Lender, broker, and servicer MCR quarterly reporting:

Q1 data (January 1- March 31) is due May 15***

Q2 data (April 1 – June 30) is due August 14

Q3 data (July 1 – September 30) is due November 14

Q4 data (October 1 – December 31) is due February 14

*** The Mortgage Call Report Form Version 6 (MCR FV6) will be released into production in March 2024. Given this update, the Commissioner of Banks has approved a 30-day extension to the above due date for filing of the Q1 MCR.

Financial Reporting

Mortgage lender, broker, and servicer fiscal year-end financial statement reporting

Financial statements must be uploaded to the NMLS Financial Statement Summary screen in accordance with North Carolina General Statutes §§ 53-244.108, 53-244.104(a), 53-244.115(d)(3), and the North Carolina Administrative Code 04 NCAC 03M.0401.  If not uploaded within 90 days of the end of the licensee's fiscal year (MARCH 31^st for most companies), the company’s license status will be set to approved-deficient and a license item will be placed in NMLS.  Please note, failure to report, or meet minimal requirements, may result in summary suspension of the license under public order.

Mortgage broker verification of deposit within 90 days of the end of the calendar year

Pursuant to North Carolina General Statute § 53-244.108 and the North Carolina Administrative Code 04 NCAC 03M .0205 and 04 NCAC 03M.0401(a) mortgage brokers, as part of annual reporting requirements, must provide certification from the company's insured financial institution that an account in the company’s name exists and the company has maintained a continual daily balance of $10,000 or more for the previous year (or since the time of licensure if licensed under 12 months).

The verification of deposit (VOD) must be prepared and sent to our office by the insured financial institution, which can be printed from our website (FORM MLA17). The licensee should provide the VOD form to the financial institution and have the institution return it to us via email at [email protected], or by fax at 919-733-6918. If the financial institution is unable to complete the VOD, the company may provide, through a secure email, fax, or upload to the company documents section on NCCOB Online, the company’s most recent 12-months bank statements (or bank statements since the time of licensure if under 12 months).

If not uploaded by the MARCH 31^st due date, the company’s license status will be set to approved-deficient and a license item will be placed in NMLS.  Please note that failure to report, or meet minimum requirements, may result in summary suspension of the license under public order.

Register Now!

Tuesday, June 6, 2023
10:30 am - 12:30 pm EST

The Office of the Commissioner of Banks will review the North Carolina Secure and Fair Enforcement Mortgage Licensing Act focusing on mortgage brokers and discussing common violations cited during examinations. Registration is limited to 50 participants and only two participants per company. Future training sessions will be offered.

Contract Mortgage Loan Originator

The North Carolina Secure and Fair Enforcement Mortgage Licensing Act does not permit a mortgage loan originator to be a contract worker paid through IRS Form 1099.

North Carolina General Statute (N.C.G.S.) § 53-244.040(a) states it is unlawful for any person, other than an exempt person or a person licensed as a transitional mortgage loan originator, to act as a mortgage loan originator without a mortgage loan originator license. A mortgage loan originator license authorizes an individual who is employed by a North Carolina licensee to conduct the business of a mortgage loan originator. Further, N.C.G.S. § 53-244.100(b) states a mortgage loan originator license is not effective during any period when that person is not employed by a mortgage lender or mortgage broker licensed under this Article.

N.C.G.S. § 53-244.030(10) defines an employee as an individual who has an employment relationship with a licensee and who is treated as a common law employee for purposes of compliance with the federal income tax laws and whose income is reported on IRS Form W-2.

Mortgage Broker Compensation Disclosure

North Carolina General Statute § 53-244.109(5) requires a mortgage broker to timely and clearly disclose to the borrower material information that may be expected to influence the borrower's decision and is reasonably accessible to the mortgage broker, including total compensation the mortgage broker expects to receive from any and all sources in connection with each loan option presented to the borrower.

The North Carolina Office of the Commissioner of Banks provides a model form, MLA 18, that may be used to meet the above disclosure requirements. Form MLA 18 was recently updated and available here: https://nccob.nc.gov/financial-institutions/mortgage/mortgage-forms-and-fees.

Security Breaches --- Reporting Requirements

Title 4, Chapter 3M, Section .0402 of the North Carolina Administrative Code, requires companies licensed under the North Carolina Secure and Fair Enforcement Mortgage Licensing Act to provide to the Commissioner, within one business day, a copy of any notification required by North Carolina General Statutes (N.C.G.S.) § 75-65.

“Any notification” includes a complete copy of the notice filed with the Consumer Protection Division of the Attorney General's Office, and a sample copy of the notice provided to consumers. Notification to our office must be submitted through the Nationwide Multistate Licensing System & Registry (NMLS) using document upload type "Business Continuity Operational Status Report". Consumer personal identifying information should not be submitted to NMLS.

See N.C.G.S. § 75-61(14) to determine if an incident is a “security breach” and N.C.G.S. § 75-65 for specific security breach notification requirements.

Attention Servicers – Mortgage Payment Assistance – Loss Mitigation

North Carolina homeowners experiencing financial difficulties due to the coronavirus pandemic, may have access to payment assistance.  Funds are available through the North Carolina Housing Finance Agency to assist with delinquency, default, and foreclosure. 

Servicers are encouraged to visit https://www.nchfa.com/ to learn more about the North Carolina Homeowner Assistance Fund and communicate this information as part of loss mitigation efforts.

Servicers of FHA loans are reminded that under HUD Mortgagee Letter 2021-18, they must inform impacted consumers of the availability of funds under the HAF program.

!ATTENTION REQUIRED!

North Carolina’s Assumed Business Name Act (ACT) has changed.  Any certificate of assumed named registered BEFORE December 1, 2017, will expire on December 1, 2022.  If you desire to continue using an assumed name, you must register a new Certificate of Assumed Name and pay the $26 fee BEFORE the expiration date.  Once expired, the assumed name cannot be used until a new certificate is filed in accordance with NCGS, Chapter 66, Article 14A. Click the link above for a fillable version of the certificate. 

For more information, click this link to review the full statute (NCGS, Chapter 66, Article 14A).  The NC Secretary of State’s office is responsible for implementing the new registry of assumed names.  The following link provides information and frequently asked questions about the ACT: NC Secretary of State - Assumed Business Names

If you have questions, please contact Business Link North Carolina at [email protected] or 800-228-8443.

The North Carolina Office of the Commissioner of Banks has been advised that the IT systems of SolarWinds Inc. (“SolarWinds”), an American company that develops software for businesses to help manage their networks, systems, and IT infrastructure, were recently compromised.  The specific product targeted in this attack is SolarWinds’ Orion IT monitoring and management software.  Subsequent to this breach, malicious tampering with SolarWinds IT monitoring and management products appears to have been spread through software updates to its customers around the globe, including significant financial sector organizations, vendors, and service providers.

Please ensure the IT officer in your organization is taking steps to evaluate any impact. The North Carolina Office of the Commissioner of Banks reminds mortgage licensees and registrants, if a security breach has occurred as defined by N.C.G.S. § 75-61(14), notifications to the Commissioner should be provided pursuant to 04 NCAC 03.0402 and  04 NCAC 03M.0102.

The North Carolina Office of the Commissioner of Banks (NCCOB) issues this bulletin to remind all lenders and brokers that the Real Estate Settlement Procedures Act (RESPA) prohibits kickbacks and referral fees and describes the risks posed by entering into marketing services agreements (MSAs). 

Section 8(a) of RESPA prohibits the giving or accepting of “any fee, kickback or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person.”  RESPA does not include a de minimis amount of value, so costs considered nominal are not excludable from this regulation.

The Consumer Financial Protection Bureau issued the below Frequently Asked Questions (FAQs) discussing RESPA and Regulation X compliance and Marketing Services Agreements, and the NCCOB encourages its licensees to review the FAQs to ensure compliance with RESPA and any MSAs with providers, including but not limited to real estate agents or brokers.

https://www.consumerfinance.gov/policy-compliance/guidance/mortgage-resources/real-estate-settlement-procedures-act/real-estate-settlement-procedures-act-faqs/

**post amended to reflect the October 7, 2020 rescission by the CFPB of the 2015-05 Compliance Bulletin.

The pandemic has renewed conversations about remote work in the Mortgage Industry.  Although N.C. General Statute §§ 53-244.030(4) and (26) do not allow a principal office or branch office to be located at an individual’s home or residence, they do not prohibit a mortgage loan originator from working remotely.  However, licensees are reminded that business records and files must be maintained at a principal office or licensed branch.  The licensee, and its employees, remain responsible for safeguarding all consumer information and ensuring effective oversight of business activities.

All mortgage licensees and registrants must request renewal through the Nationwide Multistate Licensing System & Registry (NMLS) between November 1, 2020 and December 31, 2020, if they wish to retain their license to conduct business in North Carolina through 2021. 

Leading up to renewal, licensees should review their NMLS record to ensure there are no outstanding license items.  Mortgage Loan Originators (MLOs) must complete eight (8) hours of continuing education and should review their fingerprint expiration date on the NMLS Composite View screen.  Fingerprints expire after three (3) years. 

During the renewal request, MLOs will need to authorize a new credit report and criminal background check.  NMLS can use the existing fingerprints on file if they are not expired.  FBI regulations require individuals to provide new fingerprints when requesting a new criminal background check if previously submitted fingerprints are more than three (3) years old.  Since there may be pandemic-related delays, MLOs should take action as soon as possible to update fingerprints if they will be expiring prior to their renewal request.  If expired fingerprints are on file, a renewal request CANNOT be submitted through the NMLS system by North Carolina MLOs.

****The North Carolina Office of the Commissioner of Banks is issuing a correction regarding timeline extensions for reporting. The MCR Q1 2020 and NCCOB Online Mortgage Data Upload reports are extended from May 15, 2020 to JUNE 14, 2020.***

The North Carolina Office of the Commissioner of Banks (NCCOB) recognizes the serious impact the COVID-19 pandemic is having on consumers and the operations of many licensees. To provide flexibility with administrative burdens, the NCCOB is extending the 2020 Q1 reporting deadlines for regulated mortgage entities that cannot meet the original deadlines for the following reports:

• MCR Q1 2020 report is extended from May 15, 2020 to June 14, 2020
• MCR Standard Financial Condition and Financial Statement deadlines are  extended from 90 days from the end of the company’s fiscal year to 120 days from the end of the company’s fiscal year
• NCCOB Online Mortgage Data Upload is extended from May 15, 2020 to June 14, 2020

License items in the Nationwide Multistate Licensing System (NMLS) will be updated to reflect these extensions. The NCCOB encourages licensees to meet the reporting deadlines whenever possible.

Temporary Authority to Operate is part of a new section added to the federal SAFE Act by the passage of the Economic Growth, Regulatory Relief and Consumer Protection Act (12 USC § 5117).  The new provision streamlines the license application process for federally registered mortgage loan originators (MLOs) seeking state licensure and state-licensed MLOs seeking licensure in another state.  It will allow qualified MLOs who are changing employment temporary authority to originate loans while completing certain state-specific requirements. Temporary Authority to Operate takes effect November 24, 2019. With this change, North Carolina will continue to offer transitional MLO licenses in limited circumstances.  For additional information on the MLO qualifications and other specifications of the provision, please visit the following link to the Nationwide Multistate Licensing System & Registry Resource Center:  https://nationwidelicensingsystem.org/slr/common/Pages/Temporary-Authority-to-Operate.aspx