NAC: CHAPTER 645B - MORTGAGE BROKERS AND MORTGAGE AGENTS

[Rev. 11/28/2017 2:31:58 PM]

[NAC-645B Revised Date: 11-17]

CHAPTER 645B - MORTGAGE BROKERS AND MORTGAGE AGENTS

GENERAL PROVISIONS

645B.001            Definitions.

645B.002            “Affiliated business” defined.

645B.0025          “Approved course” defined.

645B.0026          “Commercial property” defined.

645B.0027          “Control person” defined.

645B.004            “Major violation” defined.

645B.006            “Minor violation” defined.

645B.0065          “Nontraditional mortgage product” defined.

645B.007            “Provider” defined.

645B.008            “Qualified employee” defined.

645B.0082          “S.A.F.E. Mortgage Licensing Act” defined.

645B.0084          “Unique identifier” defined.

645B.0085          “Commercial loan” interpreted.

645B.0086          “Insolvent” interpreted.

645B.0087          “Mobile home” interpreted.

645B.009            Deposits, disclosures and appraisals: Interpretation of certain statutory terms.

645B.0115          Change of electronic mail address or contact information.

LICENSING AND OPERATION OF MORTGAGE BROKERS

645B.016            Qualifications of applicant: Required experience.

645B.0165          Qualifications of applicant: Requirements for licensure pursuant to NRS 645B.020.

645B.017            Activity not constituting services as mortgage broker.

645B.020            Documentation required with application for license; conditional approval; effect of failure to respond to written request for information in timely manner.

645B.030            Branch office: Prerequisites and name for issuance of license; responsibilities of mortgage broker; conditional approval; effect of failure to respond to written request for information in timely manner.

645B.032            Sharing office space with another business.

645B.035            Use of fictitious name.

645B.037            Use of same name, confusingly similar name or name not approved by Commissioner; display of license.

645B.0375          Professional conduct.

645B.038            Insider loans: Limitations and conditions.

EXEMPTIONS

645B.044            Burden of demonstrating qualification for exemption from provisions of chapter 645B of NRS.

645B.045            Unexpired certificate of exemption.

SUPERVISION BY COMMISSIONER

General Provisions

645B.055            Qualified employee: Designation and approval.

645B.057            Change in control or control person of mortgage broker; change of location or closure of principal or branch office; surrender of license.

645B.060            Fees for supervision and related activities: Amount; collection; failure to pay; accounting of time billed upon request.

645B.061            Grounds for denial of renewal of license.

Examinations, Audits and Investigations

645B.064            Assessment for costs related to audits and examinations.

645B.066            Authority of Commissioner or designee in conducting examination, investigation or audit.

645B.0665          Proof of adverse change in financial condition.

645B.067            Rating of mortgage broker upon completion of examination.

645B.068            Results of examination: Preparation and review of draft report; final report; confidentiality; action by Commissioner.

Records and Reports

645B.070            Monthly reports.

645B.072            “Complete and suitable records” interpreted for purposes of NRS 645B.080.

645B.077            Retention and maintenance of certain records.

645B.080            Provision and retention of certain documents.

Net Worth

645B.095            Determination by Commissioner.

ESCROW AND TRUST ACCOUNTS

645B.150            Money received to acquire loans: Required statements and ledgers.

645B.160            Money received to repay loans: Required statements and records.

645B.165            Money received to acquire or repay loans: Required financial statements.

645B.170            Money received to acquire or repay loans: Period for retention of records.

DISCLOSURES AND ADVERTISING

645B.210            Disclosure of involvement.

645B.215            Disclosures to purchaser of note secured by deed of trust; retention of documents.

645B.220            Disclosure form.

645B.230            Provision to Division of financial statement for private investors.

645B.235            Disclosures to borrowers by certain persons acting in dual capacity.

645B.240            Representation of activity as licensed; advertisements; disclosure to private investors; Internet links.

CONDITIONS AND LIMITATIONS ON CERTAIN MORTGAGE TRANSACTIONS

645B.250            Prohibition against acting as trustee or substitute trustee under certain circumstances; exception.

645B.255            Minimum financial requirement for private investors.

645B.260            Decisions regarding investments.

645B.280            Power of attorney: Submission to and action by Commissioner; maintenance of written communications; extension of term; inclusion of date of approval.

645B.290            Power of attorney: Form.

LICENSING AND REGULATION OF MORTGAGE AGENTS

645B.300            Application for licensing; association with or employment by mortgage broker or mortgage banker; investigation of background; confidentiality of certain documents; termination of association or employment.

645B.305            Qualifications of applicant: Requirements for licensure pursuant to NRS 645B.410.

645B.307            Request for change of association with mortgage broker; fee.

645B.310            Determination by Commissioner of adequate supervision of mortgage agent by mortgage broker.

EDUCATIONAL REQUIREMENTS FOR LICENSURE

645B.360            Designation of Registry to certify approved courses.

645B.363            Course material for initial licensure and continuing education: Approved subjects.

645B.367            Requirements for initial licensure.

645B.370            Qualified written test required for initial licensure.

645B.373            Requirements for continuing education.

RESIDENTIAL MORTGAGE LOANS

645B.400            “Residential mortgage loan originator” interpreted.

645B.405            Unique identifier.

ENFORCEMENT

645B.505            Referral of certain suspected violations for investigation and action; grounds for disciplinary action.

645B.510            Reporting of violations to Registry; procedure for challenging report.

645B.515            Orders to cease and desist from certain activities.

645B.520            Suspension or revocation of license for major violation.

645B.525            Hearings: Coordination and notice of time and location.

645B.530            Hearings: Continuances.

645B.532            Hearings: Designation of hearing officer.

645B.535            Hearings: Representation of respondent.

645B.540            Hearings: Disclosure of exhibits and list of witnesses; limitations on discovery.

645B.545            Hearings: Motions.

645B.550            Hearings: Procedure.

645B.555            Hearings: Burden and standard of proof.

645B.560            Hearings: Rules of evidence; informality of proceedings.

645B.565            Hearings: Decision of hearing officer.

645B.570            Posthearing motions.

645B.575            Informal disposition of contested cases; consent and settlement agreements.

645B.580            Immunity from civil liability.

 

GENERAL PROVISIONS

     NAC 645B.001  Definitions. (NRS 645B.0137, 645B.0138, 645B.060, 645F.292, 645F.293)  As used in this chapter, unless the context otherwise requires, the words and terms defined in NRS 645B.0104 to 645B.01356, inclusive, and NAC 645B.002 to 645B.0084, inclusive, have the meanings ascribed to them in those sections.

     (Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004; R093-09, 10-27-2009; R035-10, 7-22-2010)

     NAC 645B.002  “Affiliated business” defined. (NRS 645B.060)

     1.  “Affiliated business” means a business which a mortgage broker or any control person or employee of the mortgage broker:

     (a) Directly or indirectly owns or controls a controlling interest of the business;

     (b) Is a partner, officer, director or trustee of the business; or

     (c) Conducts the operation of the business.

     2.  As used in this section, “controlling interest” means a majority of the voting stock of a business or any other interest in a business that gives the holder of the interest the power to direct the management or to determine the policy of the business.

     (Added to NAC by Comm’r of Mortgage Lending by R087-04, eff. 8-31-2004; A by R125-16, 1-27-2017)

     NAC 645B.0025  “Approved course” defined. (NRS 645B.0137, 645B.0138, 645B.060, 645F.292, 645F.293)

     1.  “Approved course” means, for a mortgage broker or mortgage agent who:

     (a) Is required to register or voluntarily registers with the Registry, a course of education that has been reviewed and approved by the Registry.

     (b) Pursuant to NRS 645F.267, is not required to register or renew with the Registry and who has not voluntarily registered or renewed with the Registry, any certified course of continuing education which is reviewed, approved or offered by or through a federal or state governmental agency, a self-regulatory organization or a professional organization for prelicensing or continuing education.

     2.  For the purposes of this section, “reviewed and approved by the Registry” includes, without limitation, the review and approval by the Registry of the provider of the course.

     (Added to NAC by Comm’r of Mortgage Lending by R093-09, eff. 10-27-2009; A by R035-10, 7-22-2010; R125-16, 1-27-2017)

     NAC 645B.0026  “Commercial property” defined. (NRS 645B.060)  “Commercial property” has the meaning ascribed to it in NRS 645E.040.

     (Added to NAC by Comm’r of Mortgage Lending by R125-16, eff. 1-27-2017)

     NAC 645B.0027  “Control person” defined. (NRS 645B.060)  “Control person” means an executive officer, officer, general partner, partner, managing member, member, director, trustee or shareholder of a licensee or applicant. The term includes, without limitation, a chief executive officer, president, vice president, chief financial officer, chief operating officer, chief legal officer, controller or compliance officer or a natural person who holds any similar position.

     (Added to NAC by Comm’r of Mortgage Lending by R125-16, eff. 1-27-2017)

     NAC 645B.004  “Major violation” defined. (NRS 645B.060, 645B.700)  “Major violation” means a violation of the provisions of this chapter or chapter 645B of NRS:

     1.  Which causes substantial loss or harm to any person or which, in the opinion of the Commissioner, could have caused substantial loss or harm to any person;

     2.  For which the Commissioner has taken disciplinary action repeatedly, except a violation for the late filing of required reports, financial statements or fees that the Commissioner considers to be a minor violation; or

     3.  Which, in the opinion of the Commissioner, was the result of willful misconduct or indifference to the obligations of the mortgage broker pursuant to this chapter or chapter 645B of NRS.

     (Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000)

     NAC 645B.006  “Minor violation” defined. (NRS 645B.060, 645B.700)  “Minor violation” means any violation that is not a major violation.

     (Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000)

     NAC 645B.0065  “Nontraditional mortgage product” defined. (NRS 645B.060)  “Nontraditional mortgage product’’ means any mortgage product other than a 30-year fixed rate mortgage.

     (Added to NAC by Comm’r of Mortgage Lending by R035-10, eff. 7-22-2010)

     NAC 645B.007  “Provider” defined. (NRS 645B.0137, 645B.0138, 645B.060, 645F.292, 645F.293)  “Provider” means any person or entity that provides an approved course.

     (Added to NAC by Comm’r of Mortgage Lending by R093-09, eff. 10-27-2009; A by R035-10, 7-22-2010; R125-16, 1-27-2017)

     NAC 645B.008  “Qualified employee” defined. (NRS 645B.021, 645B.060)  “Qualified employee” means a natural person who is designated by a mortgage broker to act on behalf of the mortgage broker and who is approved by the Commissioner pursuant to NAC 645B.055.

     (Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000; A by Div. of Mortgage Lending by R123-08, 4-23-2009)

     NAC 645B.0082  “S.A.F.E. Mortgage Licensing Act” defined. (NRS 645B.060, 645F.292, 645F.293)  “S.A.F.E. Mortgage Licensing Act” means the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, Public Law 110-289, 122 Stat. 2654, Title V, July 30, 2008.

     (Added to NAC by Comm’r of Mortgage Lending by R035-10, eff. 7-22-2010)

     NAC 645B.0084  “Unique identifier” defined. (NRS 645B.060, 645F.292, 645F.293)  “Unique identifier” means a number or other identifier assigned by protocols established by the Registry.

     (Added to NAC by Comm’r of Mortgage Lending by R035-10, eff. 7-22-2010)

     NAC 645B.0085  “Commercial loan” interpreted. (NRS 645B.060)  As used in this chapter and chapter 645B of NRS, the Commissioner will interpret the term “commercial loan” to have the meaning ascribed to “commercial mortgage loan” in NRS 645E.030.

     (Added to NAC by Comm’r of Mortgage Lending by R125-16, eff. 1-27-2017)

     NAC 645B.0086  “Insolvent” interpreted. (NRS 645B.060)  For the purposes of subparagraph (1) of paragraph (b) of subsection 1 of NRS 645B.670, “insolvent” is interpreted to mean that the liabilities of a mortgage broker exceed his or her assets, as calculated by the Commissioner in accordance with generally accepted accounting principles, and the calculation:

     1.  Must exclude any intangible and any amount receivable by the mortgage broker that is related to the intangible; and

     2.  May exclude any shareholder debt that is subordinated.

     (Added to NAC by Comm’r of Mortgage Lending by R035-10, eff. 7-22-2010)

     NAC 645B.0087  “Mobile home” interpreted. (NRS 645B.060, 645F.292, 645F.293)  For the purposes of NRS 645B.0132, the term “mobile home,” as used in the definition of “dwelling” in 15 U.S.C. § 1602(v), is interpreted to include a manufactured home or a trailer if that trailer is used or expected to be used as a residence.

     (Added to NAC by Comm’r of Mortgage Lending by R035-10, eff. 7-22-2010)

     NAC 645B.009  Deposits, disclosures and appraisals: Interpretation of certain statutory terms. (NRS 645B.060, 645B.175, 645B.185, 645B.300)

     1.  The Commissioner will not consider escrow instructions to have been “approved by the parties” within the meaning of subparagraph (2) of paragraph (a) of subsection 1 of NRS 645B.175 if the instructions:

     (a) Are signed by the mortgage broker as attorney-in-fact for any investor with an interest in the loan; and

     (b) Direct that all money relating to the transaction, except money for charges or fees due the mortgage broker, be paid to an owner, partner, director, officer, manager, member or employee of the mortgage broker or a relative of an owner, partner, director, officer, manager, member or employee of the mortgage broker.

     2.  The Commissioner will consider “money paid to a mortgage broker and his or her mortgage agents by a person in full or in partial payment of a loan” within the meaning of subsection 4 of NRS 645B.175 to include money paid to a mortgage broker or his or her mortgage agents by a person pursuant to written escrow instructions if the payment represents money paid in full or in partial repayment of a loan secured by a lien on real property.

     3.  The Commissioner will consider a mortgage broker or mortgage agent to “accept money from an investor to acquire ownership of or a beneficial interest in a loan secured by a lien on real property” within the meaning of NRS 645B.185 and 645B.300 if the mortgage broker or mortgage agent:

     (a) Receives money from an investor to acquire ownership of or a beneficial interest in a loan secured by a lien on real property; or

     (b) Arranges for the investor to pay money to a third party to invest in a loan secured by a lien on real property.

     (Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004) — (Substituted in revision for part of NAC 645B.220)

     NAC 645B.0115  Change of electronic mail address or contact information. (NRS 645B.060, 645F.292, 645F.293)  If an applicant for the issuance or renewal of a license or a person licensed pursuant to chapter 645B of NRS wishes to change his or her electronic mail address or contact information, the applicant or person shall make the change and:

     1.  If the applicant or person is registered with the Registry, notify the Division through the Registry; or

     2.  If the applicant or person is not registered with the Registry, provide written notice directly to the Division.

     (Added to NAC by Comm’r of Mortgage Lending by R035-10, eff. 7-22-2010; A by R125-16, 1-27-2017)

LICENSING AND OPERATION OF MORTGAGE BROKERS

     NAC 645B.016  Qualifications of applicant: Required experience. (NRS 645B.020, 645B.060)

     1.  An applicant for a license as a mortgage broker must have, within the 5 years immediately preceding the date of his or her application, at least 2 years of verifiable experience in the business of lending money for real estate or mortgages.

     2.  As used in this section, “verifiable experience in the business of lending money for real estate or mortgages” means compensated experience engaging in:

     (a) The activities of a mortgage agent;

     (b) Supervising the activities of one or more mortgage agents;

     (c) Underwriting or processing mortgage loans;

     (d) Making loans secured by real property; or

     (e) Any other experience determined to be relevant by the Commissioner.

     [Comm’r of Savings Associations, Mortgage Reg. § 1, eff. 6-29-82] — (NAC A by Comm’r of Financial Institutions, 9-1-94; R045-00, 9-5-2000; A by Comm’r of Mortgage Lending by R058-08, 4-23-2009; R125-16, 1-27-2017) — (Substituted in revision for NAC 645B.010)

     NAC 645B.0165  Qualifications of applicant: Requirements for licensure pursuant to NRS 645B.020. (NRS 645B.060)

     1.  Pursuant to subsection 3 of NRS 645B.020, the Commissioner will not issue a license as a mortgage broker unless the requirements of that subsection have been fulfilled.

     2.  For the purposes of subparagraph (1) of paragraph (b) of subsection 3 of NRS 645B.020, factors considered in determining whether a person has demonstrated financial responsibility include, without limitation:

     (a) Whether the person’s personal credit history indicates any adverse material items, including, without limitation, liens, judgments, disciplinary action, bankruptcies, foreclosures or failures to comply with court-approved payment plans;

     (b) The circumstances surrounding any adverse material items in the person’s personal credit history; and

     (c) Any instance of fraud, misrepresentation, dishonest business practices, the mishandling of trust funds or other types of comparable behavior.

     3.  For the purposes of subparagraph (2) of paragraph (b) of subsection 3 of NRS 645B.020, the Commissioner will not consider a person to have been convicted or entered a plea of guilty or nolo contendere if the conviction or plea has been pardoned or vacated.

     4.  For the purposes of subparagraph (4) of paragraph (b) of subsection 3 of NRS 645B.020, a license shall not be considered to be revoked or suspended if the revocation or suspension was subsequently vacated.

     (Added to NAC by Comm’r of Mortgage Lending by R035-10, eff. 7-22-2010)

     NAC 645B.017  Activity not constituting services as mortgage broker. (NRS 645B.060, 645F.292, 645F.293)  A person does not hold himself or herself out as being able to perform the services described in NRS 645B.0127 if the person:

     1.  Is in compliance with the S.A.F.E. Mortgage Licensing Act and any regulations adopted pursuant thereto; and

     2.  Only offers to provide money in the secondary mortgage market to acquire or invest in loans secured by an interest in real property to:

     (a) A mortgage broker licensed pursuant to chapter 645B of NRS; or

     (b) A person exempt from the provisions of chapter 645B of NRS.

     (Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R035-10, 7-22-2010; R125-16, 1-27-2017)

     NAC 645B.020  Documentation required with application for license; conditional approval; effect of failure to respond to written request for information in timely manner. (NRS 645B.020, 645B.060, 645F.292, 645F.293)

     1.  An applicant must submit with his or her application for a license as a mortgage broker pursuant to chapter 645B of NRS:

     (a) A copy of the applicant’s state business license, when applicable, the applicant’s application for such a license if the applicant has not obtained one or evidence that the applicant is exempt from the requirement to obtain a state business license.

     (b) If the applicant intends to operate under an assumed or fictitious name, a copy of the certificate filed by the applicant pursuant to chapter 602 of NRS indicating the assumed or fictitious name of the applicant. An applicant may not use more than one assumed or fictitious name.

     (c) If the applicant is not a natural person, a copy of the documents that formed the applicant and its operating documents and any amendments thereto.

     (d) Evidence that the applicant has met the requirements imposed by the S.A.F.E. Mortgage Licensing Act.

     (e) A current electronic mail address for the applicant or the person designated by the applicant for contact with regulators.

     (f) The name of each mortgage agent who will be employed by the applicant at the location.

     2.  If an applicant has received a letter of conditional approval of his or her application from the Division which imposes additional requirements that the applicant must satisfy to obtain a license, the applicant must comply with those requirements within 30 days after the date on which the letter was issued by the Division. If the applicant does not satisfy all additional requirements set forth in the letter within the period prescribed in this subsection, the conditional approval of the application will be deemed to have expired and the applicant must reapply to obtain a license. The Commissioner may, for good cause, extend the 30-day period prescribed in this subsection.

     3.  An application shall be deemed abandoned if the applicant fails to respond, within 30 calendar days after the date of the request or on or before a later date set by the Commissioner, to any written request by the Division for information or records required in connection with the investigation and evaluation of the qualifications and suitability for licensure of the applicant, its qualified employee or, if applicable, its control persons.

     [Comm’r of Savings Associations, Mortgage Reg. § 2, eff. 6-29-82] — (NAC A by Comm’r of Financial Institutions by R045-00, 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004; R058-08, 4-23-2009; R035-10, 7-22-2010; R125-16, 1-27-2017)

     NAC 645B.030  Branch office: Prerequisites and name for issuance of license; responsibilities of mortgage broker; conditional approval; effect of failure to respond to written request for information in timely manner. (NRS 645B.020, 645B.060, 645F.292, 645F.293)

     1.  An applicant must submit with his or her application for a license for a branch office:

     (a) The name, residence address and telephone number of the qualified employee designated to manage and supervise the branch office;

     (b) The name of each mortgage agent who intends to work at the branch office; and

     (c) Evidence that the applicant has met the requirements imposed by the S.A.F.E. Mortgage Licensing Act, if applicable.

     2.  A license for a branch office may be issued only in the name in which the mortgage broker is licensed to conduct business at his or her principal office.

     3.  A mortgage broker is responsible for and shall supervise:

     (a) Each branch office of the mortgage broker; and

     (b) Each qualified employee, mortgage agent and other staff member employed at a branch office of the mortgage broker.

     4.  If an applicant has received from the Division a letter of conditional approval of his or her application for a license for a branch office which imposes additional requirements that the applicant must satisfy to obtain a license for a branch office, the applicant must comply with those requirements within 30 days after the date on which the Division issued the letter. If the applicant does not satisfy all additional requirements set forth in the letter within the period prescribed in this subsection, the conditional approval of the application shall be deemed to have expired and the applicant must reapply to obtain a license for a branch office. The Commissioner may, for good cause, extend the 30-day period prescribed in this subsection.

     5.  An application for a license for a branch office shall be deemed abandoned if the applicant fails to respond, within 30 calendar days of the date after the request or on or before a later date set by the Commissioner, to any written request by the Division for information or records required in connection with the investigation and evaluation of the qualifications and suitability for licensure of the applicant, its qualified employee or, if applicable, its control persons.

     [Comm’r of Savings Associations, Mortgage Reg. § 3, eff. 6-29-82] — (NAC A by Admstr. of Financial Institutions, 6-29-84; A by Comm’r of Financial Institutions by R045-00, 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004; R058-08, 4-23-2009; R035-10, 7-22-2010; R125-16, 1-27-2017)

     NAC 645B.032  Sharing office space with another business. (NRS 645B.060)

     1.  Except as otherwise provided in subsection 2, a mortgage broker may share office space with any other business if each business has a designated space within the office space and each business is separately identifiable by a sign or other method of identification within the office space.

     2.  A mortgage broker may share office space with a business licensed pursuant to chapter 645 of NRS if:

     (a) Each business has separate and distinct office space and signs such that a reasonable customer would understand which business he or she is transacting with at all times;

     (b) Each business operates as a separate legal entity;

     (c) Each business maintains separate accounts, books and records;

     (d) Each business maintains separate licenses; and

     (e) The businesses are subsidiaries of the same parent corporation or are otherwise affiliated businesses.

     (Added to NAC by Comm’r of Mortgage Lending by R087-04, eff. 8-31-2004)

     NAC 645B.035  Use of fictitious name. (NRS 645B.020, 645B.060)

     1.  A mortgage broker shall not conduct business using a fictitious name unless the mortgage broker:

     (a) Complies with chapter 602 of NRS;

     (b) Files with the Division a certified copy, issued by the appropriate county clerk, of the certificate filed by the mortgage broker pursuant to chapter 602 of NRS; and

     (c) Receives from the Division a license or certificate of exemption indicating the fictitious name.

     2.  If a mortgage broker conducts business using a fictitious name pursuant to this section, the mortgage broker may conduct business using a new fictitious name only if the mortgage broker:

     (a) Obtains a certified copy, issued by the appropriate county clerk, of the certificate filed by the mortgage broker pursuant to chapter 602 of NRS indicating the new fictitious name;

     (b) Files with the Division, not later than 10 calendar days after obtaining the certified copy pursuant to paragraph (a):

          (1) The certified copy obtained pursuant to paragraph (a); and

          (2) The current license or certificate of exemption of the mortgage broker; and

     (c) Receives from the Division an amended license or certificate of exemption indicating the new fictitious name.

     3.  A mortgage broker may conduct business using more than one fictitious name only if the mortgage broker obtains a separate license issued pursuant to chapter 645B of NRS for each fictitious name under which he or she intends to do business. A mortgage broker who conducts business in this State using more than one fictitious name is responsible for the conduct of each qualified employee, mortgage agent and other employee associated with the mortgage broker regardless of the license or name under which the conduct takes place.

     (Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004)

     NAC 645B.037  Use of same name, confusingly similar name or name not approved by Commissioner; display of license. (NRS 645B.060)

     1.  The Commissioner will not issue a license or certificate of exemption with a name that is the same as or confusingly similar to a name on a license or certificate of exemption previously issued by the Commissioner.

     2.  A mortgage broker shall not advertise or conduct business as a mortgage broker using a name other than the name approved by the Commissioner and indicated on the license or certificate of exemption issued by the Commissioner to the mortgage broker.

     3.  Each mortgage broker shall conspicuously display each license issued to the mortgage broker pursuant to chapter 645B of NRS at the address of the office location which is identified on the license.

     (Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R125-16, 1-27-2017)

     NAC 645B.0375  Professional conduct. (NRS 645B.060, 645F.255, 645F.520)

     1.  In addition to any other duty imposed by this chapter or chapter 645B of NRS or any other applicable law, a mortgage broker who acts as a mortgage servicer in connection with one or more mortgage loans which the mortgage broker made or arranged under his or her license as a mortgage broker:

     (a) Has a duty of good faith and fair dealing in the communications, transactions and course of dealings of the mortgage broker with each borrower in connection with the servicing of the mortgage loan of the borrower;

     (b) Shall:

          (1) Safeguard and account for any money handled for the borrower and, if applicable, investor;

          (2) Follow reasonable and lawful instructions from the borrower and, if applicable, investor;

          (3) Act with reasonable skill, care and diligence;

          (4) Comply with all applicable federal laws and regulations relating to mortgage servicing, including, without limitation, the Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2601 et seq., and the Truth in Lending Act, 15 U.S.C. §§ 1601 et seq., and any regulations adopted pursuant thereto;

          (5) File annually with the Commissioner a complete schedule of the ranges of costs and fees charged to a borrower by the mortgage broker for the activities of the mortgage broker relating to mortgage servicing; and

          (6) File quarterly, directly with the Commissioner or through the Registry to the Commissioner, on a date and in a form prescribed by the Commissioner, a report of the mortgage servicing activity that the mortgage broker performs in this State on loans that the mortgage broker made or arranged under his or her license as a mortgage broker issued pursuant to chapter 645B of NRS, which must include, without limitation:

               (I) The total number of mortgage loans serviced by the mortgage broker;

               (II) The total dollar amount of mortgage loans serviced by the mortgage broker;

               (III) The types and characteristics of mortgage loans serviced by the mortgage broker; and

               (IV) Any other information required by the Commissioner; and

     (c) Shall not:

          (1) Transfer the servicing of a mortgage loan to another person unless the person holds a license as a mortgage servicer or is a person exempt from licensing as a mortgage servicer pursuant to chapter 645F of NRS and chapter 645F of NAC;

          (2) Directly or indirectly employ any scheme, device or artifice to defraud or mislead a borrower or investor or to defraud any person;

          (3) Fail to apply mortgage loan payments in accordance with a servicing agreement or the terms of a note; or

          (4) Fail to properly apply payments to an escrow account, fail to place in a trust or escrow account held by a federally insured depository financial institution all money that is received by the mortgage broker from the borrower or fail to account for all money received or disbursed for a trust or escrow account.

     2.  In addition to any other remedies provided by law, a violation of any applicable federal laws or regulations relating to mortgage servicing shall be deemed to be a violation of this section and a basis for the imposition of disciplinary action by the Commissioner pursuant to this chapter and chapter 645B of NRS.

     3.  As used in this section, “mortgage servicer” has the meaning ascribed to it in NRS 645F.063.

     (Added to NAC by Comm’r of Mortgage Lending by R125-16, eff. 1-27-2017)

     NAC 645B.038  Insider loans: Limitations and conditions. (NRS 645B.060)

     1.  Insider loans made or arranged by a mortgage broker are subject to the following limitations and conditions:

     (a) The lending limit must not exceed 25 percent of the total dollar amount of the outstanding balances of investor-funded loans which were made or arranged by the mortgage broker or 100 percent of the mortgage broker’s net worth as described in NAC 645B.095, whichever is greater.

     (b) A private investor who provides money to invest in an insider loan may not waive the provisions of subsection 1 of NAC 645B.080.

     (c) The mortgage broker shall specifically identify on each monthly report required by NRS 645B.080 any insider loan made by the mortgage broker.

     2.  As used in this section:

     (a) “Insider” means a control person, mortgage agent or employee of a mortgage broker.

     (b) “Insider loan” means an extension of credit to an insider. For purposes of this paragraph, “extension of credit” includes, without limitation, a new loan or a loan renewal, a line of credit or any other financial right structured in any manner and arranged by a mortgage broker as a means for the borrower to defer payment on an existing debt or to incur a debt and defer immediate payment.

     (c) “Lending limit” means the maximum dollar amount permitted for the aggregate of insider loans arranged by a mortgage broker.

     (Added to NAC by Comm’r of Mortgage Lending by R056-08, eff. 4-23-2009; A by R125-16, 1-27-2017)

EXEMPTIONS

     NAC 645B.044  Burden of demonstrating qualification for exemption from provisions of chapter 645B of NRS. (NRS 645B.016, 645B.060, 645F.292, 645F.293)  A person who claims an exemption from the provisions of chapter 645B of NRS pursuant to NRS 645B.015 has the burden of demonstrating that the person qualifies for such an exemption.

     (Added to NAC by Comm’r of Mortgage Lending by R058-08, eff. 4-23-2009; A by R035-10, 7-22-2010; R125-16, 1-27-2017)

     NAC 645B.045  Unexpired certificate of exemption. (NRS 645B.060)  A person who has an unexpired certificate of exemption issued pursuant to chapter 645B of NRS shall be deemed to have an unexpired certificate of exemption issued pursuant to chapter 645E of NRS.

     (Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000)

SUPERVISION BY COMMISSIONER

General Provisions

     NAC 645B.055  Qualified employee: Designation and approval. (NRS 645B.021, 645B.060, 645F.292, 645F.293)

     1.  Every person, other than a natural person, doing business as a mortgage broker in this State shall designate a natural person as a qualified employee who may, upon approval of the Commissioner, act on behalf of the mortgage broker.

     2.  The Commissioner will approve the qualified employee designated pursuant to subsection 1 if the qualified employee is a natural person who:

     (a) Is licensed in good standing as a mortgage agent;

     (b) Is designated by a mortgage broker to act on behalf of the mortgage broker and to supervise the conduct of the business of the mortgage broker and the mortgage agents and other staff members employed by the mortgage broker at the licensed office location;

     (c) Will be present at the licensed office location for which he or she is the qualified employee the majority of the time that the office is open to the public; and

     (d) In the immediately preceding 5 years, has at least 2 years of verifiable experience in the business of lending money for real estate or mortgages.

     3.  If the qualified employee designated pursuant to subsection 1 is not approved by the Commissioner pursuant to subsection 2 or ceases to be a qualified employee as defined in NAC 645B.008, the mortgage broker shall designate another qualified employee pursuant to subsection 1 not later than:

     (a) Thirty calendar days after the date that:

          (1) The Commissioner notifies the mortgage broker that the initial qualified employee designated pursuant to subsection 1 is not approved; or

          (2) The qualified employee ceases to be a qualified employee as defined in NAC 645B.008; or

     (b) A date after the date described in paragraph (a) if agreed to by the Commissioner.

     4.  As used in this section, “verifiable experience in the business of lending money for real estate or mortgages” has the meaning ascribed to it in NAC 645B.016.

     (Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000; A by Div. of Mortgage Lending by R123-08, 4-23-2009; A by Comm’r of Mortgage Lending by R035-10, 7-22-2010; R125-16, 1-27-2017)

     NAC 645B.057  Change in control or control person of mortgage broker; change of location or closure of principal or branch office; surrender of license. (NRS 645B.060, 645B.095, 645F.292, 645F.293)

     1.  Any material change in the control persons of a mortgage broker must be reported to the Commissioner at least 30 calendar days before the change. Each new control person must submit to a background investigation in the manner provided in NRS 645B.020. A new control person may not participate in the management of a mortgage broker until the person is approved by the Commissioner.

     2.  A change of control of a mortgage broker is not effective until the change of control is approved by the Commissioner. A transfer, sale or conveyance of outstanding voting stock or ownership interest in a mortgage broker that will result in the cumulative transfer, from the date upon which the license of the mortgage broker was issued, of 25 percent or more of the outstanding voting stock or ownership interest in the mortgage broker is deemed to constitute a change of control.

     3.  At least 15 days before a person acquires stock or ownership in a mortgage broker as a result of a transfer that constitutes a change of control, the mortgage broker shall make a written application to the Commissioner for approval of the change of control. The application must include, without limitation:

     (a) The name and percentage of ownership of each person who has obtained or is obtaining stock or ownership resulting in a cumulative transfer of 25 percent or more of the outstanding voting stock or ownership interest in the mortgage broker; and

     (b) A personal interrogatory and a complete set of fingerprints of each such person or, if the applicant is not a natural person, each control person of the applicant, in a form prescribed by the Commissioner, and written consent authorizing the Commissioner to forward the fingerprints to the Central Repository for Nevada Records of Criminal History for submission to the Federal Bureau of Investigation for its report in the manner provided in NRS 645B.020.

     4.  The Commissioner will conduct an investigation of each application submitted pursuant to subsection 3 to determine whether the requirements necessary for licensure pursuant to this chapter and chapter 645B of NRS are met.

     5.  A mortgage broker who wishes to change the location of his or her principal office or branch office must file a request with the Commissioner, return his or her original license for a principal office or branch office to the Commissioner and submit any additional information required by the Commissioner. A mortgage broker may not change the location of his or her principal office or a branch office until the Commissioner has approved the transfer and issued a new license reflecting the change in location.

     6.  A mortgage broker may not surrender his or her license or close his or her principal office or a branch office until:

     (a) The mortgage broker has returned his or her original license; and

     (b) The Commissioner has approved the surrender or closure.

     7.  The request for approval of the surrender of the license or closure of the principal office of the mortgage broker or a branch office must contain the following information:

     (a) The status of any incomplete applications for mortgage loans and the manner in which the loans will be finalized;

     (b) An accounting of any trust account maintained by the mortgage broker and the plan for distribution of money in the account;

     (c) If the mortgage broker is servicing any loans made or arranged by the mortgage broker under his or her license as a mortgage broker, a listing of those loans and the plan for transferring those loans to another mortgage servicer;

     (d) If any mortgage agent associated with or employed by the mortgage broker has been terminated pursuant to subsection 3 of NRS 645B.450, evidence of the termination; and

     (e) In regard to the records of the mortgage broker maintained pursuant to subsection 1 of NRS 645B.080 and subsection 5 of NAC 645B.080:

          (1) The address where the records will be maintained; and

          (2) The name, telephone number and mailing address of the person who will be responsible for the maintenance of the records.

     8.  The Commissioner may require the person acquiring stock or ownership in a mortgage broker pursuant to subsection 2 to meet the requirements of the S.A.F.E. Mortgage Licensing Act, including, without limitation, submitting information to the Registry.

     9.  As used in this section, “change of control” has the meaning ascribed to it in NRS 645B.095.

     [Comm’r of Savings Associations, Mortgage Reg. § 4, eff. 6-29-82] — (NAC A by Admstr. of Financial Institutions, 6-29-84; A by Comm’r of Financial Institutions by R045-00, 9-5-2000; A by Comm’r of Mortgage Lending by R058-08, 4-23-2009; R035-10, 7-22-2010; R125-16, 1-27-2017)

     NAC 645B.060  Fees for supervision and related activities: Amount; collection; failure to pay; accounting of time billed upon request. (NRS 645B.050, 645B.060, 645F.280)

     1.  Except as otherwise provided in subsection 2, the Commissioner will annually charge and collect a fee for supervision from each mortgage broker. The amount of the fee for supervision will be calculated pursuant to subsection 2. The Commissioner will annually bill each mortgage broker for the fee for supervision. The fee for supervision must be paid within 30 calendar days after the date of the invoice. Any payment received after that date must include a penalty of 10 percent of the fee plus an additional 1 percent of the fee for each complete month, or portion of the last month, that the fee is not paid.

     2.  A mortgage broker whose annual volume of loans reported to the Commissioner pursuant to NRS 645B.080 is:

     (a) Less than $10,000,000 will not be assessed a fee for supervision pursuant to subsection 1.

     (b) At least $10,000,000 shall pay a fee for supervision pursuant to subsection 1 at a rate of one-half cent per $1,000 of the annual volume of loans reported to the Commissioner pursuant to NRS 645B.080.

     3.  Except as otherwise provided in this subsection, the Commissioner will charge and collect a fee of $60 per hour from each mortgage broker for any examination, audit, investigation or hearing conducted pursuant to chapter 645B of NRS. The Commissioner may charge a fee equivalent to the estimated or actual fee charged to the Division for the time of an attorney required in any examination, investigation or hearing conducted pursuant to chapter 645B of NRS.

     4.  The Commissioner will bill each mortgage broker upon the completion of the activity for the fee established in subsection 3. The fee must be paid within 30 calendar days after the date of the invoice. Except as otherwise provided in this subsection, any payment received after that date must include a penalty of 10 percent of the fee plus an additional 1 percent of the fee for each complete month, or portion of the last month, that the fee is not paid. The Commissioner may waive the penalty for good cause. Upon written request by a mortgage broker, the Division will provide an accounting of the time billed to the mortgage broker pursuant to this subsection.

     5.  Failure of a mortgage broker to pay the fee required in subsection 1 or 3 as provided in this section constitutes grounds for the imposition of any discipline authorized pursuant to NRS 645B.670, including, without limitation, the revocation of his or her license.

     [Comm’r of Savings Associations, Mortgage Reg. § 6, eff. 6-29-82] — (NAC A by Admstr. of Financial Institutions, 6-29-84; A by Comm’r of Financial Institutions, 4-20-88; 11-27-89, eff. 7-1-89; R045-00, 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004; R035-10, 7-22-2010; R125-16, 1-27-2017)

     NAC 645B.061  Grounds for denial of renewal of license. (NRS 645B.060, 645F.292, 645F.293)  The Commissioner will not renew the license of a mortgage broker or mortgage agent if the mortgage broker or mortgage agent:

     1.  Has not paid all fees, fines and assessments owed to the Division or this State;

     2.  Is not properly registered with the Registry;

     3.  Fails to provide any required annual financial statements or reports of condition to the Division or Registry; or

     4.  Fails to provide any other item required by federal or state law or regulation.

     (Added to NAC by Comm’r of Mortgage Lending by R058-08, eff. 4-23-2009; A by R035-10, 7-22-2010; R125-16, 1-27-2017)

Examinations, Audits and Investigations

     NAC 645B.064  Assessment for costs related to audits and examinations. (NRS 645B.060)

     1.  Each mortgage broker shall pay to the Division an annual assessment as required pursuant to NRS 645F.180 to cover the costs related to the employment of a certified public accountant and the performance of audits and examinations conducted by the Division.

     2.  The Division will bill each mortgage broker for the assessment. The assessment must be paid within 30 calendar days after the date the bill is received.

     3.  A charge of 10 percent of the assessment will be imposed on any mortgage broker whose assessment is received by the Division after the date on which the assessment is due. The Commissioner may waive the penalty for good cause.

     (Added to NAC by Comm’r of Financial Institutions, eff. 12-17-87; A 5-27-92; R045-00, 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004)

     NAC 645B.066  Authority of Commissioner or designee in conducting examination, investigation or audit. (NRS 645B.060)  For the purposes of conducting an examination, investigation or periodic or special audit of a mortgage broker pursuant to this chapter or chapter 645B of NRS:

     1.  The Commissioner or his or her designee may:

     (a) Require the mortgage broker to produce, for the purposes of the examination, audit or investigation, all documents:

          (1) Relating to business conducted by the mortgage broker pursuant to this chapter or chapter 645B of NRS;

          (2) Required to be kept by the mortgage broker pursuant to any federal or state law or regulation; or

          (3) Related to the operation of the business of the mortgage broker or any affiliated business that conducts business activities which are directly related to the business of the mortgage broker; and

     (b) Inspect and copy any documents which are in the possession, control or custody of the mortgage broker and which are related to business conducted pursuant to this chapter or chapter 645B of NRS.

     2.  The Commissioner may:

     (a) Employ or retain attorneys, accountants or other professionals and specialists as examiners, auditors or investigators to conduct or assist in the conduct of examinations, audits and investigations;

     (b) Enter into agreements or relationships with other governmental officials and regulatory associations to improve efficiency and reduce regulatory burden by sharing resources, standardized or uniform methods or procedures and documents, records, information or evidence obtained pursuant to this chapter or chapter 645B of NRS;

     (c) Use, hire, contract with or employ analytical systems, methods or software, whether publicly or privately available, to examine or investigate the mortgage broker or other person subject to chapter 645B of NRS;

     (d) Accept and rely upon reports of examinations or investigations made by other state or federal governmental officials; and

     (e) Accept an audit report prepared by an independent certified public accountant for the mortgage broker or other person subject to chapter 645B of NRS in the course of an examination or investigation covering the same general subject matter as the audit. The Commissioner will incorporate such an audit report in the report of examination, report of investigation or other writing of the Commissioner.

     (Added to NAC by Comm’r of Mortgage Lending by R087-04, eff. 8-31-2004; A by R125-16, 1-27-2017)

     NAC 645B.0665  Proof of adverse change in financial condition. (NRS 645B.060)  For the purposes of paragraph (b) of subsection 4 of NRS 645B.060, an adverse change in financial condition:

     1.  Is not proven solely by a decrease in income from any previous period if the mortgage broker remains profitable; and

     2.  May be shown by material receivables or payables to related parties, material off-balance sheet commitments, contingent liabilities or other identified concerns related to the deterioration of net worth or liquidity.

     (Added to NAC by Comm’r of Mortgage Lending by R035-10, eff. 7-22-2010)

     NAC 645B.067  Rating of mortgage broker upon completion of examination. (NRS 645B.060)  Upon completion of an examination of a mortgage broker, the examiner shall rate the mortgage broker on a scale of “1” to “5,” as follows:

     1.  A rating of “1” indicates that the mortgage broker and the management of the mortgage broker have demonstrated a high degree of compliance with applicable laws and regulations. A rating of “1” may be given if there is a minor violation or deficiency, but only if the mortgage broker acted to correct the violation or deficiency immediately and the action taken by the mortgage broker is likely to prevent future violations or deficiencies.

     2.  A rating of “2” indicates that the mortgage broker and the management of the mortgage broker have demonstrated substantial compliance with applicable laws and regulations and that any deficiencies noted in the report made by the examiner pursuant to NAC 645B.068 can be corrected by the mortgage broker with a minimum of regulatory supervision. A rating of “2” may be given if there is more than one minor violation or deficiency, but only if the mortgage broker acted to correct the violations or deficiencies immediately and the action taken by the mortgage broker is likely to prevent future violations or deficiencies.

     3.  A rating of “3” indicates that the mortgage broker and the management of the mortgage broker have demonstrated less than satisfactory compliance with applicable laws and regulations and that regulatory supervision is required for the correction of the violations and deficiencies noted in the report made by the examiner pursuant to NAC 645B.068. A rating of “3” may be given if there were minor violations or deficiencies from a previous examination that were not corrected.

     4.  A rating of “4” indicates that the mortgage broker and the management of the mortgage broker have demonstrated substantial lack of compliance with applicable laws and regulations and that immediate remedial action is required for the correction of the violations and deficiencies noted in the report made by the examiner pursuant to NAC 645B.068. The mortgage broker will be subject to close regulatory supervision, and the examiner will recommend disciplinary action against the mortgage broker to the Commissioner.

     5.  A rating of “5” indicates that the mortgage broker and the management of the mortgage broker have demonstrated unsatisfactory compliance with applicable laws and regulations and that immediate remedial action is required for the correction of the violations and deficiencies noted in the report made by the examiner pursuant to NAC 645B.068 and may include action by the Commissioner to take possession of the business and assets of the mortgage broker. The examiner will recommend disciplinary action against the mortgage broker to the Commissioner.

     (Added to NAC by Comm’r of Mortgage Lending by R087-04, eff. 8-31-2004)

     NAC 645B.068  Results of examination: Preparation and review of draft report; final report; confidentiality; action by Commissioner. (NRS 645B.060, 645B.090)

     1.  Not more than 30 days after the completion of an examination of a mortgage broker, the examiner that performed the examination shall prepare a draft report of the examination and provide the draft report to appropriate personnel of the Division. The draft report must include only:

     (a) Facts that are contained in the files, books, records or other documents of the mortgage broker that were examined by the examiner;

     (b) Facts that are contained in statements made by officers or agents of the mortgage broker or other persons that the examiner interviewed concerning the mortgage broker; and

     (c) Conclusions and recommendations that are reasonably supported by the facts that are included in the draft report, including, but not limited to, the rating given to the mortgage broker pursuant to NAC 645B.067.

     2.  Not more than 15 days after the draft report of an examination is received by the Division, the Commissioner or his or her designee will deliver to the mortgage broker who was examined:

     (a) A copy of the draft report; and

     (b) Notice that the mortgage broker has not more than 30 days, unless the Commissioner, for good cause, allows a longer period, to review the draft report and submit to the Commissioner, in writing, any comments regarding or objections to matters contained in the draft report.

     3.  If a mortgage broker received a rating of “3,” “4” or “5” and submitted written comments or objections within the period specified in subsection 2, the Commissioner or his or her designee will:

     (a) Not more than 15 days after the last day on which the mortgage broker could submit written comments or objections pursuant to subsection 2, hold an informal meeting with the mortgage broker regarding the draft report; and

     (b) Review the draft report, together with the written submissions or objections made by the mortgage broker and any relevant portions of the working papers of the examiner, and, not more than 15 days after the date on which the informal meeting was held pursuant to paragraph (a):

          (1) Adopt the draft report as filed;

          (2) Adopt the draft report with modifications;

          (3) Provide the mortgage broker with an opportunity for a formal hearing; or

          (4) Direct the examiner to reopen the examination to obtain additional data, documents or information and, if necessary, file a new draft report pursuant to subsection 1. If the findings of the initial draft report are supported by the findings of the examiner after completion of the reopened examination, the mortgage broker is responsible for the costs attributable to the reopened examination pursuant to NRS 645B.060.

     4.  If a mortgage broker:

     (a) Received a rating of “1” or “2” on an examination pursuant to NAC 645B.067 and submitted written comments or objections within the period specified in subsection 2; or

     (b) Did not file a written comment or objection to a draft report within the period specified in subsection 2,

Ê the draft report will be deemed to be the final report of the examination.

     5.  Pursuant to NRS 645B.060, the results of an examination are not open to public inspection until the requirements set forth in subsection 3 are completed.

     6.  If the examination and report reveal that a mortgage broker is operating in violation of this chapter, chapter 645B of NRS or a previous order of the Commissioner, the Commissioner may order the mortgage broker to take any action the Commissioner deems necessary or appropriate to correct the violation. The Commissioner may also take disciplinary action pursuant to NRS 645B.670.

     7.  The Commissioner may, for good cause, extend any period specified in this section that is applicable to an examiner, the Commissioner or his designee for an additional period of not more than 15 days.

     (Added to NAC by Comm’r of Mortgage Lending by R087-04, eff. 8-31-2004)

Records and Reports

     NAC 645B.070  Monthly reports. (NRS 645B.060, 645B.080)

     1.  Each mortgage broker shall submit, for each month, on a form approved by the Commissioner, a report on the volume of loans arranged in that month. If the mortgage broker is performing loan servicing and maintains any accounts described in subsection 4 of NRS 645B.175, the monthly report must include the information required pursuant to subsections 2 and 3. The monthly report must be submitted to the Commissioner by the 15th day of the month following the month for which the report was made. If no loans were arranged in that month, the report must state that fact.

     2.  If, on the last day of any month, a debtor has failed to make two or more consecutive payments in accordance with the terms of the loan, a mortgage broker who is performing loan servicing and maintains any accounts described in subsection 4 of NRS 645B.175 shall:

     (a) Include in his or her report to the Commissioner:

          (1) The name, address and telephone number of the debtor;

          (2) The total number and amount of any payments made on the current delinquency;

          (3) The outstanding balance of the loan and any accrued interest on the last day of the month for which the report is submitted;

          (4) A statement of whether the loan has been declared to be in default and, if so, the nature of any actions that have been taken because of the default;

          (5) The date on which the mortgage broker sent the notice to investors required pursuant to paragraph (b) of this subsection and paragraph (b) of subsection 1 of NRS 645B.260; and

          (6) If the loan is an insider loan, a statement disclosing that fact.

     (b) Mail a notice containing the following information to the last known address of each investor who owns a beneficial interest in the loan not later than 15 days after the last day of each such month:

          (1) The name, address and telephone number of the debtor;

          (2) The total number of months and days that the debtor has failed to make a payment;

          (3) The outstanding balance of the loan and any accrued interest on the last day of the month for which the notice is submitted; and

          (4) A statement of whether the loan has been declared to be in default and, if so, the nature of any actions that have been taken because of the default.

     3.  If the mortgage broker is not servicing any loans in which a debtor has failed to make two or more consecutive payments in accordance with the terms of the loan, the monthly report required pursuant to subsection 1 must state that fact.

     4.  The mortgage broker must comply with the provisions of subsection 2 each month until:

     (a) The debtor or his or her designee remedies the delinquency in payments and any default; or

     (b) The lien securing the loan is extinguished.

     5.  The Commissioner may refuse to renew the license of a mortgage broker who has not submitted a monthly report required by subsection 1 for 1 or more of the preceding 12 months.

     6.  As used in this section, “insider loan” has the meaning ascribed to it in NAC 645B.038.

     [Comm’r of Savings Associations, Mortgage Reg. § 7, eff. 6-29-82] — (NAC A by Admstr. of Financial Institutions, 6-29-84; A by Comm’r of Financial Institutions by R045-00, 9-5-2000; A by Comm’r of Mortgage Lending by R056-08, 4-23-2009)

     NAC 645B.072  “Complete and suitable records” interpreted for purposes of NRS 645B.080. (NRS 645B.060, 645B.080)  As used in NRS 645B.080, the Commissioner interprets “complete and suitable records” to mean all books, accounts, records and documents of the business conducted by the mortgage broker which enable the Commissioner to determine whether the business of the mortgage broker is conducted in compliance with this chapter, chapter 645B of NRS and any other applicable law. The term includes, without limitation:

     1.  For a loan secured by a dwelling, a file that includes, but is not limited to, the following documents, if applicable to the type and purpose of the loan:

     (a) The real estate sales contract;

     (b) Escrow instructions;

     (c) The preliminary title report;

     (d) The loan application, including, but not limited to, any attachments or supplements;

     (e) An appraisal report or any other independent assessment of the value of the mortgaged property;

     (f) Any verification of representations made by the consumer on the application for a mortgage;

     (g) A credit report;

     (h) Any commitments made by the lender to the consumer, including, but not limited to, a commitment to guarantee the consumer a certain interest rate and a commitment to fund the loan; and

     (i) Any disclosures required by state or federal law.

     2.  For a loan secured by commercial property, a file that must include all the items required pursuant to subsection 1, if applicable.

     3.  For a loan brokered to a private investor, a file that must include all the items required pursuant to subsection 1, if applicable, and any additional documents or disclosures required pursuant to this chapter, chapter 645B of NRS or federal law, including, but not limited to:

     (a) The original documents subject to the provisions of NAC 645B.080 or 645B.215;

     (b) All disclosures required pursuant to NRS 645B.185 and 645B.186, and NAC 645B.210 and 645B.220; and

     (c) If the mortgage broker maintains any account pursuant to NRS 645B.175, the mortgage broker must include records that demonstrate compliance with the provisions of NRS 645B.115 and NAC 645B.150 and 645B.160 and any other applicable law.

     4.  For a loan funded by the mortgage broker, a file that must include all the items required pursuant to subsection 1 and all closing documentation, including, but not limited to, a recorded or confirmed deed of trust, the title insurance policy, the note, the hazard insurance policy and any subsequent assignment to additional investors. Assignments to private investors must comply with all documentation requirements of this chapter and chapter 645B of NRS.

     5.  For a mortgage loan made or arranged by the mortgage broker pursuant to chapter 645B of NRS for which the mortgage broker is acting as the mortgage servicer, a file that includes, but is not limited to, the items required pursuant to subsection 1, if applicable to the type and purpose of the loan:

     (a) A loan history for each mortgage loan upon which payments are received or made by the mortgage broker which itemizes the amount and date of each payment and the unpaid balance at all times;

     (b) The original or an exact copy of each note, mortgage, deed of trust or other evidence of indebtedness and any assignment;

     (c) The name and address of the mortgage broker or lender, if any, involved in the mortgage loan transaction;

     (d) A copy of any servicing agreement;

     (e) A copy of any disclosures or notifications provided to the borrower which are required by state or federal law or regulation;

     (f) A copy of any bankruptcy plan approved in a proceeding filed by a borrower or co-owner of real property subject to a mortgage loan;

     (g) A communication log which documents all verbal or written communications with a borrower or a borrower’s representative; and

     (h) A copy of all notices sent to the borrower relating to any foreclosure proceeding filed against the encumbered property.

     6.  Any additional books and records that must be maintained or readily accessible at each place of business of the mortgage broker, including, but not limited to, any branch office as applicable to the operations of the mortgage broker, including:

     (a) Any book or record that evidences compliance with applicable federal and state laws and regulations;

     (b) A copy of each item of advertising material that was published or distributed by or on behalf of the mortgage broker in the format in which the material was published or distributed;

     (c) A copy of any written complaint against the mortgage broker, together with all correspondence, notes, responses and other documentation related to the disposition of the complaint;

     (d) All checkbooks, check registers, bank statements, deposit slips, withdrawal slips, cancelled checks and other records that relate to the business of the mortgage broker;

     (e) Copies of all federal tax withholding forms, reports of income for federal taxation and evidence of payments to all employees, independent contractors and other persons that worked for the mortgage broker;

     (f) Copies of all documents evidencing a contractual relationship between the mortgage broker and any third-party provider of services related to mortgages, including, but not limited to, contracts, invoices, billings and remittances to the third-party provider of services related to mortgages, by or on behalf of the mortgage broker;

     (g) Copies of all material correspondence related to the business of the mortgage broker, including, but not limited to, electronic messages; and

     (h) Copies of all reports, audits, examinations, inspections, reviews, investigations or other similar activities relating to the business of the mortgage broker performed by any third party, including, but not limited to, any regulatory or supervisory authority.

     (Added to NAC by Comm’r of Mortgage Lending by R087-04, eff. 8-31-2004; A by R058-08, 4-23-2009; R125-16, 1-27-2017)

     NAC 645B.077  Retention and maintenance of certain records. (NRS 645B.060, 645B.080)

     1.  The mortgage broker shall retain records of all his or her completed mortgage transactions for a period of at least 4 years after the date of the last activity relating to the transaction.

     2.  The mortgage broker shall retain applications for mortgages that were denied or withdrawn for a period of at least 1 year or as otherwise required by federal law.

     3.  The mortgage broker may maintain in an electronic format the records required to be maintained by this section if:

     (a) The records are maintained and made available to the Commissioner or his or her designee in a software format that allows the Commissioner or his or her designee complete access to all records;

     (b) The mortgage broker ensures that the Commissioner or his or her designee has the ability to download and print, from all office locations of the mortgage broker, any or all of the records maintained in electronic format;

     (c) The mortgage broker provides, within 24 hours after a request for a record and in printed form, any or all of the records maintained in an electronic format upon request of the Commissioner or his or her designee; and

     (d) The records are maintained on a medium that:

          (1) Is not erasable;

          (2) Does not allow changes to a document stored on the medium;

          (3) Is consistent with the minimum standards of quality approved by the National Institute of Standards and Technology of the United States Department of Commerce or the Association for Information and Image Management; and

          (4) Contains written authentication identifying the electronic record as an exact, unaltered copy of the document which the record purports to be.

     (Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004; R058-08, 4-23-2009; R125-16, 1-27-2017)

     NAC 645B.080  Provision and retention of certain documents. (NRS 645B.060, 645B.080)

     1.  Except as otherwise provided in NAC 645B.038, before a private investor makes a loan for which a licensed mortgage broker is acting as a broker, the mortgage broker must provide, unless specifically waived in writing, to the private investor:

     (a) A written application for the loan which is signed by the prospective borrower and which contains the borrower’s address, a history of his or her employment and income, details of monthly payments he or she is obliged to pay and any other information requested by the private investor.

     (b) Evidence of the history of employment of the prospective borrower and income, such as a tax return or an employer’s statement of the borrower’s past yearly income.

     (c) A report on the history of credit of the prospective borrower issued by a credit reporting agency, including an explanation by the borrower of any material derogatory item in the report and evidence that the report has been compared for accuracy to the borrower’s application for the loan.

     (d) An analysis by the mortgage broker of the ability of the prospective borrower to pay his or her monthly debts.

     (e) A preliminary report on the status of the title of the property which is proposed as security for the loan.

     2.  A mortgage broker shall retain a copy of the documents described in subsection 1 and shall retain in his or her files a statement from the private investor, on a form provided by the Division, acknowledging that:

     (a) The private investor received the documents, or that the private investor waived in writing the right to receive the documents;

     (b) The decision to make the loan was made after the private investor had the opportunity to receive and review the documents; and

     (c) The private investor continues to meet the minimum financial requirement set forth in NAC 645B.255.

     3.  If the loan is made, the mortgage broker shall retain in his or her files and provide to the private investor:

     (a) A copy of the promissory note;

     (b) A recorded copy of the deed of trust securing the loan; and

     (c) A copy of the policy of title insurance on the property securing the loan.

Ê The mortgage broker shall retain in his or her files a statement, on a form provided by the Division, acknowledging that the documents were provided to the private investor.

     4.  If the loan is made, the mortgage broker shall retain in his or her files:

     (a) A copy of a policy of fire insurance which is adequate to cover the replacement costs of all improvements on the property securing the loan, including an endorsement naming the private investor as the insured, when applicable; and

     (b) If the borrower is not a natural person, a copy of its statement authorizing the loan.

     5.  The mortgage broker shall store his or her original notes, if retained, in a fireproof container or room.

     6.  The mortgage broker shall provide a copy of the appraisal or independent assessment of the value of the mortgage property required pursuant to NRS 645B.300 to the:

     (a) Private investor, upon request; and

     (b) Borrower, upon request, if the borrower has paid for the appraisal or independent assessment.

     [Comm’r of Savings Associations, Mortgage Reg. § 8, eff. 6-29-82] — (NAC A by Comm’r of Financial Institutions, 5-19-88; R045-00, 9-5-2000; A by Comm’r of Mortgage Lending by R056-08, R057-08 & R058-08, 4-23-2009; R125-16, 1-27-2017)

Net Worth

     NAC 645B.095  Determination by Commissioner. (NRS 645B.060, 645B.115)  For the purpose of determining the net worth of a mortgage broker pursuant to NRS 645B.115, the Commissioner will interpret the term “net worth” to mean the amount by which the assets of a mortgage broker exceed his or her liabilities, as calculated by the Commissioner in accordance with generally accepted accounting principles. The calculation:

     1.  Must exclude any intangible and any amount receivable by the mortgage broker that is related to the intangible; and

     2.  May exclude any shareholder debt that is subordinated.

     (Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R035-10, 7-22-2010)

ESCROW AND TRUST ACCOUNTS

     NAC 645B.150  Money received to acquire loans: Required statements and ledgers. (NRS 645B.060, 645B.080, 645B.085, 645B.175)  A licensed mortgage broker maintaining any accounts described in subsection 1 of NRS 645B.175 shall:

     1.  Provide to the Commissioner a financial statement of the account or accounts in accordance with NAC 645B.165.

     2.  Maintain a subsidiary ledger for each investor which must include:

     (a) The name and address of the investor;

     (b) The amount of the initial investment and the amount of any subsequent investment;

     (c) The date of any investment placed with the licensee by the investor;

     (d) Each specific loan invested in, including:

          (1) The number of the loan;

          (2) The name of the borrower;

          (3) The closing date of the loan; and

          (4) The percentage of the loan owned by the investor, if the loan is owned by more than one person;

     (e) The date of the investment;

     (f) The amount of money invested;

     (g) The maturity date of the loan or loans made;

     (h) Any change in the investment made on behalf of the investor; and

     (i) The status of each loan, including whether the loan is current or delinquent, and if the loan is delinquent, the number of months it is past due.

     3.  At least annually, provide each investor with a statement which details:

     (a) The total amount he or she has invested with the mortgage broker;

     (b) The amount he or she has invested in a loan or loans; and

     (c) The current status of the loan or loans.

Ê The statement, if annual, must be provided to the investor not later than 120 days after the end of the fiscal year of the mortgage broker.

     4.  At the discretion of the Commissioner, for each loan, maintain the account or accounts separate and apart from any other money held in trust by the mortgage broker.

     (Added to NAC by Comm’r of Financial Institutions, eff. 5-27-92; A by R045-00, 9-5-2000; A by Comm’r of Mortgage Lending by R055-08 & R058-08, 4-23-2009)

     NAC 645B.160  Money received to repay loans: Required statements and records. (NRS 645B.060, 645B.080, 645B.085, 645B.175)  A licensed mortgage broker maintaining any accounts described in subsection 4 of NRS 645B.175 shall:

     1.  Provide to the Commissioner a statement of the account or accounts in accordance with NAC 645B.165.

     2.  Keep monthly records reconciling all payments received on loans made by investors to such accounts and any subsequent disbursement to the investors.

     3.  At least annually, provide to each investor:

     (a) A statement indicating all money collected and disbursed; and

     (b) The amortized balance of each loan in which the investor has an interest.

Ê The statement, if annual, must be provided to the investor not later than 120 days after the end of the licensee’s fiscal year.

     4.  At the discretion of the Commissioner, for each loan, maintain the account or accounts separate and apart from any other money held in trust by the mortgage broker.

     (Added to NAC by Comm’r of Financial Institutions, eff. 5-27-92; A by R045-00, 9-5-2000; A by Comm’r of Mortgage Lending by R055-08 & R058-08, 4-23-2009)

     NAC 645B.165  Money received to acquire or repay loans: Required financial statements. (NRS 645B.060, 645B.080, 645B.085, 645B.175)

     1.  A licensed mortgage broker maintaining any accounts described in subsection 1 or 4 of NRS 645B.175 shall, not later than 120 days after the end of the fiscal year for the mortgage broker, provide to the Commissioner an annual financial statement of the account or accounts, which has been:

     (a) Prepared from the books and records of the mortgage broker by an independent public accountant who holds an active permit to engage in the practice of public accounting in this State; and

     (b) Audited in accordance with generally accepted auditing standards.

     2.  A financial statement of the account or accounts required pursuant to this section must include, if applicable:

     (a) A statement of the balance and liabilities of each trust account;

     (b) A statement of all receipts for, disbursements from and changes in cash balances of each trust account;

     (c) A supplementary schedule of the liabilities of each trust account; and

     (d) A reconciliation of cash balance of each trust account to the supplementary schedule of the liabilities of each trust account.

     3.  The Commissioner will make available an approved format and sample content for the statements required pursuant to this section. Mortgage brokers shall submit the statements in substantially the same format as the approved forms.

     4.  In addition to the annual financial statement of the account or accounts required pursuant to subsection 1, not later than 60 days after the last day of each fiscal year for a mortgage broker, and every 6 months thereafter, the mortgage broker shall submit to the Commissioner an unaudited financial statement of the account or accounts. The financial statement required pursuant to this subsection may be self-prepared.

     5.  Except as otherwise provided in this subsection, the Commissioner may grant a reasonable extension, not to exceed 30 days, for the submission of a financial statement of the account or accounts pursuant to this section if a mortgage broker requests such an extension in writing before the date on which the financial statement is due. Upon written request, the Commissioner may, for good cause, grant in writing an additional extension, not to exceed 30 days, of the period for the submission of a financial statement.

     (Added to NAC by Comm’r of Mortgage Lending by R055-08, eff. 4-23-2009)

     NAC 645B.170  Money received to acquire or repay loans: Period for retention of records. (NRS 645B.060, 645B.080, 645B.175)  A licensed mortgage broker shall retain all records of accounts maintained pursuant to subsections 1 and 4 of NRS 645B.175 for at least 2 years after the date of the last transaction with the investor.

     (Added to NAC by Comm’r of Financial Institutions, eff. 5-27-92; A by R045-00, 9-5-2000)

DISCLOSURES AND ADVERTISING

     NAC 645B.210  Disclosure of involvement. (NRS 645B.060, 645B.185, 645B.186)

     1.  If a control person, manager or employee of a licensed mortgage broker, or a relative of a control person, manager or employee of a licensed mortgage broker:

     (a) Has any personal involvement in a lending or borrowing transaction of the mortgage broker which is authorized under chapter 645B of NRS; or

     (b) Is licensed as, conducts business as or holds a controlling interest or position in:

          (1) A construction control;

          (2) An escrow agency or escrow agent; or

          (3) A title agent, a title insurer or an escrow officer of a title agent or title insurer,

Ê the involvement must be disclosed to the borrower and the investor before the date that the loan is consummated. Such a disclosure must be separate from the documents of the transaction and must clearly and concisely state the nature of the involvement. The statement of disclosure must be signed by the borrower and the investor as an acknowledgment of the involvement. The mortgage broker shall not act as the attorney in fact or the agent of an investor with respect to signing the acknowledgment.

     2.  If a mortgage broker is owned by a corporation in which one control person, manager or employee owns an interest of 10 percent or more, and that person has any personal involvement in a licensed transaction of the mortgage broker, the involvement must be disclosed to the borrower and the investor pursuant to subsection 1.

     [Comm’r of Savings Associations, Mortgage Reg. § 13, eff. 6-29-82] — (NAC A by Comm’r of Financial Institutions by R045-00, 9-5-2000; A by Comm’r of Mortgage Lending by R125-16, 1-27-2017) — (Substituted in revision for NAC 645B.130)

     NAC 645B.215  Disclosures to purchaser of note secured by deed of trust; retention of documents. (NRS 645B.060, 645B.080)

     1.  Before a person purchases an existing note secured by a deed of trust or an interest therein for which a licensed mortgage broker is acting as a broker or as an investor selling his or her interest, the mortgage broker must provide to the purchaser, unless specifically waived in writing by that person:

     (a) A copy of the promissory note;

     (b) A record of the history of payments on the note or a document signed by the seller and borrower stating the existing balance of the note;

     (c) The policy of title insurance for the original beneficiaries of the note; and

     (d) The original appraisal or any other independent assessment of the value of the mortgaged property securing the note, if available.

     2.  A mortgage broker shall retain a copy of the materials provided to the purchaser pursuant to subsection 1.

     3.  If the purchase is made, the mortgage broker shall retain in his or her files the original or a copy and provide to the purchaser, respectively, the copy or original of the following documents:

     (a) The promissory note and the assignment of the note.

     (b) The recorded deed of trust and recorded assignment of the beneficial interest.

     (c) The endorsement to the policy of title insurance or a new policy of title insurance for the assignment.

     (d) A policy of fire insurance indicating coverage in an amount sufficient to cover the replacement costs of all improvements on the property, including, if applicable, an endorsement naming the purchaser as a payee in case of loss.

     (e) A statement signed by the purchaser acknowledging that:

          (1) The decision to purchase the note secured by a deed of trust was made after the purchaser was provided with and reviewed the material required in subsection 1; and

          (2) The purchaser meets the minimum financial requirement set forth in NAC 645B.255.

     (Added to NAC by Admstr. of Financial Institutions, eff. 12-15-86; A by Comm’r of Financial Institutions by R045-00, 9-5-2000; A by Comm’r of Mortgage Lending by R057-08, 4-23-2009) — (Substituted in revision for NAC 645B.140)

     NAC 645B.220  Disclosure form. (NRS 645B.060, 645B.185)  The disclosure form given to a private investor pursuant to NRS 645B.185 must be the form prescribed by the Commissioner.

     (Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004; R058-08, 4-23-2009; R125-16, 1-27-2017)

     NAC 645B.230  Provision to Division of financial statement for private investors. (NRS 645B.060, 645B.185)

     1.  A mortgage broker may submit to the Division a financial statement to be provided to a private investor pursuant to subsection 3 of NRS 645B.185 that:

     (a) Is dated not earlier than the last day of the most recently completed fiscal year; and

     (b) Has been prepared from the books and records of the mortgage broker by an independent public accountant who holds a permit to engage in the practice of public accounting in this State that has not been revoked or suspended.

     2.  A financial statement submitted to the Division by a mortgage broker pursuant to this section:

     (a) Must contain a notation indicating that it is a financial statement to be provided to private investors pursuant to subsection 3 of NRS 645B.185.

     (b) Need not be audited, but the provisions of this section do not affect any obligation of the mortgage broker to submit an audited financial statement to the Division pursuant to subsection 3 of NRS 645B.085.

     (Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R125-16, 1-27-2017)

     NAC 645B.235  Disclosures to borrowers by certain persons acting in dual capacity. (NRS 645B.060)

     1.  A mortgage broker or mortgage agent who is also licensed as a real estate broker or real estate salesperson and who acts in both capacities in a single transaction must make to the borrower the disclosures set forth on the form prescribed by the Division pursuant to subsection 2, including, but not limited to:

     (a) Whether the mortgage broker or mortgage agent will be receiving compensation for acting as a mortgage broker or mortgage agent and as a real estate broker or real estate salesperson in the same transaction;

     (b) That the borrower is under no obligation to allow the real estate broker or real estate salesperson to submit the loan package of the borrower to a mortgage broker or mortgage agent; and

     (c) That the borrower may contact other mortgage brokers or mortgage agents to determine if the borrower is receiving the best services related to the loan and the best prices for those services.

     2.  The mortgage broker or mortgage agent shall provide the disclosures required pursuant to subsection 1 to the borrower at the time of application for a loan and in the following format:

 

(At least 14-point font)

BORROWER(S)

ACKNOWLEDGMENT AND AGREEMENT CONCERNING

DUAL CAPACITY AS REAL ESTATE SALES AGENT AND MORTGAGE LOAN AGENT

 

(At least 12-point bold font)

Borrower(s) are under no obligation whatsoever to allow their real estate sales agent to initiate or submit the borrower(s) loan package to any mortgage lender, broker, banker or investor. Mortgage brokers and other loan originators cannot offer loans from all funding sources and cannot guarantee the lowest price or best terms available in the market.

 

There may be other mortgage loan providers available with similar services and lower rates and/or fees. You are free and encouraged to contact various lenders to determine that you are receiving the best service and rates and lowest fees for those services. A comparative analysis of providers’ services, rates and fees is recommended prior to making a decision on which lender to use.

 

(At least 10-point font)

Borrower(s) are hereby informed and expressly acknowledge the following:

 

·    Real estate sales agent _________________, hereinafter referred to as “agent,” is also associated with _____________________ (mortgage broker/banker) and is acting in the dual capacity as both mortgage loan agent and real estate sales agent and shall receive compensation from the real estate sales transaction and separate compensation for arranging the mortgage loan.

 

·    Real estate company _____________________________ (check one of the following):

 

_________Does have a business relationship with the licensed mortgage broker/banker or exempt company to which your loan is referred. Because of this relationship, this referral may provide the real estate company named above a financial or other benefit.

Describe the nature of the relationship, including percentage of ownership interest, if applicable.____

___________________________________________________________________________________________

___________________________________________________________________________________________

______________________________________________________________________________

·    _________Does not have a business relationship with the licensed mortgage broker/banker or exempt company to which your loan is referred.

 

The mortgage broker/banker must provide you with a written disclosure under applicable state or federal law of all estimated costs of the loan, including the yield spread premium (YSP.) The YSP is income paid to a mortgage broker upon delivery of a mortgage loan to a lender at a premium interest rate.

 

By signing I/we confirm my/our understanding of the information provided herein.

 

BORROWER                                                                           BORROWER

___________________________________                 _________________________________________

 

By signing this form, the mortgage loan agent agrees that any fees paid to the mortgage broker/banker/agent as referred to above will not increase the cost of borrower(s) loan beyond the normal and customary charges typically collected by mortgage lenders, brokers or investors.

 

MORTGAGE BROKER/QUALIFIED EMPLOYEE/AGENT

___________________________________

 

If you have any questions regarding your mortgage loan agent or loan, please visit the Division of Mortgage Lending website at http://www.mld.nv.gov or call (702) 486-0782 in Las Vegas or (775) 684-7060 in Northern Nevada.

 

     3.  As used in this section:

     (a) “Real estate broker” has the meaning ascribed to it in NRS 645.030; and

     (b) “Real estate salesperson” has the meaning ascribed to it in NRS 645.040.

     (Added to NAC by Comm’r of Mortgage Lending by R087-04, eff. 8-31-2004; A by R125-16, 1-27-2017)

     NAC 645B.240  Representation of activity as licensed; advertisements; disclosure to private investors; Internet links. (NRS 645B.060, 645B.189, 645F.292, 645F.293)

     1.  A licensed mortgage broker or mortgage agent shall not represent an activity which is not licensed pursuant to chapter 645B of NRS as being licensed pursuant to that chapter.

     2.  Except as otherwise provided in subsection 3, an advertisement for an activity which is licensed pursuant to chapter 645B of NRS must be separate and distinct from an advertisement for an activity which is not licensed pursuant to that chapter.

     3.  A mortgage broker or mortgage agent may advertise jointly with a company licensed pursuant to chapter 624 or 645 of NRS if each business is disclosed separately in the advertisement and each business incurs a pro rata share of the cost associated with the advertisement.

     4.  A licensed mortgage broker or mortgage agent must include in his or her advertisements, including any advertising material available on the Internet:

     (a) The complete name of the mortgage broker or mortgage agent that appears on the license of the mortgage broker or mortgage agent issued pursuant to this chapter and chapter 645B of NRS. Any advertisement for a mortgage agent must also include the name of the mortgage broker or mortgage banker, with whom the mortgage agent is associated.

     (b) The address, telephone number and either the license number or unique identifier that the mortgage broker and, if applicable, mortgage agent has on file with the Division. Additional telephone or cellular phone numbers of the mortgage broker or mortgage agent may also be included.

     (c) A description of any licensed activity mentioned in the advertisement, written in nontechnical terms.

     5.  A mortgage broker or mortgage agent shall not use advertising material that simulates the appearance of a check or a communication from a governmental entity, or an envelope containing a check or a communication from a governmental entity, unless:

     (a) The words “THIS IS NOT A CHECK,” “NOT NEGOTIABLE” or “THIS IS NOT A GOVERNMENTAL ENTITY,” as appropriate, appear prominently on the envelope and any material that simulates the appearance of a check or a communication from a governmental entity; and

     (b) If the material simulates the appearance of a check, the material does not contain an American Bankers Association number, microencoding or any other marks intended to create the appearance that the material is a negotiable check.

     6.  A mortgage broker or mortgage agent shall not refer to an existing lender or financial institution, other than the mortgage broker or mortgage agent himself or herself, on any advertising material without the written consent of the lender or financial institution.

     7.  Provided the representation of interest rates in advertisements complies with Regulation Z, 12 C.F.R. Part 226, and the content will continue to comply with this chapter and chapter 645B of NRS regarding advertising, a mortgage broker or mortgage agent may make nonsubstantive changes to his or her advertisements without additional approval from the Commissioner. For the purposes of this subsection, “nonsubstantive changes” means:

     (a) Interest rates that are quoted in the advertisement and any corresponding annual percentage rates;

     (b) Promoting another mortgage agent in the same format of advertisement;

     (c) Promoting other branch offices in the same format of advertisement;

     (d) Placing links on websites that direct the user to noncommercial or consumer education websites;

     (e) Telephone or cellular phone numbers other than the phone number that the mortgage broker or mortgage agent has on file with the Division; and

     (f) Changes to words used in the advertisement that do not alter the content of the advertisement.

     8.  Approvals for advertising must be maintained at the location of the mortgage broker or mortgage agent and must be available for inspection for at least 1 year after the last day that the advertisement is used.

     9.  For the purposes of NRS 645B.189, disclosures in advertisements and distributions to private investors must include the following language:

 

Prior to investing in a loan, private investors must be provided applicable disclosure documents.

 

     10.  The mortgage broker or mortgage agent is not required to obtain approval from the Division for white-page listings, employment recruiting announcements, office signs, banners, magnetic car signs and letterhead which contain only the name, address, unique identifier and telephone number of the mortgage broker or mortgage agent, whether together or separate, and which are used for the purpose of identification only.

     11.  An Internet link on a website of the mortgage broker or mortgage agent that links the user to the website of another commercial enterprise must provide notification to the user that the user is leaving the website of the mortgage broker or mortgage agent.

     12.  For the purposes of this section, “advertising” includes commercial messages that promote the availability of mortgage products or investments offered by the mortgage broker or mortgage agent. Commercial messages include, but are not limited to:

     (a) Print media;

     (b) Sales literature;

     (c) Sales brochures or flyers;

     (d) Billboards;

     (e) Yellow-page listings if more than a line listing;

     (f) Radio and television advertisements;

     (g) Mass mailings distributed by the United States Postal Service or another such delivery service or by electronic mail;

     (h) Telephone or seminar scripts;

     (i) Websites or other Internet sites that promote or accept loan applications; and

     (j) Business cards.

     [Comm’r of Savings Associations, Mortgage Reg. § 11, eff. 6-29-82] — (NAC A by Comm’r of Financial Institutions, 5-19-88; R045-00, 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004; R058-08, 4-23-2009; R035-10, 7-22-2010; R125-16, 1-27-2017)

CONDITIONS AND LIMITATIONS ON CERTAIN MORTGAGE TRANSACTIONS

     NAC 645B.250  Prohibition against acting as trustee or substitute trustee under certain circumstances; exception. (NRS 645B.060)

     1.  Except as otherwise provided in subsection 3, a mortgage broker and any partnership, corporation or limited-liability company in which the mortgage broker or any officer, director, employee or relative of the mortgage broker has a controlling interest shall not act as a trustee or substitute trustee for any deed of trust for which the mortgage broker acted at any time as an investor, mortgage broker or holder of a beneficial interest if the loan for which the deed of trust was executed was funded in whole or in part by a person other than the mortgage broker or has been assigned in whole or in part to one or more natural persons.

     2.  Except as otherwise provided in subsection 3, an officer, director or employee of a mortgage broker, a relative of any officer, director or employee of a mortgage broker, or an officer, director or employee of any corporation, partnership or limited-liability company that has a controlling interest in a mortgage broker shall not act as a trustee or substitute trustee for any deed of trust for which the mortgage broker acted at any time as an investor, mortgage broker or holder of a beneficial interest if the loan for which the deed of trust was executed was funded in whole or in part by a person other than the mortgage broker or has been assigned in whole or in part to one or more natural persons.

     3.  A mortgage broker may act as substitute trustee in a deed of trust for the purpose of reconveying title to the trustor upon payment in full of the note if the mortgage broker receives a signed and notarized statement from each person holding a beneficial interest in the note, or the agent of that person, authorizing the mortgage broker to so act and directing the disposition of the share of the money received for that person to pay the loan in full. The statement must be executed within 45 days before the execution of the deed of reconveyance. The mortgage broker and his or her officers, directors and employees shall not act as the agent for that person for the purpose of executing the statement required by this section.

     (Added to NAC by Comm’r of Financial Institutions, eff. 6-20-97; A by R045-00, 9-5-2000) — (Substituted in revision for NAC 645B.145)

     NAC 645B.255  Minimum financial requirement for private investors. (NRS 645B.060)

     1.  Except as otherwise provided in subsection 5, before a private investor enters into a transaction with a mortgage broker or mortgage agent to acquire ownership of or a beneficial interest in a loan secured by a lien on real property by investing money, the private investor must provide a statement on a form prescribed by the Division which verifies that the private investor meets one or more of the following financial requirements:

     (a) The private investor’s household net worth is more than $250,000, excluding any equity in any real property used as the investor’s primary residence at the time of the investment; or

     (b) The private investor’s household net annual income was more than $70,000 for each of the previous 2 tax years, and there is a reasonable expectation of attaining or exceeding the same income for the current year.

     2.  Except as otherwise provided in this subsection, a private investor must also verify on the form prescribed by the Division that the private investor’s total investments in loans secured by a lien on real property transacted by a mortgage broker or mortgage agent are not valued at more than 50 percent of the private investor’s household net worth or household net annual income, whichever is greater. The Division may waive this requirement in writing.

     3.  In the absence of knowledge to the contrary, a mortgage broker or mortgage agent is not responsible for determining the validity of a private investor’s stated financial information and may rely on such information submitted by the private investor.

     4.  A private investor shall verify on a form prescribed by the Division that the private investor continues to meet the minimum financial requirement set forth in subsection 1 for each transaction subsequent to the first transaction.

     5.  The provisions of this section do not apply to transactions of a mortgage broker or mortgage agent investing on his or her own behalf.

     (Added to NAC by Comm’r of Mortgage Lending by R057-08, eff. 4-23-2009; A by R125-16, 1-27-2017)

     NAC 645B.260  Decisions regarding investments. (NRS 645B.060)  All decisions regarding the funding of investments in mortgages must be made by the investor.

     [Comm’r of Savings Associations, Mortgage Reg. § 10, eff. 6-29-82] — (NAC A by Comm’r of Financial Institutions by R045-00, 9-5-2000) — (Substituted in revision for NAC 645B.100)

     NAC 645B.280  Power of attorney: Submission to and action by Commissioner; maintenance of written communications; extension of term; inclusion of date of approval. (NRS 645B.060, 645B.330)

     1.  Before a mortgage broker or mortgage agent engages in any act or transaction on behalf of a private investor pursuant to a power of attorney, the power of attorney must first be submitted to the Commissioner for approval. The Commissioner will, within 15 business days after receiving a request for approval of a power of attorney:

     (a) Approve the power of attorney;

     (b) Approve the power of attorney on the condition that the mortgage broker amend the power of attorney as directed by the Commissioner;

     (c) Reject the power of attorney; or

     (d) Provide notice in writing to the person who requested the power of attorney that an additional period of time, not to exceed 15 business days, is needed by the Commissioner to act on the request for approval of the power of attorney.

     2.  The mortgage broker shall maintain in his or her file all written communications relating to the request for approval of the power of attorney.

     3.  Any writing executed or issued by a person extending the term of a power of attorney must be dated, and the mortgage broker shall maintain a copy of the extension in the file of the mortgage broker.

     4.  A power of attorney approved by the Commissioner pursuant to this section must state the date that the Commissioner approved the power of attorney. If the mortgage broker materially changes the power of attorney, the mortgage broker must resubmit the power of attorney to the Commissioner for approval before the mortgage broker uses the power of attorney.

     (Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004; R125-16, 1-27-2017)

     NAC 645B.290  Power of attorney: Form. (NRS 645B.060, 645B.330)  The power of attorney required pursuant to NRS 645B.330 must be in substantially the following form:

 

Special Power of Attorney

 

     The undersigned, ________________________, does hereby appoint (name of mortgage broker) my true and lawful attorney, to perform services related to the following loan in which I own a beneficial interest: _______________________. The services to be performed are described below:

 

(Describe services here)

 

     This power of attorney shall not be effective to authorize any transaction that subordinates the priority of the recorded deed of trust that secures this loan unless accompanied by a writing issued by the undersigned that consents to such subordination.

 

     This power of attorney shall not be effective to authorize the use or release of money in which the undersigned owns a beneficial interest for any purpose except for the provision of the services described above relating to the loan described above unless accompanied by written authorization by the undersigned for the use or release of money for the other purpose.

 

     This power of attorney is effective only for the term of the specific loan described above unless the mortgage broker obtains written approval from the undersigned to extend the term of the power of attorney to provide services for not more than one other loan. The written approval must identify the loan for which the power of attorney was executed and the loan for which the power of attorney is being given.

 

     I give and grant to my said attorney full power to execute in my name contracts, escrow instructions, conveyances, mortgages, deeds of trust, and all other documents necessary to carry out the services described herein as fully to all intents and purposes as the undersigned might or could do if personally present, hereby ratifying and confirming all that my said attorney shall lawfully do, or cause to be done, by virtue of these presents.

 

     Witness my hand this _______ day of _____________________, ________.

 

 

 

                                                                                    ____________________________________

 

     State of ______________

 

     County of ____________

 

          This instrument was acknowledged before me on (date)          , by    (name(s) of person(s)             

 

                                                                                    ____________________________________

                                                                                                (Signature of notarial officer)

 

          (Seal if any)

 

 

 

 

                                                                                    ____________________________________

                                                                                                (Title and rank (optional))

                                                                                    (My commission expires (optional) )

 

Approved by the Commissioner of Mortgage Lending on _________________.

     (Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004)

LICENSING AND REGULATION OF MORTGAGE AGENTS

     NAC 645B.300  Application for licensing; association with or employment by mortgage broker or mortgage banker; investigation of background; confidentiality of certain documents; termination of association or employment. (NRS 645B.060, 645B.410, 645B.450, 645F.292, 645F.293)

     1.  In addition to the requirements set forth in NRS 645B.410, an applicant for a license as a mortgage agent must include with the application for a license:

     (a) Evidence that the applicant is 18 years of age or older;

     (b) Evidence that the applicant has satisfied the educational and examination requirements set forth in applicable federal or state law or regulation, including, without limitation, the S.A.F.E. Mortgage Licensing Act and any regulation adopted pursuant thereto; and

     (c) A record of personal history and experience in a form prescribed by the Division.

     2.  A mortgage broker or mortgage banker, and any mortgage agent, must sign the application for licensing required pursuant to NRS 645B.410.

     3.  As regards the conduct of business within this State, a mortgage agent:

     (a) May associate with or be employed by a mortgage broker or mortgage banker at only one licensed office location of the mortgage broker or mortgage banker; and

     (b) While the mortgage agent associates with or is employed by a mortgage broker or mortgage banker, may not associate with or be employed by another mortgage broker or mortgage banker, an escrow agency licensed pursuant to chapter 645A of NRS, or any other entity that is exempt from the provisions of chapter 645B of NRS or whose office is located outside this State.

     4.  Upon request of a mortgage broker or mortgage banker, the Commissioner may waive the requirement of an investigation of the credit history, criminal history and background of a mortgage agent if such an investigation has been conducted within the 6 months immediately preceding the date the application is submitted.

     5.  An applicant for a license as a mortgage agent shall not be deemed to be licensed as a mortgage agent until the Commissioner has verified the information submitted by the applicant pursuant to applicable federal or state law or regulation and has notified the applicant that the information has been verified and that the records of the Division reflect activation of the license.

     6.  The report of an investigation of the credit history, criminal history and background of a mortgage agent is confidential, and the Commissioner will release the report only pursuant to a valid subpoena or court order.

     7.  The written statement of the circumstances surrounding the termination of a mortgage agent required by paragraph (b) of subsection 3 of NRS 645B.450 will be considered a public record.

     8.  If a mortgage broker or mortgage banker terminates the association or employment of a mortgage agent for any reason, the mortgage broker or mortgage banker shall provide written notification of the termination to the mortgage agent not later than the third business day following the date of termination.

     (Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004; R058-08, 4-23-2009; R035-10, 7-22-2010)

     NAC 645B.305  Qualifications of applicant: Requirements for licensure pursuant to NRS 645B.410. (NRS 645B.060)

     1.  Pursuant to subsection 3 of NRS 645B.410, the Commissioner is not required to and will not issue a license as a mortgage agent unless the requirements of that subsection have been fulfilled.

     2.  For the purposes of subparagraph (1) of paragraph (b) of subsection 3 of NRS 645B.410, a person shall not be considered to have been convicted or entered a plea of guilty or nolo contendere if the conviction or plea has been pardoned or vacated.

     3.  For the purposes of subparagraph (2) of paragraph (b) of subsection 3 of NRS 645B.410, a license shall not be considered to be revoked or suspended if the revocation or suspension was subsequently vacated.

     4.  For the purposes of subparagraph (5) of paragraph (b) of subsection 3 of NRS 645B.410, a person has not demonstrated financial responsibility if the person’s personal credit history indicates any lien, judgment or disciplinary action which results from fraud, misrepresentation, dishonest business practices or the mishandling of trust funds.

     (Added to NAC by Comm’r of Mortgage Lending by R035-10, eff. 7-22-2010)

     NAC 645B.307  Request for change of association with mortgage broker; fee. (NRS 645B.060, 645B.430)  A mortgage agent who wishes to change the mortgage broker with whom the mortgage agent is associated must submit a request to the Commissioner and pay a fee of $50.

     (Added to NAC by Comm’r of Mortgage Lending by R125-16, eff. 1-27-2017)

     NAC 645B.310  Determination by Commissioner of adequate supervision of mortgage agent by mortgage broker. (NRS 645B.060, 645B.460)  In determining whether a mortgage broker has maintained adequate supervision of a mortgage agent, the Commissioner will consider whether:

     1.  The mortgage broker has made a reasonable effort to investigate the background and experience of a prospective mortgage agent and hire only a mortgage agent whose background and experience indicate that the person is trustworthy and competent to conduct the business of a mortgage agent;

     2.  The mortgage broker has adopted and followed any policies and procedures, written or oral, relating to the supervision and training of mortgage agents;

     3.  The mortgage agent has followed the policies and procedures of the mortgage broker, written or oral, governing his or her activities;

     4.  The mortgage broker has established and followed a system of review for compliance with his or her written or oral policies and procedures;

     5.  The policies and procedures of the mortgage broker require regular review of the work of a mortgage agent;

     6.  The mortgage broker reviewed the work of the mortgage agent in the case under examination by the Commissioner;

     7.  The policies and procedures of the mortgage broker include training in the requirements of this chapter and chapter 645B of NRS;

     8.  The mortgage broker makes copies of this chapter and chapter 645B of NRS available to mortgage agents;

     9.  The policies and procedures of the mortgage broker include a provision for continuing education for mortgage agents;

     10.  The mortgage broker spends a sufficient amount of time in the office where the mortgage agent is working;

     11.  The mortgage broker has received or acted on previous reports of alleged misconduct by the mortgage agent; and

     12.  Review of the previous work of the mortgage agent would have disclosed a problem with the conduct or issue being examined by the Commissioner.

     (Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000)

EDUCATIONAL REQUIREMENTS FOR LICENSURE

     NAC 645B.360  Designation of Registry to certify approved courses. (NRS 645B.0137, 645B.0138, 645B.060, 645B.430, 645F.292, 645F.293)

     1.  The Commissioner hereby designates:

     (a) The Registry to certify approved courses for the purposes of an initial license or renewal of a license as a mortgage broker or mortgage agent who is required to register or voluntarily registers with the Registry; and

     (b) Any federal or state governmental agency, self-regulatory organization or professional organization that reviews and approves a certified course of continuing education for professional prelicensing or continuing education to certify approved courses for the purposes of an initial license or renewal of a license as a mortgage broker or mortgage agent who is not required to register or renew with the Registry and who has not voluntarily registered or renewed with the Registry.

     2.  As used in this section, “certified course of continuing education” has the meaning ascribed to it in NRS 645B.051.

     (Added to NAC by Comm’r of Mortgage Lending by R087-04, eff. 8-31-2004; A by R093-09, 10-27-2009; R035-10, 7-22-2010; R125-16, 1-27-2017)

     NAC 645B.363  Course material for initial licensure and continuing education: Approved subjects. (NRS 645B.0137, 645B.0138, 645B.060, 645F.292, 645F.293)  The following subjects are approved as course material for initial licensing and continuing education:

     1.  Federal laws and regulations relating to mortgage lending;

     2.  The provisions of Nevada laws and regulations, including, without limitation:

     (a) Chapter 645B of NRS governing mortgage brokers and mortgage agents;

     (b) Chapter 598D of NRS governing unfair lending practices;

     (c) Chapter 645A of NRS governing escrow agencies and agents;

     (d) Chapter 645F of NRS governing mortgage lending and related professions;

     (e) Chapter 107 of NRS governing deeds of trust; and

     (f) Chapter 645E of NRS governing mortgage bankers;

     3.  Mortgage industry practices and information;

     4.  Ethics, including, without limitation, instruction on fraud, consumer protection and fair lending issues;

     5.  Lending standards for the nontraditional mortgage product marketplace; and

     6.  Any other subject approved by the Registry.

     (Added to NAC by Comm’r of Mortgage Lending by R093-09, eff. 10-27-2009; A by R035-10, 7-22-2010)

     NAC 645B.367  Requirements for initial licensure. (NRS 645B.0137, 645B.0138, 645B.060, 645F.292, 645F.293)

     1.  A natural person who is an applicant for an initial license as a mortgage broker or mortgage agent must complete at least 30 hours of instruction in approved courses from the subjects set forth in NAC 645B.363.

     2.  The 30 hours of instruction required pursuant to subsection 1 must include:

     (a) Three hours of ethics, which must include instruction on fraud, consumer protection and fair lending issues;

     (b) Three hours of federal law and regulations relating to mortgage lending;

     (c) Two hours of training relating to lending standards for the nontraditional mortgage product marketplace;

     (d) Four hours of Nevada law and regulations relating to mortgage lending; and

     (e) Eighteen hours of electives.

     3.  Nothing in this section precludes any approved course that is provided by the employer of the applicant, an entity which is affiliated with the applicant by an agency contract or any subsidiary or affiliate of such employer or entity.

     4.  The Commissioner may accept any hours of training completed in fulfillment of the requirements for a license for another state as hours of training for an initial license in this State if the Commissioner determines that those hours of training meet the requirements of this State.

     (Added to NAC by Comm’r of Mortgage Lending by R093-09, eff. 10-27-2009; A by R035-10, 7-22-2010)

REVISER’S NOTE.

      The regulation of the Commissioner of Mortgage Lending filed with the Secretary of State on July 22, 2010 (LCB File No. R035-10), which amended this section, contains the following provision not included in NAC:

      “Notwithstanding any other provision of this regulation, any natural person who completed the requirements of section 6 of LCB File No. R093-09 [NAC 645B.367], which was adopted by the Commissioner of Mortgage Lending and filed with the Secretary of State on October 27, 2009, before July 22, 2010, through courses approved by the Division of Mortgage Lending of the Department of Business and Industry or the Nationwide Mortgage Licensing System and Registry does not have to complete those requirements again. The Division shall certify to the Registry that the natural person previously met those requirements.”

 

     NAC 645B.370  Qualified written test required for initial licensure. (NRS 645B.0137, 645B.0138, 645B.060, 645F.292, 645F.293)

     1.  To satisfy the requirement prescribed in NRS 645B.0137, a natural person must pass, in accordance with the standards established under this section, a qualified written test pursuant to and in the manner provided for in section 1505(b)(5) of the S.A.F.E. Mortgage Licensing Act, including, without limitation, with regard to the taking of a test four times.

     2.  Nothing in this section prohibits a person approved by the Registry from providing a test at the location of the employer of the applicant, the location of any subsidiary or affiliate of the employer of the applicant, or the location of any entity with which the applicant holds an exclusive arrangement to conduct the business of a mortgage agent.

     3.  Pursuant to section 1505(d)(3)(D) of the S.A.F.E. Mortgage Licensing Act, a licensed mortgage agent who fails to maintain a valid license for a period of 5 consecutive years or more must retake the test specified in subsection 1, not taking into account any time during which such person may be a registered loan originator, as defined in section 1503(7) of the S.A.F.E. Mortgage Licensing Act.

     (Added to NAC by Comm’r of Mortgage Lending by R093-09, eff. 10-27-2009; A by R035-10, 7-22-2010; R125-16, 1-27-2017)

REVISER’S NOTE.

      The regulation of the Commissioner of Mortgage Lending filed with the Secretary of State on July 22, 2010 (LCB File No. R035-10), which amended this section, contains the following provision not included in NAC:

      “Notwithstanding any other provision of this regulation, any natural person who completed, before July 22, 2010, an examination approved by the Division of Mortgage Lending of the Department of Business and Industry regarding Nevada laws and regulations does not have to retake the equivalent Nevada laws and regulations portion of the examination provided for in section 7 of LCB File No. R093-09 [NAC 645B.370], which was adopted by the Commissioner of Mortgage Lending and filed with the Secretary of State on October 27, 2009. The Division shall certify to the Nationwide Mortgage Licensing System and Registry that the natural person previously passed the examination on Nevada laws and regulations, but the natural person must, after July 22, 2010, pass the other subject matter portions of the examination provided for in section 7 of LCB File No. R093-09 [NAC 645B.370].”

 

     NAC 645B.373  Requirements for continuing education. (NRS 645B.0137, 645B.0138, 645B.060, 645F.292, 645F.293)

     1.  To satisfy the requirements for continuing education provided for in subsection 1 of NRS 645B.051 or subsection 1 of NRS 645B.430, a mortgage agent or mortgage broker must complete at least 10 hours of approved courses of continuing education during the 12 months immediately preceding the date on which the license expires. The 10 hours of approved courses must be comprised of:

     (a) Three hours of federal laws and regulations relating to mortgage lending;

     (b) Two hours of ethics, which must include, without limitation, instruction on fraud, consumer protection and fair lending issues;

     (c) Two hours of training relating to lending standards for nontraditional mortgage products; and

     (d) Three hours of Nevada laws and regulations, as set forth in NAC 645B.363.

     2.  The Commissioner may accept any hours of training completed in fulfillment of the requirements for a license for another state as hours of training for continuing education in this State if the Commissioner determines that those hours of training meet the requirements of this State.

     3.  Nothing in this section precludes any approved course that is provided by the employer of the mortgage agent or mortgage broker, an entity which is affiliated with the mortgage agent or mortgage broker by an agency contract, or any subsidiary or affiliate of such employer or entity.

     4.  A licensed mortgage agent or mortgage broker may not take the same approved course in the same or successive years to meet the annual requirements for continuing education.

     5.  A licensed mortgage agent or mortgage broker who is an approved instructor of an approved course may receive credit for the licensed mortgage agent’s or mortgage broker’s own annual continuing education requirement at the rate of 2 hours of credit for every 1 hour taught.

     (Added to NAC by Comm’r of Mortgage Lending by R093-09, eff. 10-27-2009; A by R035-10, 7-22-2010; R125-16, 1-27-2017)

RESIDENTIAL MORTGAGE LOANS

     NAC 645B.400  “Residential mortgage loan originator” interpreted. (NRS 645B.060, 645F.292, 645F.293)

     1.  As used in NRS 645B.01325, the term “residential mortgage loan originator” is interpreted not to include a person or entity which only performs real estate brokerage activity and which is licensed or registered in accordance with Nevada law, unless the person or entity is compensated by a lender, mortgage broker, mortgage banker or other residential mortgage loan originator or by any agent of such lender, mortgage broker, mortgage banker or other residential mortgage loan originator.

     2.  As used in this section, “real estate brokerage activity” has the meaning ascribed to it in section 1503(3)(D) of the S.A.F.E. Mortgage Licensing Act.

     (Added to NAC by Comm’r of Mortgage Lending by R035-10, eff. 7-22-2010)

REVISER’S NOTE.

      The language in this section is taken from Section 1503 of the S.A.F.E. Mortgage Licensing Act, 12 U.S.C. § 5102(3)(A)(iii).

 

     NAC 645B.405  Unique identifier. (NRS 645B.060, 645F.292, 645F.293)  The unique identifier of any person originating a residential mortgage loan must be clearly shown on all residential mortgage loan application forms, solicitations or advertisements, including, without limitation, a website or a business card, and any other documents as established by law, regulation or order of the Commissioner.

     (Added to NAC by Comm’r of Mortgage Lending by R035-10, eff. 7-22-2010)

ENFORCEMENT

     NAC 645B.505  Referral of certain suspected violations for investigation and action; grounds for disciplinary action. (NRS 645B.060, 645B.670, 645F.292, 645F.293)

     1.  The Commissioner may refer to, cooperate with and share information with the appropriate federal or state agency for investigation and appropriate action each suspected violation of:

     (a) The Truth in Lending Act, 15 U.S.C. §§ 1601 to 1667f, inclusive, including, without limitation, the Home Ownership and Equity Protection Act of 1994, 15 U.S.C. § 1639, or Regulation Z, 12 C.F.R. Part 226.

     (b) The Equal Credit Opportunity Act, 15 U.S.C. §§ 1691 to 1691f, inclusive, or Regulation B, 12 C.F.R. Part 202.

     (c) The Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2601 to 2617, inclusive, or Regulation X, 24 C.F.R. Part 3500.

     (d) The S.A.F.E. Mortgage Licensing Act.

     (e) Any other applicable federal or state law or regulation related to mortgage transactions.

     2.  For the purposes of NRS 645B.670, a mortgage broker or mortgage agent commits a violation if the mortgage broker or a mortgage agent associated with the mortgage broker:

     (a) Engages in a deceptive trade practice as defined in chapter 598 of NRS;

     (b) Fails to refund any fees collected in excess of the actual cost the mortgage broker incurs or pays for any appraisal, credit report or any other product or service provided by a third party in connection with the making of a loan;

     (c) Improperly influences or attempts to improperly influence the proper development, reporting, result or review of a real estate appraisal with respect to the making of a mortgage loan; or

     (d) Violates a provision of:

          (1) The Truth in Lending Act, 15 U.S.C. §§ 1601 to 1667f, inclusive, including, without limitation, the Home Ownership and Equity Protection Act of 1994, 15 U.S.C. § 1639, or Regulation Z, 12 C.F.R. Part 226.

          (2) The Equal Credit Opportunity Act, 15 U.S.C. §§ 1691 to 1691f, inclusive, or Regulation B, 12 C.F.R. Part 202.

          (3) The Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2601 to 2617, inclusive, or Regulation X, 24 C.F.R. Part 3500.

          (4) The S.A.F.E. Mortgage Licensing Act, including, without limitation, section 1505(e) of the Act regarding the submission of reports of condition to the Registry.

          (5) Any other applicable federal or state law or regulation related to mortgage transactions.

     3.  For the purposes of NRS 645B.670, a mortgage agent commits a violation if the mortgage agent:

     (a) Engages in a deceptive trade practice as defined in chapter 598 of NRS;

     (b) Fails to refund any fees collected in excess of the actual cost the mortgage agent incurs or pays for any appraisal, credit report or any other product or service provided by a third party in connection with the making of a loan; or

     (c) Violates a provision of:

          (1) The Truth in Lending Act, 15 U.S.C. §§ 1601 to 1667f, inclusive, including, without limitation, the Home Ownership and Equity Protection Act of 1994, 15 U.S.C. § 1639, or Regulation Z, 12 C.F.R. Part 226.

          (2) The Equal Credit Opportunity Act, 15 U.S.C. §§ 1691 to 1691f, inclusive, or Regulation B, 12 C.F.R. Part 202.

          (3) The Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2601 to 2617, inclusive, or Regulation X, 24 C.F.R. Part 3500.

          (4) The S.A.F.E. Mortgage Licensing Act, including, without limitation, section 1505(e) of the Act regarding the submission of reports of condition to the Registry.

          (5) Any other applicable federal or state law or regulation related to mortgage transaction.

     (d) Does any of the following:

          (1) Is convicted of, or enters a plea of guilty or nolo contendere to, a felony in a domestic, foreign or military court;

          (2) Has a license or registration as a mortgage agent, mortgage banker, mortgage broker or residential mortgage loan originator revoked in this State or any other jurisdiction, or has a financial services license suspended or revoked;

          (3) Makes a false statement of material fact to the Division;

          (4) Violates any provision of this chapter or chapter 645E of NRS, a regulation adopted pursuant thereto or an order of the Commissioner; or

          (5) Demonstrates a lack of financial responsibility, character and general fitness so as to lose the confidence of the community and warrant a determination that the mortgage agent will not operate honestly, fairly and efficiently for the purposes of chapter 645B of NRS.

     4.  Nothing in this section shall be construed to prohibit a mortgage broker from requesting an appraiser of real estate to do one or more of the following:

     (a) Consider any appropriate information relating to the property;

     (b) Provide additional details, substantiations or explanations in support of the appraiser’s valuation of the property; or

     (c) Correct errors in the appraisal report.

     (Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004; R058-08, 4-23-2009; R035-10, 7-22-2010) — (Substituted in revision for NAC 645B.330)

     NAC 645B.510  Reporting of violations to Registry; procedure for challenging report. (NRS 645B.060, 645F.292, 645F.293)

     1.  The Division shall regularly report violations of this chapter and chapter 645B of NRS, enforcement actions and other relevant information, including, without limitation, violations of any applicable federal law or regulation, to the Registry pursuant to the protocols of the Registry.

     2.  A person may challenge information provided by the Division to the Registry.

     3.  A challenge must be sent in writing by regular mail to the Division and addressed to the Office of the Commissioner.

     4.  Once received, the Division shall consider the merits of a challenge and provide the person with a written reply which must be sent by regular mail to the person within 30 days after receipt of the challenge.

     5.  The person may send a written rebuttal within 30 days after receipt of the Division’s reply by regular mail to the Division and addressed to the Office of the Commissioner.

     6.  Upon receipt of the written rebuttal, the Commissioner will make a written final decision concerning the written rebuttal and underlying challenge and send the final decision by regular mail to the person within 30 days.

     7.  If, pursuant to subsection 6, the Commissioner upholds a challenge, the Commissioner will promptly take action to correct the information submitted to the Registry.

     8.  The Commissioner will not submit a challenge, reply, rebuttal or final decision described in this section to the Registry unless otherwise required by law.

     (Added to NAC by Comm’r of Mortgage Lending by R035-10, eff. 7-22-2010)

     NAC 645B.515  Orders to cease and desist from certain activities. (NRS 645B.060, 645B.720)

     1.  If a person engages in an activity in violation of the provisions of this chapter or chapter 645B of NRS, the Commissioner may issue an order to the person directing the person to cease and desist from engaging in the activity.

     2.  The order to cease and desist must be in writing and must state that, in the opinion of the Commissioner, the person has engaged in an activity:

     (a) For which the person has not received a license or certificate of exemption as required by chapter 645B of NRS; or

     (b) In a manner that violates the provisions of this chapter or chapter 645B of NRS.

     3.  A person who receives an order to cease and desist pursuant to this section shall not engage in any activity governed by chapter 645B of NRS after receiving the order unless the order is suspended or rescinded.

     4.  Not later than 30 calendar days after receiving an order pursuant to this section, the person who receives the order may file a verified petition with the Commissioner to request a hearing. Upon receipt of the verified petition, the Commissioner may, for good cause shown, suspend the order pending the hearing. The Commissioner will hold the hearing on a date not later than 30 calendar days after the date the petition is filed unless the Commissioner and the person agree to another date. The order to cease and desist is rescinded if the Commissioner fails to:

     (a) Hold a hearing:

          (1) Not later than 30 calendar days after the date the petition is filed; or

          (2) On a date agreed to by the Commissioner and the person; or

     (b) Render a written decision within 45 days after the date the hearing is concluded.

     5.  The decision of the Commissioner after a hearing is a final decision of the Division for the purposes of judicial review.

     (Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000) — (Substituted in revision for NAC 645B.340)

     NAC 645B.520  Suspension or revocation of license for major violation. (NRS 645B.060, 645B.700)  The Commissioner will suspend or revoke the license of a person who commits a major violation.

     (Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000) — (Substituted in revision for NAC 645B.350)

     NAC 645B.525  Hearings: Coordination and notice of time and location. (NRS 645B.060)  The hearing officer shall:

     1.  Attempt to coordinate the time and location of the hearing with the parties before setting the matter; and

     2.  Advise the Commissioner or his or her designee in writing of the time and location of the hearing in such a manner as to allow the Division to comply with the notice requirements of NRS 233B.121.

     (Added to NAC by Comm’r of Mortgage Lending by R069-08, eff. 4-23-2009)

     NAC 645B.530  Hearings: Continuances. (NRS 645B.060)

     1.  The time of a hearing may be continued by the hearing officer upon the written petition of a party only for good cause shown.

     2.  The party requesting a continuance must serve the written petition upon the opposing party at the time that the request is made, and the opposing party may file an objection to the request for a continuance within 3 days after receipt of the written petition.

     (Added to NAC by Comm’r of Mortgage Lending by R069-08, eff. 4-23-2009)

     NAC 645B.532  Hearings: Designation of hearing officer. (NRS 645B.060)  The Commissioner may designate a hearing officer to conduct any hearing required pursuant to this chapter or chapter 645B of NRS.

     (Added to NAC by Comm’r of Mortgage Lending by R125-16, eff. 1-27-2017)

     NAC 645B.535  Hearings: Representation of respondent. (NRS 645B.060)  A respondent may represent himself or herself at the hearing or be represented by an attorney.

     (Added to NAC by Comm’r of Mortgage Lending by R069-08, eff. 4-23-2009)

     NAC 645B.540  Hearings: Disclosure of exhibits and list of witnesses; limitations on discovery. (NRS 645B.060)

     1.  If a hearing has been requested pursuant to NRS 645B.750 in a timely manner, each party must provide to the opposing party, not less than 10 days before a hearing, a copy of all papers, records, data or documents expected to be used as exhibits at the hearing and a list of witnesses expected to testify at the hearing. Nothing herein prohibits a party from calling a rebuttal witness or offering other rebuttal evidence which has not been disclosed if allowed by the hearing officer. The filing of a motion does not toll the time for providing information to an opposing party.

     2.  Not less than 5 days before a hearing, each party must provide to the hearing officer a copy of all papers, records, data or documents expected to be used as exhibits at the hearing and a list of witnesses expected to testify at the hearing.

     3.  If a party fails to provide any document required to be provided by the provisions of this section, the hearing officer may exclude the document.

     4.  Neither party may serve interrogatories on the other party or conduct depositions, and neither party may engage in any other discovery unless otherwise required by law and permitted by the hearing officer.

     (Added to NAC by Comm’r of Mortgage Lending by R069-08, eff. 4-23-2009)

     NAC 645B.545  Hearings: Motions. (NRS 645B.060)

     1.  All motions, unless made to exclude a witness, must be in writing.

     2.  A written motion must be served on the opposing party and the hearing officer at least 15 days before the time set for the hearing on the motion unless good cause is shown to the hearing officer.

     3.  An opposing party may file a written response to a motion at least 7 days before the time set for the hearing on the motion by serving the written response on all parties and the hearing officer.

     4.  No motion for summary judgment will be allowed.

     (Added to NAC by Comm’r of Mortgage Lending by R069-08, eff. 4-23-2009)

     NAC 645B.550  Hearings: Procedure. (NRS 645B.060)

     1.  The hearing officer shall:

     (a) Ascertain whether all persons ordered to appear under subpoena are present and whether all documents, books, records and other evidence under subpoena are present in the hearing room.

     (b) Administer the oath to the reporter as follows:

 

Do you solemnly swear or affirm that you will report this hearing to the best of your stenographic ability?

 

     (c) Administer the oath to all persons whose testimony will be taken as follows:

 

Do you and each of you solemnly swear or affirm to tell the truth and nothing but the truth in these proceedings?

 

     (d) Ascertain whether either party desires to have a witness excluded from the hearing room until he or she is called. A witness may be excluded upon the motion of the hearing officer or upon the motion of either party. If a witness is excluded, he or she will be instructed not to discuss the case during the pendency of the proceeding. The respondent will be allowed to remain present at the hearing. The Division may designate a person who is a member of the staff of the Division and who may also be a witness to act as its representative. Such a representative will be allowed to remain present at the hearing.

     (e) Ascertain whether a copy of the complaint or decision to deny has been filed and whether an answer has been filed as part of the record in the proceedings.

     (f) Hear any preliminary motions, stipulations or orders upon which the parties agree and address any administrative details.

     (g) Request the Division to proceed with the presentation of its case.

     2.  Parties may waive opening and closing statements.

     3.  The respondent may cross-examine witnesses in the order that the Division presents them.

     4.  Witnesses or counsel may be questioned by the hearing officer at any time during the proceeding.

     5.  Evidence which will be introduced or which is used by a witness:

     (a) Must first be marked for identification; and

     (b) May be received by the hearing officer at any point during the proceeding.

     6.  When the Division has completed its presentation, the hearing officer shall request the respondent to proceed with the introduction of evidence and calling of witnesses on his or her behalf.

     7.  The Division may cross-examine witnesses in the order that the respondent presents them.

     8.  When the respondent has completed his or her presentation, the Division may call any rebuttal witnesses.

     9.  When all testimony for the Division and respondent has been given and all evidence has been submitted, the hearing officer may request the Division and the respondent to summarize their presentations.

     10.  The hearing officer may, in his or her discretion, waive or modify any provision of this section if necessary to expedite or ensure the fairness of the hearing.

     (Added to NAC by Comm’r of Mortgage Lending by R069-08, eff. 4-23-2009)

     NAC 645B.555  Hearings: Burden and standard of proof. (NRS 645B.060)  The Division has the burden of proof in any hearing pursuant to this chapter. The standard of proof in such a hearing is a preponderance of the evidence.

     (Added to NAC by Comm’r of Mortgage Lending by R069-08, eff. 4-23-2009; A by R125-16, 1-27-2017)

     NAC 645B.560  Hearings: Rules of evidence; informality of proceedings. (NRS 645B.060)

     1.  In conducting any hearing, the hearing officer is not bound by the technical rules of evidence, and any informality in any proceeding or in the manner of taking testimony does not invalidate any order or decision of the hearing officer. The rules of evidence of courts of this State will be followed generally but may be relaxed at the discretion of the hearing officer if deviation from the technical rules of evidence will aid in determining the facts.

     2.  Any evidence offered at a hearing must be material and relevant to the issues of the hearing.

     3.  Sworn declarations may be introduced in lieu of testimony if a witness resides outside the State of Nevada.

     4.  The hearing officer may exclude inadmissible, incompetent, repetitious or irrelevant evidence or order that the presentation of that evidence be discontinued.

     5.  A party who objects to the introduction of evidence shall briefly state the grounds of the objection at the time the evidence is offered. The party who offers the evidence may present a rebuttal argument to the objection.

     (Added to NAC by Comm’r of Mortgage Lending by R069-08, eff. 4-23-2009)

     NAC 645B.565  Hearings: Decision of hearing officer. (NRS 645B.060)  The hearing officer shall issue and serve upon all parties a written decision meeting the requirements of NRS 233B.125 within 30 days after the close of the hearing.

     (Added to NAC by Comm’r of Mortgage Lending by R069-08, eff. 4-23-2009)

     NAC 645B.570  Posthearing motions. (NRS 645B.060)

     1.  A party may file a posthearing motion only to request a rehearing or to request a modification of the discipline, fine, costs or attorney’s fees imposed against a respondent.

     2.  Any posthearing motion must be filed within 15 days after service of the decision by the hearing officer.

     3.  The opposing party may file an opposition within 10 days after a posthearing motion is filed, and the moving party may file a final reply within 5 days after an opposition is filed.

     4.  The hearing officer shall issue and serve upon all parties a written decision on any posthearing motion within 30 days after the posthearing motion is filed.

     (Added to NAC by Comm’r of Mortgage Lending by R069-08, eff. 4-23-2009)

     NAC 645B.575  Informal disposition of contested cases; consent and settlement agreements. (NRS 645B.060)

     1.  The provisions of this chapter do not affect or limit the authority of the Commissioner or his or her designee, at any stage of a contested case, to make an informal disposition of the contested case pursuant to subsection 5 of NRS 233B.121 or to enter into a consent or settlement agreement pursuant to NRS 622.330.

     2.  Any action taken by the Commissioner or his or her designee pursuant to subsection 1:

     (a) Is not subject to approval by the hearing officer; and

     (b) May have its terms placed into the record at the discretion of the Commissioner or his or her designee.

     (Added to NAC by Comm’r of Mortgage Lending by R069-08, eff. 4-23-2009)

     NAC 645B.580  Immunity from civil liability. (NRS 645B.060)

     1.  A person who provides a governmental entity, officer or employee with any information relating to a contested case is immune from any civil liability for providing that information if the person acted in good faith and without malicious intent.

     2.  A governmental entity, officer or employee is immune from any civil liability for:

     (a) Any decision or action taken in good faith and without malicious intent in carrying out the provisions of this chapter or any law or regulation governing occupational licensing; or

     (b) Communicating or cooperating with or providing any documents or other information to any other governmental entity, officer or employee conducting an investigation, disciplinary proceeding or civil or criminal prosecution.

     (Added to NAC by Comm’r of Mortgage Lending by R069-08, eff. 4-23-2009)