NRS: CHAPTER 645F - MORTGAGE LENDING AND RELATED PROFESSIONS

[Rev. 1/18/2009 1:54:43 PM]

CHAPTER 645F - MORTGAGE LENDING AND RELATED PROFESSIONS

GENERAL PROVISIONS

NRS 645F.010 Definitions.

NRS 645F.020 “Commissioner” defined.

NRS 645F.030 “Division” defined.

NRS 645F.040 “Escrow agency” defined.

NRS 645F.050 “Mortgage banker” defined.

NRS 645F.060 “Mortgage broker” defined.

COMMISSIONER OF MORTGAGE LENDING

NRS 645F.150 Qualifications; restrictions on other employment or offices.

NRS 645F.160 Commissioner prohibited from having interest in regulated entity or engaging in business as personal loan broker.

NRS 645F.170 Oath of Commissioner.

NRS 645F.180 Appointment of deputy commissioners and other employees; use of certified public accountant for audits and examinations; assessments paid by regulated entities for audits and examinations.

NRS 645F.190 Oath of deputy commissioners.

REGULATION AND SUPERVISION

NRS 645F.250 Commissioner and Division to administer chapters governing mortgage lending and related professions.

NRS 645F.260 State Board of Finance to act in advisory capacity.

NRS 645F.270 Fund for Mortgage Lending: Creation; use; no reversion to State General Fund; administration; interest and income; payment of claims.

NRS 645F.280 Rates paid by regulated entities for supervision and examination by Commissioner and Division.

NRS 645F.290 Assessments paid by regulated entities for legal services provided by Attorney General to Commissioner and Division.

FORECLOSURE CONSULTANTS AND FORECLOSURE PURCHASERS

General Provisions

NRS 645F.300 Definitions.

NRS 645F.310 “Covered service” defined.

NRS 645F.320 “Foreclosure consultant” defined.

NRS 645F.330 “Foreclosure purchaser” defined.

NRS 645F.340 “Foreclosure reconveyance” defined.

NRS 645F.350 “Foreclosure sale” defined.

NRS 645F.360 “Homeowner” defined.

NRS 645F.370 “Residence in foreclosure” defined.

NRS 645F.380 Applicability.

Unlawful Acts and Penalties

NRS 645F.400 Foreclosure consultants: Prohibited acts.

NRS 645F.410 Foreclosure consultants: Administrative penalties; disposition of money collected as administrative penalties; appointment of hearing officers or panels by Commissioner; claims for attorney’s fees and investigative costs.

NRS 645F.420 Foreclosure consultants: Homeowner may bring action to recover damages.

NRS 645F.430 Foreclosure purchasers: Criminal penalty for fraud or deceit against homeowner.

NRS 645F.440 Foreclosure purchasers: Transaction rescinded due to fraud or deceit upon homeowner.

NRS 645F.450 Cumulative nature of penalties.

_________

GENERAL PROVISIONS

NRS 645F.010 Definitions. As used in this chapter, unless the context otherwise requires, the words and terms defined in NRS 645F.020 to 645F.060, inclusive, have the meanings ascribed to them in those sections.

(Added to NRS by 2003, 3537)

NRS 645F.020 “Commissioner” defined. “Commissioner” means the Commissioner of Mortgage Lending.

(Added to NRS by 2003, 3537)

NRS 645F.030 “Division” defined. “Division” means the Division of Mortgage Lending of the Department of Business and Industry.

(Added to NRS by 2003, 3537)

NRS 645F.040 “Escrow agency” defined. “Escrow agency” has the meaning ascribed to it in NRS 645A.010.

(Added to NRS by 2003, 3537)

NRS 645F.050 “Mortgage banker” defined. “Mortgage banker” has the meaning ascribed to it in NRS 645E.100.

(Added to NRS by 2003, 3537)

NRS 645F.060 “Mortgage broker” defined. “Mortgage broker” has the meaning ascribed to it in NRS 645B.0127.

(Added to NRS by 2003, 3537)

COMMISSIONER OF MORTGAGE LENDING

NRS 645F.150 Qualifications; restrictions on other employment or offices. The Commissioner:

1. Must be a person who has had practical experience in the financial services industry or the business of making loans secured by an interest in real property.

2. Except as otherwise provided in NRS 284.143, shall devote his entire time and attention to the business of his office and shall not pursue any other business or occupation or hold any other office of profit.

(Added to NRS by 2003, 3537)

NRS 645F.160 Commissioner prohibited from having interest in regulated entity or engaging in business as personal loan broker. The Commissioner shall not, either directly or indirectly, be interested in any escrow agency, mortgage broker or mortgage banker to which chapters 645A, 645B and 645E of NRS apply, nor engage in business as a personal loan broker.

(Added to NRS by 2003, 3538)

NRS 645F.170 Oath of Commissioner. After appointment and before entering upon the discharge of the duties of his office, the Commissioner shall take and subscribe to an official oath.

(Added to NRS by 2003, 3538)

1. The Commissioner may appoint deputy commissioners of mortgage lending, examiners, assistants, clerks, stenographers and other employees necessary to assist him in the performance of his duties pursuant to this chapter, chapters 645A, 645B and 645E of NRS or any other law. These employees shall perform such duties as are assigned to them by the Commissioner.

2. The Commissioner may employ or contract with a certified public accountant to review and conduct independent audits and examinations of escrow agencies, mortgage brokers and mortgage bankers. The Commissioner shall levy an assessment upon each licensed escrow agency, mortgage broker and mortgage banker to cover all the costs related to the employment of or the contract with the certified public accountant and the performance of the audits and examinations.

3. Assessments collected by the Commissioner pursuant to subsection 2 must be deposited in the State Treasury for deposit to the Fund for Mortgage Lending created by NRS 645F.270 and accounted for separately. The Commissioner shall use the money for the purposes specified in subsection 2.

(Added to NRS by 2003, 3538)

NRS 645F.190 Oath of deputy commissioners. Each deputy commissioner of mortgage lending shall, before entering upon the discharge of his duties, take and subscribe to the constitutional oath of office.

(Added to NRS by 2003, 3538)

REGULATION AND SUPERVISION

NRS 645F.250 Commissioner and Division to administer chapters governing mortgage lending and related professions. The Commissioner and the Division shall administer the provisions of this chapter and chapters 645A, 645B and 645E of NRS, subject to administrative supervision by the Director of the Department of Business and Industry.

(Added to NRS by 2003, 3537)

NRS 645F.260 State Board of Finance to act in advisory capacity. The State Board of Finance shall act in an advisory capacity to the Division in the administration of this chapter and chapters 645A, 645B and 645E of NRS.

(Added to NRS by 2003, 3538)

NRS 645F.270 Fund for Mortgage Lending: Creation; use; no reversion to State General Fund; administration; interest and income; payment of claims.

1. The Fund for Mortgage Lending is hereby created in the State Treasury as a special revenue fund.

2. Except as otherwise provided by law, any money collected by the Commissioner or Division pursuant to law:

(a) Must be deposited in the Fund for Mortgage Lending; and

(b) May only be used to:

(1) Carry out the programs and laws administered by the Commissioner and the Division; and

(2) Pay the expenses related to the operations of the Commissioner and the Division.

3. Except as otherwise provided by law, any money that remains in the Fund for Mortgage Lending at the end of the fiscal year does not revert to the State General Fund, and the balance of the Fund for Mortgage Lending must be carried forward to the next fiscal year.

4. The Commissioner shall administer the Fund for Mortgage Lending. Any interest or income earned on the money in the Fund must be credited to the Fund after deducting any applicable charges. Any claims against the Fund must be paid as other claims against the State are paid.

(Added to NRS by 2003, 3539)

NRS 645F.280 Rates paid by regulated entities for supervision and examination by Commissioner and Division.

1. The Commissioner shall establish by regulation rates to be paid by escrow agencies, mortgage agents, mortgage brokers and mortgage bankers for supervision and examinations by the Commissioner or the Division.

2. In establishing a rate pursuant to subsection 1, the Commissioner shall consider:

(a) The complexity of the various examinations to which the rate applies;

(b) The skill required to conduct the examinations;

(d) Any other factors the Commissioner deems relevant.

(Added to NRS by 2003, 3538)

NRS 645F.290 Assessments paid by regulated entities for legal services provided by Attorney General to Commissioner and Division.

1. The Commissioner shall collect an assessment pursuant to this section from each:

(a) Escrow agency that is supervised pursuant to chapter 645A of NRS;

(b) Mortgage broker that is supervised pursuant to chapter 645B of NRS; and

2. The Commissioner shall determine the total amount of all assessments to be collected from the entities identified in subsection 1, but that amount must not exceed the amount necessary to recover the cost of legal services provided by the Attorney General to the Commissioner and to the Division. The total amount of all assessments collected must be reduced by any amounts collected by the Commissioner from an entity for the recovery of the costs of legal services provided by the Attorney General in a specific case.

3. The Commissioner shall collect from each entity identified in subsection 1 an assessment that is based on:

(a) An equal basis; or

(b) Any other reasonable basis adopted by the Commissioner.

4. The assessment required by this section is in addition to any other assessment, fee or cost required by law to be paid by an entity identified in subsection 1.

5. Money collected by the Commissioner pursuant to this section must be deposited in the Fund for Mortgage Lending created by NRS 645F.270.

(Added to NRS by 2003, 3538; A 2003, 20th Special Session, 258)

FORECLOSURE CONSULTANTS AND FORECLOSURE PURCHASERS

General Provisions

NRS 645F.300 Definitions. As used in NRS 645F.300 to 645F.450, inclusive, unless the context otherwise requires, the words and terms defined in NRS 645F.310 to 645F.370, inclusive, have the meanings ascribed to them in those sections.

(Added to NRS by 2007, 2854)

NRS 645F.310 “Covered service” defined. “Covered service” includes, without limitation:

1. Financial counseling, including, without limitation, debt counseling and budget counseling.

2. Receiving money for the purpose of distributing it to creditors in payment or partial payment of any obligation secured by a mortgage or other lien on a residence in foreclosure.

3. Contacting a creditor on behalf of a homeowner.

4. Arranging or attempting to arrange for an extension of the period within which a homeowner may cure his default and reinstate his obligation pursuant to a note, mortgage or deed of trust.

5. Arranging or attempting to arrange for any delay or postponement of the time of a foreclosure sale.

6. Advising the filing of any document or assisting in any manner in the preparation of any document for filing with a bankruptcy court.

7. Giving any advice, explanation or instruction to a homeowner which in any manner relates to the cure of a default in or the reinstatement of an obligation secured by a mortgage or other lien on the residence in foreclosure, the full satisfaction of the obligation, or the postponement or avoidance of a foreclosure sale.

(Added to NRS by 2007, 2854)

NRS 645F.320 “Foreclosure consultant” defined. “Foreclosure consultant” means a person who, directly or indirectly, makes any solicitation, representation or offer to a homeowner to perform for compensation, or who, for compensation, performs any covered service that the person represents will do any of the following:

1. Prevent or postpone a foreclosure sale;

2. Obtain any forbearance from any mortgagee or beneficiary of a deed of trust;

3. Assist the homeowner to exercise the right of reinstatement provided in the legal documents;

4. Obtain any extension of the period within which the homeowner may reinstate the homeowner’s obligation;

5. Obtain any waiver of an acceleration clause contained in any promissory note or contract secured by a mortgage on a residence in foreclosure or included in the mortgage or deed of trust;

6. Assist the homeowner in foreclosure or loan default to obtain a loan or advance of money;

7. Avoid or ameliorate the impairment of the homeowner’s credit resulting from the recording of a notice of default or the conduct of a foreclosure sale;

8. Save the homeowner’s residence from foreclosure; or

9. Assist the homeowner to obtain a foreclosure reconveyance.

(Added to NRS by 2007, 2854)

NRS 645F.330 “Foreclosure purchaser” defined. “Foreclosure purchaser” means a person who, in the course of his business, vocation or occupation, acquires or attempts to acquire title to a residence in foreclosure from a homeowner.

(Added to NRS by 2007, 2855)

NRS 645F.340 “Foreclosure reconveyance” defined.

1. “Foreclosure reconveyance” means a transaction that involves:

(a) The transfer of title to a residence in foreclosure by a homeowner during a foreclosure proceeding by:

(1) The transfer of an interest in the residence in foreclosure from the homeowner; or

(2) The creation of a mortgage or other lien during the foreclosure process that allows the acquirer to obtain title to the residence in foreclosure by redeeming the property as a junior lien holder; and

(b) The subsequent conveyance, or promise of a subsequent conveyance, of an interest in the residence to the former homeowner by the acquirer, or a person acting in concert with the acquirer, that allows the former homeowner to remain in possession of the residence following the completion of the foreclosure proceeding.

2. As used in this section, “interest in the residence” includes, without limitation, an interest in a contract for a deed, a purchase agreement, and an option to purchase or lease.

(Added to NRS by 2007, 2855)

NRS 645F.350 “Foreclosure sale” defined. “Foreclosure sale” means the sale of real property to enforce an obligation secured by a mortgage or lien on the property, including the exercise of a trustee’s power of sale pursuant to NRS 107.080.

(Added to NRS by 2007, 2855)

NRS 645F.360 “Homeowner” defined. “Homeowner” means the record owner of a residence in foreclosure at the time the notice of the pendency of an action for foreclosure is recorded pursuant to NRS 14.010 or the notice of default and election to sell is recorded pursuant to NRS 107.080.

(Added to NRS by 2007, 2855)

NRS 645F.370 “Residence in foreclosure” defined. “Residence in foreclosure” means residential real property consisting of not more than four family dwelling units, one of which the homeowner occupies as his principal place of residence, and against which there is an outstanding notice of the pendency of an action for foreclosure recorded pursuant to NRS 14.010 or notice of default and election to sell recorded pursuant to NRS 107.080.

(Added to NRS by 2007, 2855)

NRS 645F.380 Applicability. The provisions of NRS 645F.300 to 645F.450, inclusive, do not apply to, and the terms “foreclosure consultant” and “foreclosure purchaser” do not include:

1. An attorney at law rendering services in the performance of his duties as an attorney at law;

2. A person, firm, company or corporation licensed to engage in the business of debt adjustment pursuant to chapter 676 of NRS while engaging in that business;

3. A person licensed as a real estate broker, broker-salesman or salesman pursuant to chapter 645 of NRS while acting under the authority of that license;

4. A person or the authorized agent of a person acting under the provisions of a program sponsored by the Federal Government, this State or a local government, including, without limitation, the Department of Housing and Urban Development, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association or the Federal Home Loan Bank;

5. A person who holds or is owed an obligation secured by a mortgage or other lien on a residence in foreclosure if the person performs services in connection with this obligation or lien and the obligation or lien did not arise as the result of or as part of a proposed foreclosure reconveyance;

6. Any person doing business under the laws of this State or of the United States relating to banks, trust companies, savings and loan associations, industrial loan and thrift companies, regulated lenders, credit unions, insurance companies, or a mortgagee which is a United States Department of Housing and Urban Development approved mortgagee and any subsidiary or affiliate of those persons, and any agent or employee of those persons while engaged in the business of those persons;

7. A person licensed as an escrow agent, title agent, mortgage agent, mortgage broker or mortgage banker pursuant to chapter 645A, 692A, 645B or 645E of NRS, respectively, while acting under the authority of his license;

8. A nonprofit agency or organization that offers credit counseling or advice to a homeowner of a residence in foreclosure or a person in default on a loan; or

9. A judgment creditor of the homeowner whose claim accrued before the recording of the notice of the pendency of an action for foreclosure against the homeowner pursuant to NRS 14.010 or the recording of the notice of default and election to sell pursuant to NRS 107.080.

(Added to NRS by 2007, 2855)

Unlawful Acts and Penalties

NRS 645F.400 Foreclosure consultants: Prohibited acts. A foreclosure consultant shall not:

1. Claim, demand, charge, collect or receive any compensation until after the foreclosure consultant has fully performed each covered service that he contracted to perform or represented he would perform.

2. Claim, demand, charge, collect or receive any fee, interest or other compensation for any reason which is not fully disclosed to the homeowner.

3. Take any wage assignment, lien on real or personal property, assignment of a homeowner’s equity or other interest in a residence in foreclosure or other security for the payment of compensation. Any such security is void and unenforceable.

4. Receive any consideration from any third party in connection with a covered service provided to a homeowner unless the consideration is first fully disclosed to the homeowner.

5. Acquire, directly or indirectly, any interest in the residence in foreclosure of a homeowner with whom the foreclosure consultant has contracted to perform a covered service.

6. Accept a power of attorney from a homeowner for any purpose, other than to inspect documents as provided by law.

(Added to NRS by 2007, 2856)

1. In addition to any other remedy or penalty, the Commissioner may, after giving notice and opportunity to be heard, impose an administrative penalty of not more than $10,000 on a foreclosure consultant who violates any provision of NRS 645F.400.

2. Except as otherwise provided in this section, all money collected from administrative penalties imposed pursuant to this section must be deposited in the State General Fund.

3. The money collected from an administrative penalty may be deposited with the State Treasurer for credit to the Fund for Mortgage Lending created by NRS 645F.270 if:

(a) The person pays the administrative penalty without exercising his right to a hearing to contest the penalty; or

(b) The administrative penalty is imposed in a hearing conducted by a hearing officer or panel appointed by the Commissioner.

4. The Commissioner may appoint one or more hearing officers or panels and may delegate to those hearing officers or panels the power of the Commissioner to conduct hearings, determine violations and impose the penalties authorized by this section.

5. If money collected from an administrative penalty is deposited in the State General Fund, the Commissioner may present a claim to the State Board of Examiners for recommendation to the Interim Finance Committee if money is needed to pay attorney’s fees or the costs of an investigation, or both.

(Added to NRS by 2007, 2856)

NRS 645F.420 Foreclosure consultants: Homeowner may bring action to recover damages.

1. A homeowner who is injured as a result of a foreclosure consultant’s violation of a provision of NRS 645F.400 may bring an action against the foreclosure consultant to recover damages caused by the violation, together with reasonable attorney’s fees and costs.

2. If the homeowner prevails in the action, the court may award such punitive damages as may be determined by a jury, or by a court sitting without a jury, but in no case may the punitive damages be less than one and one-half times the amount awarded to the homeowner as actual damages.

(Added to NRS by 2007, 2857)

NRS 645F.430 Foreclosure purchasers: Criminal penalty for fraud or deceit against homeowner. A foreclosure purchaser who engages in any conduct that operates as a fraud or deceit upon a homeowner in connection with a transaction that is subject to the provisions of NRS 645F.300 to 645F.450, inclusive, including, without limitation, a foreclosure reconveyance, is guilty of a gross misdemeanor and shall be punished by imprisonment in the county jail for not more than 1 year, or by a fine of not more than $50,000, or by both fine and imprisonment.

(Added to NRS by 2007, 2857)

NRS 645F.440 Foreclosure purchasers: Transaction rescinded due to fraud or deceit upon homeowner.

1. In addition to the penalty provided in NRS 645F.430 and except as otherwise provided in subsection 5, if a foreclosure purchaser engages in any conduct that operates as a fraud or deceit upon a homeowner in connection with a transaction that is subject to the provisions of NRS 645F.300 to 645F.450, inclusive, including, without limitation, a foreclosure reconveyance, the transaction in which the foreclosure purchaser acquired title to the residence in foreclosure may be rescinded by the homeowner within 2 years after the date of the recording of the conveyance.

2. To rescind a transaction pursuant to subsection 1, the homeowner must give written notice to the foreclosure purchaser and a successor in interest to the foreclosure purchaser, if the successor in interest is not a bona fide purchaser, and record that notice with the recorder of the county in which the property is located. The notice of rescission must contain:

(a) The name of the homeowner, the foreclosure purchaser and any successor in interest who holds title to the property; and

(b) A description of the property.

3. Within 20 days after receiving notice pursuant to subsection 2:

(a) The foreclosure purchaser and the successor in interest, if the successor in interest is not a bona fide purchaser, shall reconvey to the homeowner title to the property free and clear of encumbrances which were created subsequent to the rescinded transaction and which are due to the actions of the foreclosure purchaser; and

(b) The homeowner shall return to the foreclosure purchaser any consideration received from the foreclosure purchaser in exchange for the property.

4. If the foreclosure purchaser has not reconveyed to the homeowner title to the property within the period described in subsection 3, the homeowner may bring an action to enforce the rescission in the district court of the county in which the property is located.

5. A transaction may not be rescinded pursuant to this section if the foreclosure purchaser has transferred the property to a bona fide purchaser.

6. As used in this section, “bona fide purchaser” means any person who purchases an interest in a residence in foreclosure from a foreclosure purchaser in good faith and for valuable consideration and who does not know or have reasonable cause to believe that the foreclosure purchaser engaged in conduct which violates subsection 1.

(Added to NRS by 2007, 2857)

NRS 645F.450 Cumulative nature of penalties. The rights, remedies and penalties provided pursuant to the provisions of NRS 645F.300 to 645F.450, inclusive, are cumulative and do not abrogate and are in addition to any other rights, remedies and penalties that may exist at law or in equity, including, without limitation, any criminal penalty that may be imposed pursuant to NRS 645F.430.

(Added to NRS by 2007, 2858)