Subchapter 03M – Mortgage lending

 

SECTION .0100 – GENERAL

 

04 NCAC 03M .0101        DEFINITIONS

As used in this Subchapter, unless a contrary definition is provided or required by the context:

(1)           Terms used in this Subchapter which are defined in the Act have the same meaning as set forth in the Act.

(2)           When any term in this Subchapter is defined by reference to or incorporation of a regulation or rule of a federal or state agency, board, commission or other regulatory body other than the Commissioner, the reference shall be deemed to be to the regulation or rule as it is in effect and interpreted in its most current version.

(3)           "Act" means Article 19B of Chapter 53 of the North Carolina General Statutes, commonly known as the "North Carolina Secure and Fair Enforcement (S.A.F.E.) Mortgage Licensing Act," or "NC SAFE Act."

(4)           "Advertisement" means material used or intended to be used to induce the public to apply for a mortgage loan.  The term includes any printed or published material, or descriptive literature concerning a mortgage loan to be solicited, processed, negotiated or funded by a licensee or exempt entity whether disseminated by direct mail, newspaper, magazine, radio or television broadcast, electronic mail or other electronic means, billboard or similar display.  The term does not include any disclosures, program descriptions, or other materials prepared or authorized by any state or federal government agency, nor does the term include any material or communication which has been excluded for purposes of any regulation of the Board of Governors of the Federal Reserve System regulating consumer credit disclosures.

(5)           "Call Report" means a report of condition on a company and its operations which includes financial and loan activity information.

(6)           "Commission" means the North Carolina Banking Commission.  For purposes of complying with these Rules by credit unions, Banking Commission means the North Carolina Credit Union Commission.

(7)           "Controlling person" means a person who, with regard to a licensee:

(a)           has the ability to exercise "control", as the term is defined in G.S. 53-244.030(7), or

(b)           otherwise has the power to direct the management and policy of the licensee.

(8)           "Instructor" means an individual who is employed by a provider and who is responsible for teaching a program.

(9)           "License" means a mortgage lender, mortgage servicer, mortgage broker, exclusive mortgage broker, or mortgage loan originator license issued pursuant to the Act and this Subchapter. 

(10)         "Material" when used in connection with facts or information provided to the Commissioner by a licensee or applicant, means facts or information that a reasonable person knows, or should know, would be likely to influence a decision to grant, suspend, condition, limit, renew, or revoke a license or to take other disciplinary action against a licensee or exempt person, including:

(a)           notice of a pending administrative action involving the licensee or applicant for licensure by any state or federal authority to which the licensee is subject;

(b)           the issuance of an administrative order against the licensee or applicant for licensure by any state or federal authority to which the licensee is subject;

(c)           notice of a pending criminal charge against the licensee or applicant for actions related to financial services or moral turpitude;

(d)           the entry of a conviction or one of the following on a criminal charge against the licensee or applicant for licensure for a felony or other criminal charge for actions related to financial services or moral turpitude:

(i)            plea of guilty;

(ii)           plea of no contest or nolo contendere;

(iii)          prayer for judgment continued;

(iv)          deferred prosecution agreement;

(v)           an adjudication or verdict of guilty by a domestic, foreign, military, or other court of competent jurisdiction;

(vi)          the equivalent of any of the foregoing in a domestic, foreign, military, or other court of competent jurisdiction; or

(vii)         any other classification that is deemed a conviction pursuant to the  applicable law  in the jurisdiction where the criminal charge was brought.

(e)           a change in status to the licensee's bond, including the reduction or cancellation of such bond; and

(11)         "Material" when used in connection with facts or information provided to the Commissioner, by a licensee or applicant for licensure, also means facts and information  regarding the licensee's identity and contact information, including:

(a)           the licensee's primary phone number, mailing address, and principal office address;

(b)           any assumed name, trade name, or d/b/a (doing business as) under which the licensee may be operating;

(c)           the address at which files or documents retained pursuant to the Act or the rules in this Subchapter are stored;

(d)           the identity of the licensee's bonding company or carrier, and bond number;

(e)           for corporate licensees, the identity of any affiliated mortgage lender, mortgage broker, mortgage servicer, or provider of settlement services; and

(f)            for corporate licensees, the identity of the licensee's owners, officers, directors, qualifying individual, branch manager(s), or control persons.

(12)         "Material" when used in connection with facts or information provided to a borrower, means facts or information that a reasonable person knows, or should know, would reasonably be expected to influence a borrower's decision with regard to one or more loans, including:

(a)           the total compensation the mortgage broker expects to receive from all sources in connection with each loan option presented to the borrower;

(b)           the terms of each loan option presented to the borrower;

(c)           the anticipated monthly payment (including property tax and insurance payments) for each loan option presented to the borrower;

(d)           if the loan contains a variable rate feature or other terms which may result in a change to the borrower's monthly payments over the life of the loan, the circumstances upon which the terms or payments will change and the impact of the changes upon the borrower's required monthly payments; and

(e)           any affiliate relationships that may exist between the licensee and any party or parties to the sale or financing of the subject property, or any provider of settlement services.

(13)         "Material" when used in connection with the word "change" or "changes," means a change to any material facts or information.

(14)         "Nationwide Mortgage Licensing System and Registry" or "NMLS&R" has the same meaning as in the NC SAFE Act.

(15)         "Prelicensing Education" means a classroom or classroom equivalent education program required by G.S. 53-244.070.

(16)         "Program" means a prelicensing program.

(17)         "Provider" means any person who provides a program.

(18)         "Qualified Written Test" means the mortgage prelicensing qualified written test required by G.S. 53-244.080.

(19)         "Settlement Services" has the same meaning as defined in federal Real Estate Procedures Act (RESPA) 12 U.S.C. Sec. 2601 et. seq. Regulation X, 24 C.F.R. Part 3500 et. seq.

(20)         "Testing Provider" means an organization approved by the NMLS&R to administer the qualified written test.

 

History Note:        Authority G.S. 53-244.118;

Temporary Adoption Eff. July 1, 2002;

Eff. April 1, 2003;

Amended Eff. July 1, 2010; July 18, 2008.