[Rev. 11/22/2013 10:16:21 AM--2013]

[NAC-645E Revised Date: 3-12]

CHAPTER 645E - MORTGAGE BANKERS

GENERAL PROVISIONS

645E.010          Definitions.

645E.015          “Affiliated business” defined.

645E.025          “Nationwide Mortgage Licensing System and Registry” and “Registry” defined.

645E.030          “Qualified employee” defined.

645E.035          “S.A.F.E. Mortgage Licensing Act” defined.

645E.045          “Insolvent” interpreted.

EXEMPTIONS

645E.080          Application for certificate of exemption for purpose of fulfilling requirements of S.A.F.E. Mortgage Licensing Act.

645E.090          Provision of certain information to Commissioner by regulating entity or agency.

645E.100          Unexpired certificate of exemption.

LICENSING AND OPERATION

645E.200          Qualifications of applicant: Required experience.

645E.203          Qualifications of applicant: Compliance with federal and state law; licensure through Registry.

645E.207          Qualifications of applicant: Requirements for licensure pursuant to NRS 645E.200.

645E.210          Documentation required with application for license; conditional approval; effect of failure to respond to written request for information.

645E.220          Branch office: Prerequisites and name for issuance of license; display of license; responsibilities of mortgage banker; conditional approval; effect of failure to respond to written request for information.

645E.223          Requirements for reinstatement of license.

645E.225          Sharing office space with another business.

645E.235          Change of electronic mail address.

645E.240          Use of fictitious name.

645E.250          Use of same name, confusingly similar name or name not approved by Division.

645E.260          Activity constituting verifiable business; submission of evidence of activity.

645E.270          Activity not constituting services as mortgage banker.

645E.280          Circumstances under which person is or is not considered to be making loan secured by lien on real property using his or her own money.

645E.285          Representation of activity as licensed; restrictions on advertising.

645E.290          Disclosures to borrowers by certain persons acting in dual capacity.

645E.295          Insider loans: Limitations and conditions.

SUPERVISION BY COMMISSIONER

General Provisions

645E.310          Qualified employee: Designation and approval.

645E.315          Change in ownership, control, management, principal employees or principal or branch office.

645E.320          Fee for supervision and related activities: Amount; collection; failure to pay; accounting of time billed.

645E.321          Grounds for denial of renewal of license.

645E.323          Surety bonds.

645E.327          Submission of information or payment of fees by applicant or licensee.

Examinations, Audits and Investigations

645E.330          Assessment for costs related to audits and examinations.

645E.335          Authority of examiner, auditor or investigator.

645E.337          Proof of adverse change in financial condition.

645E.340          Rating of mortgage banker upon completion of examination.

645E.345          Results of examination: Preparation and review of draft report; final report; confidentiality; action by Commissioner.

Records and Reports

645E.350          Monthly reports.

645E.355          “Complete and suitable records” interpreted for purposes of NRS 645E.350.

645E.360          Retention and maintenance of certain records.

APPRAISALS

645E.400          Preparation of appraisal submitted to lender.

ENFORCEMENT

645E.500          Referral of certain suspected violations to and cooperation and sharing of information with federal and state agencies for investigation and action of certain suspected violations; grounds for disciplinary action.

645E.505          Reporting of violations to Registry; procedure for challenging report.

645E.510          Orders to cease and desist from certain activities.

HEARINGS

645E.515          Coordination and notice of time and location.

645E.520          Continuances.

645E.525          Representation of respondent.

645E.530          Disclosure of exhibits and list of witnesses; limitations on discovery.

645E.535          Motions.

645E.540          Procedure.

645E.545          Burden and standard of proof.

645E.550          Rules of evidence; informality of proceedings.

645E.555          Decision of hearing officer.

645E.560          Posthearing motions.

645E.565          Informal disposition of contested cases; consent and settlement agreements.

645E.570          Immunity from civil liability.

 

 

 

GENERAL PROVISIONS

      NAC 645E.010  Definitions. (NRS 645E.300)  As used in this chapter, unless the context otherwise requires, the words and terms defined in NRS 645E.020 to 645E.100, inclusive, and NAC 645E.015 to 645E.035, inclusive, have the meanings ascribed to them in those sections.

     (Added to NAC by Comm’r of Financial Institutions by R046-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R088-04, 8-25-2004; R038-10, 7-22-2010)

      NAC 645E.015  “Affiliated business” defined. (NRS 645E.300)

     1.  “Affiliated business” means a business which a mortgage banker or any general partner, officer, director or employee of the mortgage banker:

     (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 R088-04, eff. 8-25-2004)

      NAC 645E.025  “Nationwide Mortgage Licensing System and Registry” and “Registry” defined. (NRS 645E.300)  “Nationwide Mortgage Licensing System and Registry” or “Registry” has the meaning ascribed to it in NRS 645B.0128.

     (Added to NAC by Comm’r of Mortgage Lending by R038-10, eff. 7-22-2010)

      NAC 645E.030  “Qualified employee” defined. (NRS 645E.300)  “Qualified employee” means a natural person who is designated by a mortgage banker to act on behalf of the mortgage banker and who is approved by the Commissioner pursuant to NAC 645E.310.

     (Added to NAC by Comm’r of Financial Institutions by R046-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R053-08, 4-23-2009; R038-10, 7-22-2010)—(Substituted in revision for part of NAC 645E.010)

      NAC 645E.035  “S.A.F.E. Mortgage Licensing Act” defined. (NRS 645E.300)  “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 R038-10, eff. 7-22-2010)

      NAC 645E.045  “Insolvent” interpreted. (NRS 645E.300)  For the purposes of paragraph (a) of subsection 2 of NRS 645E.670, “insolvent” is interpreted to mean that the liabilities of a mortgage banker 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 banker 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 R038-10, eff. 7-22-2010)

EXEMPTIONS

      NAC 645E.080  Application for certificate of exemption for purpose of fulfilling requirements of S.A.F.E. Mortgage Licensing Act. (NRS 645E.300, 645F.292, 645F.293)  Unless otherwise specifically prohibited by federal law and pursuant to the S.A.F.E. Mortgage Licensing Act, any person exempt from licensing pursuant to the provisions of chapter 645E of NRS may file a written application for a certificate of exemption with the Office of the Commissioner for the purposes of fulfilling the requirements of the S.A.F.E. Mortgage Licensing Act, including, without limitation, for the purposes of:

     1.  Registering with the Registry, but such registration does not affect the exempt status of the person;

     2.  Sponsoring a mortgage agent;

     3.  Fulfilling any bonding requirements related to an associated mortgage agent; or

     4.  Fulfilling reports of condition requirements.

     (Added to NAC by Comm’r of Mortgage Lending by R038-10, eff. 7-22-2010)

      NAC 645E.090  Provision of certain information to Commissioner by regulating entity or agency. (NRS 645E.300, 645F.292, 645F.293)

     1.  In addition to the requirements of subsection 1 of NRS 645E.160, a person who claims an exemption from the provisions of chapter 645E of NRS pursuant to subsection 1 of NRS 645E.150 must ensure that the entity or agency which regulates the conduct of the person’s business provides to the Commissioner written notification that:

     (a) The license of the person provides the right to make mortgage loans;

     (b) The entity or agency will investigate complaints arising from or relating to consumers in this State; and

     (c) If the person conducts activity as a residential mortgage loan originator, the person is in compliance with the requirements of the S.A.F.E. Mortgage Licensing Act and any regulation adopted pursuant thereto.

     2.  As used in this section, “residential mortgage loan originator” has the meaning ascribed to it in NRS 645B.01325.

     (Added to NAC by Comm’r of Mortgage Lending by R038-10, eff. 7-22-2010)

      NAC 645E.100  Unexpired certificate of exemption. (NRS 645E.300)  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 R046-00, eff. 9-5-2000)

LICENSING AND OPERATION

      NAC 645E.200  Qualifications of applicant: Required experience. (NRS 645E.200, 645E.300)  An applicant for a license as a mortgage banker must have, within the 5 years immediately preceding the date of his or her application, at least 2 years of verifiable experience in lending money for real estate or mortgages.

     (Added to NAC by Comm’r of Financial Institutions by R046-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R088-04, 8-25-2004; R053-08, 4-23-2009)

      NAC 645E.203  Qualifications of applicant: Compliance with federal and state law; licensure through Registry. (NRS 645E.300, 645F.292, 645F.293)

     1.  Each applicant for a license issued pursuant to chapter 645E of NRS:

     (a) Shall comply with any applicable federal or state law or regulation, including, without limitation:

          (1) The provisions of the S.A.F.E. Mortgage Licensing Act and any regulation adopted pursuant thereto; and

          (2) Any applicable requirement pursuant to chapter 645B, 645E or 645F of NRS or any regulation adopted pursuant thereto, including, without limitation, any applicable requirement relating to:

               (I) A bond; or

               (II) A license for a loan processor or underwriter who is an independent contractor; and

     (b) Must be licensed with the Division through the Registry.

 

     2.  As used in this section:

     (a) “Clerical or support duties” has the meaning ascribed to it in section 1503(4)(B) of the S.A.F.E. Mortgage Licensing Act.

     (b) “Loan processor or underwriter” means a natural person who performs clerical or support duties at the direction of and subject to the supervision and instruction of a person licensed, or exempt from licensing, under chapter 645B or 645E of NRS.

     (Added to NAC by Comm’r of Mortgage Lending by R038-10, eff. 7-22-2010)

      NAC 645E.207  Qualifications of applicant: Requirements for licensure pursuant to NRS 645E.200. (NRS 645E.300)

     1.  Pursuant to subsection 3 of NRS 645E.200, the Commissioner will not issue a license as a mortgage banker unless the requirements of that subsection have been fulfilled.

     2.  For the purposes of subparagraph (2) of paragraph (b) of subsection 3 of NRS 645E.200, 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.

     3.  For the purposes of subparagraph (4) of paragraph (b) of subsection 3 of NRS 645E.200, 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 R038-10, eff. 7-22-2010)

      NAC 645E.210  Documentation required with application for license; conditional approval; effect of failure to respond to written request for information. (NRS 645E.200, 645E.300)

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

     (a) A copy of the applicant’s business license, when applicable, or his or her application for such a license if he or she has not obtained one.

     (b) A copy of the certificate filed by the mortgage banker pursuant to chapter 602 of NRS indicating the fictitious name of the mortgage banker, if any.

     (c) If the applicant is a corporation, a copy of:

          (1) Its articles of incorporation and its bylaws;

          (2) Its balance sheet and a statement of the profit and loss of the corporation for the 2 years immediately preceding the year of the application; and

          (3) The most recent list of its officers and registered agent that is filed with the Secretary of State.

     (d) If the applicant is a partnership or joint venture, a copy of the agreement of partnership or joint venture and the financial statements of the partners for the 2 years immediately preceding the year of the application.

     (e) If the applicant is a corporation being organized, a copy of its proposed articles of incorporation and its bylaws.

     (f) If the applicant is a limited-liability company, a copy of:

          (1) Its articles of organization and operating agreement;

          (2) A statement of the profit and loss of the limited-liability company for the 2 years immediately preceding the year of the application; and

          (3) The most recent list of its members or managers, and registered agent, that is filed with the Secretary of State.

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

     (h) A current electronic mail address.

     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 to any written request for information by the Division within 30 days after the date of the request.

     (Added to NAC by Comm’r of Financial Institutions by R046-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R088-04, 8-25-2004; R053-08, 4-23-2009; R038-10, 7-22-2010)

      NAC 645E.220  Branch office: Prerequisites and name for issuance of license; display of license; responsibilities of mortgage banker; conditional approval; effect of failure to respond to written request for information. (NRS 645E.200, 645E.300, 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 a qualified employee designated to manage the branch office; and

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

     2.  The Commissioner will approve an application for a license for a branch office if:

     (a) The principal office of the mortgage company has been examined by the Commissioner and has received at least a satisfactory rating during the preceding 12 months.

     (b) The Commissioner approves the qualified employee designated to manage the branch office. The Commissioner will not approve a qualified employee to manage a branch office if the qualified employee manages or has been designated and approved to manage another office.

     3.  The Commissioner may waive the requirements of subsection 2 upon good cause shown.

     4.  A license for a branch office may be issued only in the name in which the mortgage banker is licensed to conduct business at its principal office.

     5.  Each branch office must conspicuously display its license at the branch office.

     6.  A mortgage banker is responsible for and shall supervise:

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

     (b) Each qualified employee and mortgage agent authorized to conduct mortgage lending activity at a branch office of the mortgage banker.

     7.  The Commissioner may require that an applicant meet the requirements of the S.A.F.E. Mortgage Licensing Act.

     8.  If an applicant has received a letter of conditional approval of his or her application for a license for a branch office 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 shall 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.

     9.  An application shall be deemed abandoned if the applicant fails to respond to any written request for information by the Division within 30 days after the date of the request.

     (Added to NAC by Comm’r of Financial Institutions by R046-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R088-04, 8-25-2004; R053-08, 4-23-2009; R038-10, 7-22-2010)

      NAC 645E.223  Requirements for reinstatement of license. (NRS 645E.300)  The Commissioner may only reinstate a mortgage banker’s license pursuant to subsection 2 of NRS 645E.280 if, within 2 months after the date on which the license expired, the mortgage banker:

     1.  Submits the items described in subsection 2 of NRS 645E.280; and

     2.  Completes any unfulfilled requirements related to the license.

     (Added to NAC by Comm’r of Mortgage Lending by R038-10, eff. 7-22-2010)

 

      NAC 645E.225  Sharing office space with another business. (NRS 645E.300)

     1.  Except as otherwise provided in subsection 2, a mortgage banker 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 banker 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 R088-04, eff. 8-25-2004)

      NAC 645E.235  Change of electronic mail address. (NRS 645E.300, 645F.292, 645F.293)  If a licensee who provided an electronic mail address to the Division wishes to change that address, the licensee shall make the change and notify the Division through the Registry.

     (Added to NAC by Comm’r of Mortgage Lending by R038-10, eff. 7-22-2010)

      NAC 645E.240  Use of fictitious name. (NRS 645E.200, 645E.300)

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

     (a) Complies with the provisions of 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 banker pursuant to chapter 602 of NRS indicating the fictitious name; and

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

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

     (a) Obtains a certified copy, issued by the appropriate county clerk, of the certificate filed by the mortgage banker 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 banker; and

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

     3.  A mortgage banker may conduct business using more than one fictitious name only if the mortgage banker obtains a separate license issued pursuant to chapter 645E of NRS for each fictitious name under which he or she intends to do business. A mortgage banker 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 banker, regardless of the license or name under which the conduct takes place.

     (Added to NAC by Comm’r of Financial Institutions by R046-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R088-04, 8-25-2004)

 

      NAC 645E.250  Use of same name, confusingly similar name or name not approved by Division. (NRS 645E.300)

     1.  The Division 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 Division.

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

     (Added to NAC by Comm’r of Financial Institutions by R046-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R088-04, 8-25-2004)

      NAC 645E.260  Activity constituting verifiable business; submission of evidence of activity. (NRS 645E.300, 645E.350)

     1.  A person conducts verifiable business as a mortgage banker if the person:

     (a) Handles the arrangements between a borrower and a lender for a loan that is secured by a lien on real property and is consummated as a result of the arrangements; or

     (b) Originates a loan secured by a lien on real property in the capacity of a lender or provider.

     2.  Evidence of activity described in subsection 1 must be submitted to the Commissioner in the monthly report of activity.

     (Added to NAC by Comm’r of Financial Institutions by R046-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R088-04, 8-25-2004)

      NAC 645E.270  Activity not constituting services as mortgage banker. (NRS 645E.300, 645F.292, 645F.293)  A person does not hold himself or herself out as being able to perform the services described in NRS 645E.100 if the person:

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

     2.  Only offers to provide money to invest in loans secured by an interest in real property to:

     (a) A mortgage banker licensed pursuant to chapter 645E of NRS; or

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

     (Added to NAC by Comm’r of Financial Institutions by R046-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R088-04, 8-25-2004; R038-10, 7-22-2010)

      NAC 645E.280  Circumstances under which person is or is not considered to be making loan secured by lien on real property using his or her own money. (NRS 645E.100, 645E.300)

     1.  A person makes a loan secured by a lien on real property using his or her own money if the loan is funded from one or more of the following sources:

     (a) The person’s cash, corporate capital or warehouse credit lines at a depository financial institution or other sources that are liability items on the person’s financial statements.

     (b) An affiliate’s cash, corporate capital or warehouse credit lines at a depository financial institution or other sources that are liability items on the affiliate’s financial statements for which the affiliate’s assets are pledged. As used in this paragraph, “affiliate” means another person who, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the person making the loan.

     2.  A person does not make a loan secured by a lien on real property using his or her own money if, after consummation of the loan, the person sells the loan, or an interest in the loan, to a person from whom he or she would not be authorized to accept money initially to fund the loan.

     (Added to NAC by Comm’r of Financial Institutions by R046-00, eff. 9-5-2000)

      NAC 645E.285  Representation of activity as licensed; restrictions on advertising. (NRS 645E.300, 645F.292, 645F.293)

     1.  A mortgage banker shall not represent an activity which is not licensed pursuant to chapter 645E 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 645E of NRS must be separate and distinct from an advertisement for an activity which is not licensed pursuant to that chapter.

     3.  A mortgage banker 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 mortgage banker must include in his or her advertisements, including any advertising material available on the Internet:

     (a) The complete name of the mortgage banker or the complete name under which the mortgage banker does business.

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

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

     5.  A mortgage banker 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 banker shall not refer to an existing lender or financial institution, other than the mortgage banker himself or herself or any affiliate or subsidiary of the mortgage banker, on any advertising material without the written consent of the lender or financial institution.

     7.  In addition to the requirements of this chapter, each advertisement used in carrying on the business of a mortgage banker must comply with:

     (a) NRS 598.0903 to 598.0999, inclusive, concerning deceptive trade practices; and

     (b) All applicable federal statutes and regulations concerning deceptive advertising and advertising of interest rates.

     8.  An Internet link on a website of the mortgage banker 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 banker.

     9.  For the purposes of this section, “advertisement”:

     (a) Does not include white-page listings, employment recruiting announcements, office signs, banners, magnetic car signs and letterhead which contain only the name, address and telephone number of the mortgage banker, whether together or separate, and which are used for the purpose of identification only.

     (b) Includes commercial messages that promote the availability of mortgage products or investments offered by the mortgage banker. Commercial messages include, without limitation:

          (1) Print media;

          (2) Sales literature;

          (3) Sales brochures or flyers;

          (4) Billboards;

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

          (6) Radio and television advertisements;

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

          (8) Telephone or seminar scripts;

 

 

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

          (10) Business cards.

     10.  As used in this section, “unique identifier” means a number or other identifier assigned by protocols established by the Registry.

     (Added to NAC by Comm’r of Financial Institutions by R046-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R088-04, 8-25-2004; R053-08, 4-23-2009; R038-10, 7-22-2010)—(Substituted in revision for NAC 645E.450)

      NAC 645E.290  Disclosures to borrowers by certain persons acting in dual capacity. (NRS 645E.300)

     1.  A mortgage banker, loan officer or qualified employee 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 banker, loan officer or qualified employee will be receiving compensation for acting as a mortgage banker, loan officer or qualified employee 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 banker, loan officer or qualified employee; and

     (c) That the borrower may contact other mortgage bankers, loan officers or qualified employees to determine if the borrower is receiving the best services related to the loan and the best prices for those services.

     2.  The mortgage banker, loan officer or qualified employee 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 Good Faith Estimate disclosing 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 the 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 702.486.0780 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 R088-04, eff. 8-25-2004)

      NAC 645E.295  Insider loans: Limitations and conditions. (NRS 645E.300, 645E.350)

     1.  Insider loans made or arranged by a mortgage banker 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 funded loans which were made or arranged by the mortgage banker or 100 percent of the mortgage banker’s net worth as evidenced by the mortgage banker’s most recent financial statement submitted to the Commissioner pursuant to NRS 645E.360, whichever is greater; and

     (b) The mortgage banker shall specifically identify on each monthly report required by NRS 645E.350 any insider loan made by the mortgage banker.

     2.  As used in this section:

     (a) “Insider” means a director, officer or employee of a mortgage banker.

     (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 granted by a mortgage banker 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 made by a mortgage banker.

     (Added to NAC by Comm’r of Mortgage Lending by R053-08, eff. 4-23-2009)

SUPERVISION BY COMMISSIONER

General Provisions

      NAC 645E.310  Qualified employee: Designation and approval. (NRS 645E.300, 645F.292, 645F.293)

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

     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 pursuant to NRS 645B.410;

     (b) Is designated by a mortgage banker to act on behalf of the mortgage banker and to supervise the conduct of the business of the mortgage banker and the mortgage agents associated with or employed by the mortgage banker;

     (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) Has met the requirements of the S.A.F.E. Mortgage Licensing Act.

     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, the mortgage banker 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 banker that the initial qualified employee designated pursuant to subsection 1 is not approved; or

          (2) The qualified employee ceases to be a qualified employee pursuant to this section; or

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

     (Added to NAC by Comm’r of Financial Institutions by R046-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R088-04, 8-25-2004; R038-10, 7-22-2010)

      NAC 645E.315  Change in ownership, control, management, principal employees or principal or branch office. (NRS 645E.300, 645E.390, 645F.292, 645F.293)

     1.  Any material change in the management or principal employees of a mortgage banker at its principal office or a branch office must be reported to the Commissioner not later than 30 calendar days after the change.

     2.  Any material change in the ownership or any change of control of a mortgage broker at his or her principal office or a branch office must be approved by the Commissioner. An application for approval of a change of ownership or a change of control must be submitted to the Commissioner on a form prescribed by the Division not later than 30 days before the proposed change.

     3.  If a person acquires stock or ownership in a mortgage banker as a result of a transfer that constitutes a change of control:

     (a) A financial statement or personal interrogatory of the prospective owner, partner, corporate shareholder, manager or employee must be submitted to the Commissioner for his or her consideration;

 

     (b) The person may not participate in the management of the mortgage banker until the Commissioner has approved the transfer; and

     (c) The mortgage banker may not change the location of its principal office or a branch office until the Commissioner has approved the transfer.

     4.  A mortgage banker may not close his or her principal office or a branch office until:

     (a) The mortgage banker has returned his or her license to the Division; and

     (b) The Commissioner has approved the closure. 

     5.  The request for approval of the closure of the principal office of the mortgage banker 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 banker and the plan for distribution of money in the account;

     (c) If any mortgage agent associated with or employed by the mortgage banker terminates his or her association pursuant to NRS 645E.292, evidence of the termination; and

     (d) In regard to the records of the mortgage banker maintained pursuant to subsection 1 of NRS 645E.350:

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

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

     6.  The Commissioner may require the person acquiring stock or ownership in a mortgage banker pursuant to subsection 3 to meet the requirements of the S.A.F.E. Mortgage Licensing Act, including, without limitation, submitting information to the Registry.

     7.  As used in this section, “change of control” has the meaning ascribed to it in NRS 645E.390.

     (Added to NAC by Comm’r of Financial Institutions by R046-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R088-04, 8-25-2004; R053-08, 4-23-2009; R038-10, 7-22-2010)—(Substituted in revision for NAC 645E.230)

      NAC 645E.320  Fee for supervision and related activities: Amount; collection; failure to pay; accounting of time billed. (NRS 645E.300, 645E.310, 645F.280)

     1.  Except as otherwise provided in this subsection, the Commissioner will charge and collect a fee of $60 per hour from each mortgage banker for any supervision, examination, audit, investigation or hearing conducted pursuant to chapter 645E 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 645E of NRS.

     2.  The Commissioner will bill each mortgage banker upon the completion of the activity for the fee established in subsection 1. The fee must be paid not later than 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.

     3.  Upon written request by a mortgage banker, the Division will provide an accounting of the time billed to the mortgage banker pursuant to this section.

     (Added to NAC by Comm’r of Financial Institutions by R046-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R088-04, 8-25-2004; R038-10, 7-22-2010)

      NAC 645E.321  Grounds for denial of renewal of license. (NRS 645E.300, 645F.292, 645F.293)  As regards the renewal of a license pursuant to subsection 1 of NRS 645E.280, the Commissioner will not renew the license of a mortgage banker if the mortgage banker:

 

 

 

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

     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, including, without limitation, the S.A.F.E. Mortgage Licensing Act.

     (Added to NAC by Comm’r of Mortgage Lending by R038-10, eff. 7-22-2010)

      NAC 645E.323  Surety bonds. (NRS 645E.300, 645F.292, 645F.293)

     1.  A mortgage banker shall deposit with the Commissioner and keep in full force and effect a corporate surety bond payable to the State of Nevada which is in the amount set forth in this section and is executed by a corporate surety satisfactory to the Commissioner.

     2.  If a mortgage agent is an employee of, or is associated with, a mortgage banker subject to the provisions of chapter 645E of NRS, the surety bond of the mortgage banker may be used to fulfill the mortgage agent’s individual surety bond requirement pursuant to chapter 645B of NRS, if one exists, so long as the surety bond of the mortgage banker:

     (a) Expressly covers the mortgage agent as a principal; and

     (b) Names the mortgage banker as a principal and names all mortgage agents employed by or associated with the mortgage banker as principals, either by individual name or as a group, such as “All Employed or Associated Mortgage Agents.”

     3.  A bond deposited pursuant to this section must be in substantially the following form:

 

     Know All Persons by These Presents, that ...................., as principal, and ...................., as surety, are held and firmly bound unto the State of Nevada for the use and benefit of any person who suffers damages because of a violation of any provision of chapter 645B, 645E or 645F of NRS or any regulation adopted pursuant thereto, in the sum of ...................., lawful money of the United States, to be paid to the State of Nevada for such use and benefit, for which payment well and truly to be made, and that we bind ourselves, our heirs, executors, administrators, successors and assigns, jointly and severally, firmly by these presents.

 

     The condition of that obligation is such that:

 

     Whereas, the principal has been issued a license as a mortgage agent, mortgage broker or mortgage banker by the Commissioner of Mortgage Lending and is required to furnish a bond, which is conditioned as set forth in this bond:

 

     Now, therefore, if the principal, and the principal’s agents and employees, strictly, honestly and faithfully comply with the provisions of chapters 645B, 645E and 645F of NRS and any regulation adopted pursuant thereto, and pay all damages suffered by any person because of a violation of any provision of chapter 645B, 645E or 645F of NRS or any regulation adopted pursuant thereto or by reason of any fraud, dishonesty, misrepresentation or concealment of material facts growing out of any transaction governed by the provisions of chapter 645B, 645E or 645F of NRS or any regulation adopted pursuant thereto, then this obligation is void; otherwise it remains in full force.

 

     This bond becomes effective on the .......... (day) of .......... (month) of .......... (year), and remains in force until the surety is released from liability by the Commissioner of Mortgage Lending or until this bond is cancelled by the surety. The surety may cancel this bond and be relieved of further liability hereunder by giving 60 days’ written notice to the principal and to the Commissioner of Mortgage Lending.

 

     In Witness Whereof, the seal and signature of the principal hereto is affixed, and the corporate seal and the name of the surety hereto is affixed and attested by its authorized officers at ...................., Nevada, this .......... (day) of .......... (month) of .......... (year).

 

.................... (Seal)

     Principal

.................... (Seal)

     Surety

     By ....................

     Attorney-in-fact

....................

     Licensed registered agent

 

     4.  The required amount of the surety bond that complies with the provisions of this section is calculated by the Commissioner by determining the annual loan production amount for the person or persons covered under the bond and:

     (a) In the case of an initial surety bond, the expected annual loan production is determined by an estimate of the Commissioner; and

     (b) After the deposit of an initial surety bond, the expected annual loan production is based upon the annual loan production in the previous year.

     5.  The surety bond amounts will be set and adjusted as necessary annually by the Division in accordance with the following scale:

 

Annual Loan Production                          Bond Amount Required

$20,000,000 or less.................................. $50,000

Greater than $20,000,000........................ $75,000

 

     6.  The procedure regarding cancellation of a bond is as follows:

     (a) A surety may cancel a bond upon giving 60 days’ notice to the Commissioner by certified mail;

     (b) Upon receipt by the Commissioner of notice, the Commissioner will immediately notify the mortgage banker who deposited the bond:

          (1) Of the effective date of the cancellation; and

          (2) That the license of the mortgage banker will be revoked unless the mortgage banker furnishes an equivalent bond before the effective date of the cancellation;

     (c) The notification by the Commissioner must be sent to the mortgage banker by certified mail to the last address of record filed in the office of the Division; and

     (d) If the mortgage banker does not comply with any requirements set out in the notification from the Commissioner, the license of the mortgage banker must be revoked on the date the bond is cancelled.

     7.  Any person:

     (a) May claim against a bond by bringing an action in a court of competent jurisdiction on the bond for damages to the extent covered by the bond, but an action may not be commenced after the expiration of 3 years following the commission of the act on which the action is based; and

     (b) Who claims against a bond shall notify the Commissioner in writing by certified mail upon filing the action.

     8.  Upon receiving a request from a person for whose benefit a bond is required, the Commissioner will notify the person:

     (a) That a bond is in effect and the amount of the bond; and

     (b) If there is an action against the bond, of the title of, the court and case number of, and the amount sought in that action.

     9.  If a surety wishes to make payment without awaiting action by a court:

     (a) The amount of the bond must be reduced to the extent of any payment made by the surety in good faith under the bond; and

     (b) Any payment must be based on written claims received by the surety before any action is taken by a court.

     10.  A surety may bring an action for interpleader against all claimants upon the bond, and if the surety brings an action, the surety:

     (a) Shall publish notice of the action at least once each week for 2 weeks in every issue of a newspaper of general circulation in the county of the principal place of business of the mortgage banker; and

     (b) May deduct its costs of the action, including attorney’s fees and publication, from its liability under the bond.

     11.  Claims against a bond:

     (a) Have equal priority;

     (b) If the bond is insufficient to pay all claims in full, must be paid on a pro rata basis, but partial payment of claims is not full payment; and

     (c) Do not preclude a claimant from bringing an action against a mortgage banker for an unpaid balance.

     (Added to NAC by Comm’r of Mortgage Lending by R038-10, eff. 7-22-2010)

      NAC 645E.327  Submission of information or payment of fees by applicant or licensee. (NRS 645E.300, 645F.292, 645F.293)  When an applicant or licensee is required to submit information or pay fees to the Division, the Commissioner may:

     1.  Require the applicant or licensee to submit the information or pay the fees directly to the Division or to the Division through the Registry; and

     2.  Require the applicant or licensee to submit extra copies of the information, including, without limitation, a set of the applicant’s or licensee’s fingerprints and written consent to an investigation of his or her credit history.

     (Added to NAC by Comm’r of Mortgage Lending by R038-10, eff. 7-22-2010)

Examinations, Audits and Investigations

      NAC 645E.330  Assessment for costs related to audits and examinations. (NRS 645E.300, 645E.320)

     1.  Each mortgage banker 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 by the Division.

     2.  The Division will bill each mortgage banker 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 banker 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 by R046-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R088-04, 8-25-2004)

      NAC 645E.335  Authority of examiner, auditor or investigator. (NRS 645E.300)  An examiner, auditor or investigator conducting an examination, periodic or special audit, or investigation pursuant to paragraph (b), (c) or (d) of subsection 2 of NRS 645E.300 may:

     1.  Require the mortgage banker to produce, for the purposes of the examination, audit or investigation, all documents:

     (a) Relating to business conducted by the mortgage banker pursuant to this chapter or chapter 645E of NRS;

     (b) Required to be kept by the mortgage banker pursuant to any federal or state law or regulation; and

 

     (c) Related to the operation of the business of the mortgage banker or any affiliated business that conducts business activities which are directly related to the business of the mortgage banker.

     2.  Inspect and copy any documents that are in the possession, control or custody of the mortgage banker and related to business conducted by the mortgage banker pursuant to this chapter or chapter 645E of NRS.

     (Added to NAC by Comm’r of Mortgage Lending by R088-04, eff. 8-25-2004)

      NAC 645E.337  Proof of adverse change in financial condition. (NRS 645E.300)  For the purposes of paragraph (b) of subsection 4 of NRS 645E.300, an adverse change in financial condition:

     1.  Is not proven solely by a decrease in income from any previous period if the mortgage banker 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 R038-10, eff. 7-22-2010)

      NAC 645E.340  Rating of mortgage banker upon completion of examination. (NRS 645E.300)  Upon completion of an examination of a mortgage banker, the examiner shall rate the mortgage banker on a scale of “1” to “5,” as follows:

     1.  A rating of “1” indicates that the mortgage banker and the management of the mortgage banker 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 and the mortgage banker acted to correct the violation or deficiency immediately and the action taken by the mortgage banker is likely to prevent future violations or deficiencies.

     2.  A rating of “2” indicates that the mortgage banker and the management of the mortgage banker have demonstrated substantial compliance with applicable laws and regulations and that any violations or deficiencies noted in the report made by the examiner pursuant to NAC 645E.345 can be corrected by the mortgage banker with a minimum of regulatory supervision. A rating of “2” may be given if there are minor violations or deficiencies and the mortgage banker acted to correct the violations or deficiencies immediately and the action taken by the mortgage banker is likely to prevent future violations or deficiencies.

     3.  A rating of “3” indicates that the mortgage banker and the management of the mortgage banker 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 645E.345. A rating of “3” may be given if there were previous minor violations or deficiencies that were not corrected.

     4.  A rating of “4” indicates that the mortgage banker and the management of the mortgage banker 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 645E.345. The mortgage banker will be subject to close regulatory supervision and the examiner will recommend disciplinary action against the mortgage banker to the Commissioner.

     5.  A rating of “5” indicates that the mortgage banker and the management of the mortgage banker 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 645E.345 and may include action by the Commissioner to take possession of the business and assets of the mortgage banker. The examiner will recommend disciplinary action against the mortgage banker to the Commissioner.

     (Added to NAC by Comm’r of Mortgage Lending by R088-04, eff. 8-25-2004)

 

      NAC 645E.345  Results of examination: Preparation and review of draft report; final report; confidentiality; action by Commissioner. (NRS 645E.300, 645E.310, 645E.370)

     1.  Not more than 30 days after the completion of an examination of a mortgage banker, 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 banker that were examined by the examiner;

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

     (c) Conclusions and recommendations that are reasonably supported by the facts that are included in the report, including, but not limited to, the rating given to the mortgage banker by the examiner pursuant to NAC 645E.340.

     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 banker that was examined:

     (a) A copy of the draft report; and

     (b) Notice that the mortgage banker 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 banker received a rating of “3,” “4” or “5” on an examination pursuant to NAC 645E.340 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 banker could submit written comments or objections pursuant to subsection 2, hold an informal meeting with the mortgage banker regarding the draft report; and

     (b) Review the draft report, together with the written comments or objections submitted by the mortgage banker 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 banker 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 the completion of the reopened examination, the mortgage banker shall be responsible for the costs attributable to the reopened examination pursuant to NRS 645E.310.

     4.  If a mortgage banker:

     (a) Received a rating of “1” or “2” on an examination pursuant to NAC 645E.340 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 645E.370, 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 banker is operating in violation of this chapter, chapter 645E of NRS or a previous order of the Commissioner, the Commissioner may order the mortgage banker to take any action the Commissioner deems necessary or appropriate to correct the violation. The Commissioner may also take disciplinary action pursuant to NRS 645E.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 or her designee for an additional period of not more than 15 days.

     (Added to NAC by Comm’r of Mortgage Lending by R088-04, eff. 8-25-2004)

Records and Reports

      NAC 645E.350  Monthly reports. (NRS 645E.300, 645E.350)

     1.  Each mortgage banker shall submit, for each month, on a form approved by the Commissioner, a report on the volume of loans arranged by the mortgage banker in that month. 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.  The Commissioner may refuse to renew the license of a mortgage banker that has not submitted a monthly report as required by subsection 1 for 1 or more of the preceding 12 months.

     (Added to NAC by Comm’r of Financial Institutions by R046-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R088-04, 8-25-2004)

      NAC 645E.355  “Complete and suitable records” interpreted for purposes of NRS 645E.350. (NRS 645E.300, 645E.350)  As used in NRS 645E.350, the Commissioner interprets “complete and suitable records” to mean:

     1.  For residential mortgage loans, 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 the loan;

     (g) A credit report;

     (h) A good faith estimate of closing costs, including any additional estimates if there is a material change to the original estimate, and any disclosures required pursuant to the federal Truth in Lending Act, 15 U.S.C. §§ 1601 et seq.;

     (i) The Uniform Settlement Statement, as described pursuant to 12 U.S.C. § 2603;

     (j) 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;

     (k) A recorded or confirmed deed of trust;

     (l) The title insurance policy;

     (m) The note;

     (n) Any subsequent assignment of the loan to institutional investors;

     (o) The hazard insurance policy; and

     (p) Any additional disclosures required by state or federal law.

     2.  For commercial mortgage loans that are funded by the mortgage banker, a file that includes, if applicable, the items required pursuant to paragraphs (a) to (j), inclusive, of subsection 1.

     3.  Any additional books and records that must be maintained or readily accessible at each place of business of the mortgage banker, including, but not limited to:

     (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 banker, in the format in which the material was published or distributed;

     (c) A copy of any written complaint received by the mortgage banker, 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 banker;

     (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 banker;

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

     (g) Copies of all material correspondence related to the business of the mortgage banker, 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 banker 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 R088-04, eff. 8-25-2004; A by R053-08, 4-23-2009)

      NAC 645E.360  Retention and maintenance of certain records. (NRS 645E.300, 645E.350)

     1.  Each mortgage banker shall retain records of all its completed mortgage transactions for a period of at least 4 years after the date of the last activity relating to the transaction. Except as otherwise provided in this subsection, after a record has been retained for 1 year or longer, the mortgage banker may cause the original record to be reproduced by the microphotographic process, optical disc imaging or any other equivalent technique designed to ensure an accurate reproduction of the original record. The Commissioner may, for good cause, allow the mortgage banker to reproduce and store a record by electronic means at any time so long as the mortgage banker retains a hard copy that is accessible by the Commissioner for 1 year after the closing date of the loan. A record reproduced as authorized by this section must be considered by the Commissioner to be the same as the original record. Upon completion of the reproduction of a record as authorized by this section, the original record may be destroyed.

     2.  Each mortgage banker 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.  Each mortgage banker shall maintain records of completed mortgage transactions at the location at which the mortgage loan was made for at least 1 year after the date of closing of the loan. After expiration of the 1-year period required pursuant to this subsection, any such record may be maintained for the minimum period prescribed in subsection 1 at another location if the record can be provided not later than 24 hours after a request for the record. The Commissioner, for good cause shown, may allow a longer period to provide records.

     (Added to NAC by Comm’r of Financial Institutions by R046-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R088-04, 8-25-2004; R053-08, 4-23-2009)

APPRAISALS

      NAC 645E.400  Preparation of appraisal submitted to lender. (NRS 645E.300)  An appraisal submitted to a lender by a mortgage banker must meet, at a minimum, the standards set forth in the Uniform Standards of Professional Appraisal Practice adopted by reference pursuant to NAC 645C.400, must not be prepared by the mortgage banker and must:

     1.  If the appraised property is located in this State, be prepared by an appraiser who holds the appropriate license, certificate or permit issued by the Real Estate Division of the Department of Business and Industry; or

     2.  If the appraised property is located outside this State, be prepared by an appraiser who is authorized to perform the appraisal by the appropriate agency of the state in which the property is located.

     (Added to NAC by Comm’r of Financial Institutions by R046-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R088-04, 8-25-2004; R053-08, 4-23-2009)

ENFORCEMENT

      NAC 645E.500  Referral of certain suspected violations to and cooperation and sharing of information with federal and state agencies for investigation and action of certain suspected violations; grounds for disciplinary action. (NRS 645E.300, 645E.670, 645F.292, 645F.293)

     1.  The Commissioner may refer to and cooperate 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 645E.670, a mortgage banker commits a violation if the mortgage banker:

     (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 banker 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.  Nothing in this section shall be construed to prohibit a mortgage banker 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 R046-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R088-04, 8-25-2004; R053-08, 4-23-2009; R038-10, 7-22-2010)

      NAC 645E.505  Reporting of violations to Registry; procedure for challenging report. (NRS 645E.300, 645F.292, 645F.293)

     1.  The Division shall regularly report violations of this chapter and chapter 645E 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 R038-10, eff. 7-22-2010)

      NAC 645E.510  Orders to cease and desist from certain activities. (NRS 645E.300)

     1.  If a person engages in an activity in violation of the provisions of this chapter or chapter 645E 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 645E of NRS; or

     (b) In a manner that violates the provisions of this chapter or chapter 645E 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 645E 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 the 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 calendar days after the date the hearing is concluded.

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

     (Added to NAC by Comm’r of Financial Institutions by R046-00, eff. 9-5-2000)—(Substituted in revision for NAC 645E.300)

 

 

HEARINGS

      NAC 645E.515  Coordination and notice of time and location. (NRS 645E.300)  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 R070-08, eff. 4-23-2009)

      NAC 645E.520  Continuances. (NRS 645E.300)

     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 R070-08, eff. 4-23-2009)

      NAC 645E.525  Representation of respondent. (NRS 645E.300)  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 R070-08, eff. 4-23-2009)

      NAC 645E.530  Disclosure of exhibits and list of witnesses; limitations on discovery. (NRS 645E.300)

     1.  If a hearing has been requested pursuant to NRS 645E.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 R070-08, eff. 4-23-2009)

      NAC 645E.535  Motions. (NRS 645E.300)

     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 R070-08, eff. 4-23-2009)

 

      NAC 645E.540  Procedure. (NRS 645E.300)

     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 the witness 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 the respondent’s 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 R070-08, eff. 4-23-2009)

      NAC 645E.545  Burden and standard of proof. (NRS 645E.300)  The Division has the burden of proof in any hearing pursuant to this chapter. The standard of proof in such a hearing is substantial evidence.

     (Added to NAC by Comm’r of Mortgage Lending by R070-08, eff. 4-23-2009)

      NAC 645E.550  Rules of evidence; informality of proceedings. (NRS 645E.300)

     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 R070-08, eff. 4-23-2009)

      NAC 645E.555  Decision of hearing officer. (NRS 645E.300)  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 R070-08, eff. 4-23-2009)

      NAC 645E.560  Posthearing motions. (NRS 645E.300)

     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 R070-08, eff. 4-23-2009)

      NAC 645E.565  Informal disposition of contested cases; consent and settlement agreements. (NRS 645E.300)

     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 R070-08, eff. 4-23-2009)

      NAC 645E.570  Immunity from civil liability. (NRS 645E.300)

     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 R070-08, eff. 4-23-2009)