  mortgage banking license are set forth in this section. Nothing contained
				  herein shall limit the superintendent's authority to consider all relevant
				  factors in determining whether or not to approve an application, or to require
				  information in addition to that required by the application form provided to
				  the applicant by the department.
(b) Financial responsibility. Applicants for
				  a license to engage in the business of making mortgage loans shall demonstrate
				  and maintain:
(1) adjusted net worth of not
				  less than $250,000;
(2) an existing
				  line of credit in an amount of not less than $1,000,000 provided by an
				  unaffiliated banking institution, insurance company or similar credit facility
				  approved by the superintendent; and
(3) a corporate surety bond issued by a
				  bonding company or an insurance company authorized to do business in New York
				  or pledged deposit (valued at the lower of principal amount or market) in the
				  amount set forth in section
				  410.9  of this
				  Part.
Applicants shall provide the superintendent with evidence
					 of their financial responsibility and submit an affirmation which states that
					 the applicant meets the foregoing requirements. Adjusted net worth shall
					 consist of stockholders equity per the statement of financial condition at the
					 end of the reporting period less the following nonacceptable assets: any asset
					 or portion thereof pledged to secure obligations of any person or entity other
					 than that of the mortgage banker; any asset (except construction loans
					 receivable, secured by first mortgages, from related companies) due from
					 officers or stockholders of the mortgage banker or related companies; that
					 portion of any marketable security (listed or unlisted) not shown at lower of
					 cost or market, except for any shares of FNMA stock required to be held under a
					 servicing agreement which should be carried at cost; any amount in excess of
					 the lower of the cost or market value of mortgages in foreclosure, construction
					 loans, or property acquired through foreclosure; any amount shown on the
					 balance sheet in joint ventures, subsidiaries, affiliates, and/or related
					 companies which is greater than the value of said assets at equity; Goodwill or
					 value placed on insurance renewals or property management contract renewals or
					 other similar intangibles; organization costs; the value of any servicing
					 contracts not determined in accordance with FASB 65, Accounting for Certain
					 Mortgage Banking Activities, or subsequent revisions thereto; and "other
					 assets," unless the financial statements are accompanied by a schedule prepared
					 by the independent auditor or a schedule prepared by the mortgage banker and
					 signed by an officer of the mortgage banker.