Administrative Rule Changes

The Commissioner of Banks (COB) has adopted changes to the Administrative Code relating to the Mortgage Lending Act (MLA). All rule changes are currently effective and the COB has the responsibility to enforce these rules and conduct routine examinations for compliance.

One of the new changes requires mortgage brokers and mortgage bankers to file quarterly reports on their company’s origination activity. In addition to the annual report, each quarter, licensees shall provided, in an electronic format, information regarding the characteristics of closed loans.

Loan Repurchase Request

Any licensee, broker, banker or loan officer, shall report any request to repurchase a loan made or brokered by them based on an alleged misstatement.
Note: These and other updated rules and statues may be accessed through the Banking Commission’s website at www.nccob.org. Click on Mortgage, then click on Legal Compliance References on the menu to access the full text of these declatory rulings.

Financial Responsibility

In order to protect consumers and to raise the standards of licensees, the Banking Commission sought to define the appropriate level of financial responsibility for each level of licensure. Upon the application for license, or in the course of the examination process, or upon renewal of license, a licensee should be able to demonstrate the following financial responsibilities:

1. A mortgage banker/lender must:
   1. Have a net worth, as shown on a audited statement of financial condition, of $100,000 and,
   2. Demonstrate liquidity by showing a line of credit or other funds available of at least $1,000,000.
2. A mortgage broker must:
   1. Provide a statement of financial condition, certified by the managing principal or other authorized person, that the company has a net worth of $25,000 and,
   2. Demonstrate liquidity in the amount of $10,000 by having bank statements or other documents showing liquid funds available with which to operate the business.
3. A loan officer must:
   1. Produce a credit report with a Beacon score of 600 or greater, and
   2. Demonstrate a history of satisfying debt obligations in a timely manner as indicated by an absence of outstanding judgments or tax liens within the last seven (7) years.