Attorney Malik Ahmad is admitted to Supreme Court of Nevada, and outlines the basic laws governing loan modification, mortgagor/mortgagee and other related issues. This is in fact the law without any commentary. Everything is prima facie in this outline. This is in continuation of educating Nevada and Las Vegas communities, in their quest to modify their loans. Because of an insurmountable people, agencies, and companies involved in this endless pursuit, the Nevadan needs to know, if these companies who are calling and soliciting their businesses, are in fact genuine, and are complying Nevada laws.
[Rev. 10/5/2007 10:49:58 AM]
CHAPTER 645B – MORTGAGE BROKERS AND MORTGAGE AGENTS
GENERAL PROVISIONS
NRS 645B.010 Definitions.
NRS 645B.0105 “Commissioner” defined.
NRS 645B.0107 “Construction control” defined.
NRS 645B.0109 “Depository financial institution” defined.
NRS 645B.0111 “Division” defined.
NRS 645B.0113 “Escrow agency” defined.
NRS 645B.0115 “Escrow agent” defined.
NRS 645B.0117 “Escrow officer” defined.
NRS 645B.0119 “Financial services license or registration” defined.
NRS 645B.0121 “Investor” defined.
NRS 645B.0123 “Licensee” defined.
NRS 645B.0125 “Mortgage agent” defined.
NRS 645B.0127 “Mortgage broker” defined.
NRS 645B.0129 “Policy of title insurance” defined.
NRS 645B.01305 “Private investor” defined.
NRS 645B.0131 “Relative” defined.
NRS 645B.0133 “Title agent” defined.
NRS 645B.0135 “Title insurer” defined.
NRS 645B.0137 Requirements before initial licensing for mortgage brokers and mortgage agents. [Effective July 1, 2008.]
NRS 645B.0138 Courses of continuing education: Adoption of regulations by Commissioner. [Effective July 1, 2008.]
NRS 645B.0145 Statutory and common-law rights, remedies and punishments unaffected; limitation on actions against State and its officers and employees.
EXEMPTIONS
NRS 645B.015 Exemptions for certain persons and entities.
NRS 645B.016 Certificate of exemption required for certain persons and entities; application; fee; automatic expiration; prohibitions; administrative fine.
NRS 645B.018 Exemptions for certain loans; application; grounds for granting exemption; powers and duties of Commissioner.
LICENSING OF MORTGAGE BROKERS
NRS 645B.020 Application for license; application for branch offices; requirements for issuance of license.
NRS 645B.021 Mortgage broker who is not natural person to designate natural person as qualified employee; regulations. [Effective July 1, 2008.]
NRS 645B.023 Payment of child support: Submission of certain information by applicant; grounds for denial of license; duty of Commissioner. [Effective until the date of the repeal of the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings.]
NRS 645B.023 Payment of child support: Submission of certain information by applicant; grounds for denial of license; duty of Commissioner. [Effective on the date of the repeal of the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings and expires by limitation 2 years after that date.]
NRS 645B.0243 Grounds for denial of license: Employing or associating with certain persons who are ineligible to be mortgage agents.
NRS 645B.0245 Grounds for denial of license: Control by relative who would be ineligible to be licensed; act or omission of partner, officer or director.
NRS 645B.0247 Grounds for denial of license: Authority of Commissioner not limited.
NRS 645B.025 Posting of license; restrictions on transfer or assignment of license.
NRS 645B.035 Activities authorized by license; dual licensure as mortgage banker and mortgage broker.
EXPIRATION AND RENEWAL OF BROKER’S LICENSE OR CERTIFICATE OF EXEMPTION; FEES
NRS 645B.050 Annual expiration of license or certificate of exemption; procedure for renewal; fees.
NRS 645B.051 Continuing education required for renewal of license. [Effective through June 30, 2008.]
NRS 645B.051 Continuing education required for renewal of license. [Effective July 1, 2008.]
SUPERVISION BY COMMISSIONER
General Provisions
NRS 645B.060 Duties of Commissioner: Regulations; investigations; annual examinations; periodic and special audits; hearings; related fees; biennial examinations.
NRS 645B.070 Subpoenas; oaths; examination of witnesses; penalty; assessment of costs.
NRS 645B.075 Payment of statutory assessment by mortgage broker; duty of mortgage broker and agents to cooperate fully with audits and examinations.
Records and Financial Statements
NRS 645B.080 Records relating to mortgage transactions, financial condition and trust accounts; monthly report to Commissioner; accounting procedures for trust accounts; regulations.
NRS 645B.085 Annual financial statement; audit of trust accounts; regulations.
NRS 645B.090 Records of Commissioner: General provisions governing public inspection, confidentiality and disclosure of information relating to investigations and disciplinary action.
NRS 645B.092 Records of Commissioner: Certain records relating to investigation deemed confidential; certain records relating to disciplinary action and orders imposing discipline deemed public records.
Commingling Money
NRS 645B.093 Commingling certain money prohibited.
Transfer of Stock
NRS 645B.095 Notification of certain transfers required; application to Commissioner for approval of change of control; investigation; waiver.
Net Worth
NRS 645B.115 Minimum net worth required for certain mortgage brokers; initial and annual determination of net worth; examination by Commissioner; regulations.
ESCROW AND TRUST ACCOUNTS
NRS 645B.165 Escrow account required for fee, salary, deposit or money paid in advance; release from escrow; exceptions; refunds; penalty.
NRS 645B.170 Trust account required for money deposited to pay taxes or insurance premiums; fiduciary duty of mortgage broker; accounting to debtor and Commissioner; additional duties and prohibitions.
NRS 645B.175 Trust or escrow account required for money received from investor to fund loan; trust or escrow account required for money received from debtor to repay loan; release of money; accounting to investor, debtor and Commissioner; additional conditions, limitations and prohibitions.
NRS 645B.180 Limitations on execution or attachment of money in trust account; commingling of money prohibited.
DISCLOSURES AND ADVERTISING
NRS 645B.185 Use of disclosure forms required; release of financial statements; duties of mortgage broker and agents; prohibitions; powers of Commissioner; regulations.
NRS 645B.186 Disclosure of certain business and personal relationships required.
NRS 645B.187 Prohibition on making certain guarantees in advertisements and solicitations; limitations on payment of premium interest; penalty.
NRS 645B.189 Statements of disclosure required in certain advertisements; review of advertisements by Commissioner; advertisements must comply with state and federal laws concerning deceptive trade practices and deceptive advertising; regulations.
NRS 645B.196 Liability of advertising spokesperson for mortgage broker for certain damages.
LOAN PAYMENTS AND DEFAULTS
NRS 645B.240 Limitations on charging late fee, additional amount of interest or other penalty.
NRS 645B.250 Prohibition on advancing payments to investor on behalf of debtor in default; exceptions.
NRS 645B.260 Monthly report to Commissioner on delinquencies in payments and defaults; monthly notice to investors; regulations.
CONDITIONS AND LIMITATIONS ON CERTAIN MORTGAGE TRANSACTIONS
NRS 645B.300 Written appraisal of real property required; persons authorized to perform appraisal; retention and inspection of appraisal; exceptions.
NRS 645B.305 Requirement that fee for servicing loan be specified in loan.
NRS 645B.310 Requirements for mortgage broker to assign interest in loan.
NRS 645B.320 Copy of recorded deed of trust must be mailed to each investor.
NRS 645B.330 Limitations on use of power of attorney.
LICENSING AND REGULATION OF MORTGAGE AGENTS
NRS 645B.400 License required.
NRS 645B.410 Qualifications and procedure for issuance of license; fees.
NRS 645B.420 Payment of child support: Submission of certain information by applicant; grounds for denial of license; duty of Commissioner. [Effective until the date of the repeal of the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings.]
NRS 645B.420 Payment of child support: Submission of certain information by applicant; grounds for denial of license; duty of Commissioner. [Effective on the date of the repeal of the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings and expires by limitation 2 years after that date.]
NRS 645B.430 Annual expiration of license; procedure for renewal; continuing education; fees.
NRS 645B.450 Conditions and limitations regarding employment of or association with mortgage agent; duties of mortgage broker upon termination of mortgage agent.
NRS 645B.455 License issued on behalf of professional corporation or limited-liability company; limitations on license; automatic expiration of license.
NRS 645B.460 Supervision by mortgage broker; requirements; regulations.
RIGHTS OF BROKERS AND AGENTS DURING MILITARY SERVICE
NRS 645B.490 Right to be placed on inactive status; procedure for reinstatement.
INVESTIGATION OF VIOLATIONS AND UNSAFE PRACTICES; REMEDIAL ACTION
NRS 645B.600 Person may file complaint alleging violation; requirements.
NRS 645B.610 Duties of Commissioner when complaint is filed.
NRS 645B.620 Duties of Commissioner when violation is suspected; referral of violations to Attorney General for criminal prosecution; civil action for injunctive relief.
NRS 645B.630 Duties of Commissioner when unsafe condition or practice is suspected; seizure of property and assets of mortgage broker; duties of Attorney General.
NRS 645B.640 Persons entitled to correct unsafe conditions and practices; effect of failure to correct; receivership and liquidation of assets.
DISCIPLINARY ACTION
NRS 645B.670 Authorized disciplinary action; grounds for disciplinary action.
NRS 645B.680 Suspension of license for failure to pay child support or comply with certain subpoenas or warrants; reinstatement of license. [Effective until 2 years after the date of the repeal of the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings.]
NRS 645B.690 Duty of Commissioner to take disciplinary action for certain violations.
NRS 645B.700 Categorization of major and minor violations; regulations.
NRS 645B.710 Act or omission of partner, officer or director deemed act or omission of partnership, corporation or unincorporated association.
NRS 645B.720 Authority of Commissioner to order summary suspension of license and take other action to protect public before conducting hearing.
HEARINGS; APPEALS
NRS 645B.750 Duty of Commissioner to provide written notice of disciplinary action or denial of license; right to administrative hearing; entry of final order; appeals.
NRS 645B.760 Effect of failure to appear at hearing; penalty.
ENFORCEMENT BY ATTORNEY GENERAL
NRS 645B.800 Attorney General has primary criminal jurisdiction; duty to provide Attorney General with information to assist prosecution; penalty.
NRS 645B.810 Attorney General may bring civil action; recovery of costs in civil action.
ADVISORY COUNCIL ON MORTGAGE INVESTMENTS AND MORTGAGE LENDING
NRS 645B.860 Creation; members; appointment; terms and vacancies; no compensation or per diem allowance; protections afforded members who are public officers or employees.
NRS 645B.865 Chairman and Vice Chairman; meetings; quorum; subcommittees.
NRS 645B.870 Purpose.
UNLAWFUL ACTS; PENALTIES
NRS 645B.900 Unlawful to conduct business of mortgage broker or mortgage agent without being licensed or exempt from licensing.
NRS 645B.910 Unlawful for foreign corporation, association or business trust to conduct business of mortgage broker without meeting certain requirements.
NRS 645B.950 Penalties for general violations.
NRS 645B.960 Penalties for violations relating to escrow or trust accounts.
_________
GENERAL PROVISIONS
NRS 645B.010 Definitions. As used in this chapter, unless the context otherwise requires, the words and terms defined in NRS 645B.0105 to 645B.0135, inclusive, have the meanings ascribed to them in those sections.
(Added to NRS by 1973, 1536; A 1975, 961; 1977, 1635; 1981, 1785; 1983, 1378, 1700; 1985, 2186; 1987, 498, 1876; 1989, 965; 1995, 1097; 1999, 3779; 2001, 2464; 2003, 3546)
NRS 645B.0105 “Commissioner” defined. “Commissioner” means the Commissioner of Mortgage Lending.
(Added to NRS by 1999, 3765; A 2003, 3546)
NRS 645B.0107 “Construction control” defined. “Construction control” has the meaning ascribed to it in NRS 627.050.
(Added to NRS by 1999, 3765)
NRS 645B.0109 “Depository financial institution” defined. “Depository financial institution” means a bank, savings and loan association, thrift company or credit union.
(Added to NRS by 1999, 3765)
NRS 645B.0111 “Division” defined. “Division” means the Division of Mortgage Lending of the Department of Business and Industry.
(Added to NRS by 1999, 3765; A 2003, 3546)
NRS 645B.0113 “Escrow agency” defined. “Escrow agency” has the meaning ascribed to it in NRS 645A.010.
(Added to NRS by 1999, 3765)
NRS 645B.0115 “Escrow agent” defined. “Escrow agent” has the meaning ascribed to it in NRS 645A.010.
(Added to NRS by 1999, 3765)
NRS 645B.0117 “Escrow officer” defined. “Escrow officer” has the meaning ascribed to it in NRS 692A.028.
(Added to NRS by 1999, 3765)
NRS 645B.0119 “Financial services license or registration” defined. “Financial services license or registration” means any license or registration issued in this State or any other state, district or territory of the United States that authorizes the person who holds the license or registration to engage in any business or activity described in the provisions of this chapter, title 55 or 56 of NRS or chapter 604A, 645, 645A, 645C, 645E, 645G or 649 of NRS.
(Added to NRS by 1999, 3765; A 2005, 1712)
NRS 645B.0121 “Investor” defined. “Investor” means a person who wants to acquire or who acquires ownership of or a beneficial interest in a loan secured by a lien on real property.
(Added to NRS by 1999, 3765)
NRS 645B.0123 “Licensee” defined. “Licensee” means a person who is licensed as a mortgage broker pursuant to this chapter. The term does not include a person issued a license as a mortgage agent pursuant to NRS 645B.410.
(Added to NRS by 1999, 3765; A 2003, 3546)
NRS 645B.0125 “Mortgage agent” defined.
1. “Mortgage agent” means a natural person who:
(a) Is an employee or independent contractor of a mortgage broker who is required to be licensed pursuant to this chapter; and
(b) Is authorized by the mortgage broker to engage in, on behalf of the mortgage broker, any activity that would require the person, if he were not an employee or independent contractor of the mortgage broker, to be licensed as a mortgage broker pursuant to this chapter.
2. The term does not include a person who:
(a) Is licensed as a mortgage broker;
(b) Is a general partner, officer or director of a mortgage broker; or
(c) Performs only clerical or ministerial tasks for a mortgage broker.
(Added to NRS by 1999, 3765)
NRS 645B.0127 “Mortgage broker” defined.
1. “Mortgage broker” means a person who, directly or indirectly:
(a) Holds himself out for hire to serve as an agent for any person in an attempt to obtain a loan which will be secured by a lien on real property;
(b) Holds himself out for hire to serve as an agent for any person who has money to lend, if the loan is or will be secured by a lien on real property;
(c) Holds himself out as being able to make loans secured by liens on real property;
(d) Holds himself out as being able to buy or sell notes secured by liens on real property; or
(e) Offers for sale in this State any security which is exempt from registration under state or federal law and purports to make investments in promissory notes secured by liens on real property.
2. The term does not include a person who is licensed as a mortgage banker, as defined in NRS 645E.100, unless the person is also licensed as a mortgage broker pursuant to this chapter.
(Added to NRS by 1999, 3765; A 2003, 3546)
NRS 645B.0129 “Policy of title insurance” defined. “Policy of title insurance” has the meaning ascribed to it in NRS 692A.035.
(Added to NRS by 1999, 3766)
NRS 645B.01305 “Private investor” defined. “Private investor” means:
1. An investor who is a natural person and who provides his own money for investment in a loan secured by a lien on real property; and
2. Two or more investors who are relatives and who jointly provide their own money for investment in a loan secured by a lien on real property, unless the investors are acting on behalf of a partnership, a corporation or some other separate legal entity.
(Added to NRS by 2001, 2463)
NRS 645B.0131 “Relative” defined. “Relative” means a spouse or any other person who is related within the second degree by blood or marriage.
(Added to NRS by 1999, 3766)
NRS 645B.0133 “Title agent” defined. “Title agent” has the meaning ascribed to it in NRS 692A.060.
(Added to NRS by 1999, 3766)
NRS 645B.0135 “Title insurer” defined. “Title insurer” has the meaning ascribed to it in NRS 692A.070.
(Added to NRS by 1999, 3766)
NRS 645B.0137 Requirements before initial licensing for mortgage brokers and mortgage agents. [Effective July 1, 2008.]
1. In addition to any other requirements provided by this chapter, a person who wishes to receive an initial license as a mortgage broker or mortgage agent must:
(a) Complete education on mortgage lending as required by this chapter; or
(b) Successfully pass a written examination as determined by the Division.
2. If the applicant for an initial license as a mortgage broker is not a natural person, the applicant must designate a natural person to be the qualified employee of the applicant and meet the requirements of subsection 1.
3. The Division:
(a) May hire a testing organization to create, administer and score a written examination; and
(b) May create waivers for a written examination.
4. The Commissioner may adopt regulations to carry out the provisions of this section, including, without limitation, regulations relating to the content of a written examination, the scoring of a written examination or any possible waivers of a written examination.
(Added to NRS by 2007, 950, effective July 1, 2008)
NRS 645B.0138 Courses of continuing education: Adoption of regulations by Commissioner. [Effective July 1, 2008.]
1. A course of continuing education that is required pursuant to this chapter must meet the requirements set forth by the Commissioner by regulation.
2. The Commissioner shall adopt regulations:
(a) Relating to the requirements for courses of continuing education, including, without limitation, regulations relating to the providers and instructors of such courses, records kept for such courses, approval and revocation of approval of such courses, monitoring of such courses and disciplinary action taken regarding such courses.
(b) Allowing for the participation of representatives of the mortgage lending industry pertaining to the creation of regulations regarding such courses.
(Added to NRS by 2007, 951, effective July 1, 2008)
NRS 645B.0145 Statutory and common-law rights, remedies and punishments unaffected; limitation on actions against State and its officers and employees. The provisions of this chapter do not:
1. Limit any statutory or common-law right of a person to bring a civil action against a mortgage broker or mortgage agent for any act or omission involved in the transaction of business by or on behalf of the mortgage broker or mortgage agent;
2. Limit the right of the State to punish a person for the violation of any law, ordinance or regulation; or
3. Establish a basis for a person to bring a civil action against the State or its officers or employees for any act or omission in carrying out the provisions of this chapter, including, without limitation, any act or omission relating to the disclosure of information or the failure to disclose information pursuant to the provisions of this chapter.
(Added to NRS by 1973, 1543; A 1999, 3801)—(Substituted in revision for NRS 645B.200)
EXEMPTIONS
NRS 645B.015 Exemptions for certain persons and entities. Except as otherwise provided in NRS 645B.016, the provisions of this chapter do not apply to:
1. Any person doing business under the laws of this State, any other state or the United States relating to banks, savings banks, trust companies, savings and loan associations, consumer finance companies, industrial loan companies, credit unions, thrift companies or insurance companies, including, without limitation, a subsidiary or a holding company of such a bank, company, association or union.
2. A real estate investment trust, as defined in 26 U.S.C. § 856, unless the business conducted in this State is not subject to supervision by the regulatory authority of the other jurisdiction, in which case licensing pursuant to this chapter is required.
3. An employee benefit plan, as defined in 29 U.S.C. § 1002(3), if the loan is made directly from money in the plan by the plan’s trustee.
4. An attorney at law rendering services in the performance of his duties as an attorney at law.
5. A real estate broker rendering services in the performance of his duties as a real estate broker.
6. Any person doing any act under an order of any court.
7. Any one natural person, or husband and wife, who provides money for investment in loans secured by a lien on real property, on his own account, unless such a person makes a loan secured by a lien on real property using his own money and assigns all or a part of his interest in the loan to another person, other than his spouse or child, within 5 years after the date on which the loan is made or the deed of trust is recorded, whichever occurs later.
8. Agencies of the United States and of this State and its political subdivisions, including the Public Employees’ Retirement System.
9. A seller of real property who offers credit secured by a mortgage of the property sold.
(Added to NRS by 1973, 1542; A 1975, 962; 1977, 618; 1981, 1791; 1983, 1314, 1381; 1985, 2190; 1987, 499; 1989, 966, 1762; 1993, 494; 1995, 1098; 1999, 3779; 2003, 3546; 2007, 951)
NRS 645B.016 Certificate of exemption required for certain persons and entities; application; fee; automatic expiration; prohibitions; administrative fine. Except as otherwise provided in subsection 2 and NRS 645B.690:
1. A person who claims an exemption from the provisions of this chapter pursuant to subsection 1 of NRS 645B.015 must:
(a) File a written application for a certificate of exemption with the Office of the Commissioner;
(b) Pay the fee required pursuant to NRS 645B.050;
(c) Include with the written application satisfactory proof that the person meets the requirements of subsection 1 of NRS 645B.015; and
(d) Provide evidence to the Commissioner that the person is duly licensed to conduct his business and such license is in good standing pursuant to the laws of this State, any other state or the United States.
2. The provisions of subsection 1 do not apply to the extent preempted by federal law.
3. The Commissioner may require a person who claims an exemption from the provisions of this chapter pursuant to subsections 2 to 9, inclusive, of NRS 645B.015 to:
(a) File a written application for a certificate of exemption with the Office of the Commissioner;
(b) Pay the fee required pursuant to NRS 645B.050; and
(c) Include with the written application satisfactory proof that the person meets the requirements of at least one of those exemptions.
4. A certificate of exemption expires automatically if, at any time, the person who claims the exemption no longer meets the requirements of at least one exemption set forth in the provisions of NRS 645B.015.
5. If a certificate of exemption expires automatically pursuant to this section, the person shall not provide any of the services of a mortgage broker or mortgage agent or otherwise engage in, carry on or hold himself out as engaging in or carrying on the business of a mortgage broker or mortgage agent unless the person applies for and is issued:
(a) A license as a mortgage broker or mortgage agent, as applicable, pursuant to this chapter; or
(b) Another certificate of exemption.
6. The Commissioner may impose upon a person who is required to apply for a certificate of exemption or who holds a certificate of exemption an administrative fine of not more than $10,000 for each violation that he commits, if the person:
(a) Has knowingly made or caused to be made to the Commissioner any false representation of material fact;
(b) Has suppressed or withheld from the Commissioner any information which the person possesses and which, if submitted by him, would have rendered the person ineligible to hold a certificate of exemption; or
(c) Has violated any provision of this chapter, a regulation adopted pursuant to this chapter or an order of the Commissioner that applies to a person who is required to apply for a certificate of exemption or who holds a certificate of exemption.
(Added to NRS by 1999, 3767; A 2003, 3547; 2007, 952)
NRS 645B.018 Exemptions for certain loans; application; grounds for granting exemption; powers and duties of Commissioner.
1. A person may apply to the Commissioner for an exemption from the provisions of this chapter governing the making of a loan of money.
2. The Commissioner may grant the exemption if he finds that:
(a) The making of the loan would not be detrimental to the financial condition of the lender, the debtor or the person who is providing the money for the loan;
(b) The lender, the debtor or the person who is providing the money for the loan has established a record of sound performance, efficient management, financial responsibility and integrity;
(c) The making of the loan is likely to increase the availability of capital for a sector of the state economy; and
(d) The making of the loan is not detrimental to the public interest.
3. The Commissioner:
(a) May revoke an exemption unless the loan for which the exemption was granted has been made; and
(b) Shall issue a written statement setting forth the reasons for his decision to grant, deny or revoke an exemption.
(Added to NRS by 1989, 965; A 1999, 3800)—(Substituted in revision for NRS 645B.197)
LICENSING OF MORTGAGE BROKERS
NRS 645B.020 Application for license; application for branch offices; requirements for issuance of license.
1. A person who wishes to be licensed as a mortgage broker must file a written application for a license with the Office of the Commissioner and pay the fee required pursuant to NRS 645B.050. An application for a license as a mortgage broker must:
(a) State the name, residence address and business address of the applicant and the location of each principal office and branch office at which the mortgage broker will conduct business within this State.
(b) State the name under which the applicant will conduct business as a mortgage broker.
(c) List the name, residence address and business address of each person who will:
(1) If the applicant is not a natural person, have an interest in the mortgage broker as a principal, partner, officer, director or trustee, specifying the capacity and title of each such person.
(2) Be associated with or employed by the mortgage broker as a mortgage agent.
(d) Include a general business plan and a description of the policies and procedures that the mortgage broker and his mortgage agents will follow to arrange and service loans and to conduct business pursuant to this chapter.
(e) State the length of time the applicant has been engaged in the business of a broker.
(f) Include a financial statement of the applicant and, if applicable, satisfactory proof that the applicant will be able to maintain continuously the net worth required pursuant to NRS 645B.115.
(g) Include all information required to complete the application.
(h) Include any other information required pursuant to the regulations adopted by the Commissioner or an order of the Commissioner.
2. If a mortgage broker will conduct business at one or more branch offices within this State, the mortgage broker must apply for a license for each such branch office.
3. Except as otherwise provided in this chapter, the Commissioner shall issue a license to an applicant as a mortgage broker if:
(a) The application is verified by the Commissioner and complies with the requirements of this chapter; and
(b) The applicant and each general partner, officer or director of the applicant, if the applicant is a partnership, corporation or unincorporated association:
(1) Has a good reputation for honesty, trustworthiness and integrity and displays competence to transact the business of a mortgage broker in a manner which safeguards the interests of the general public. The applicant must submit satisfactory proof of these qualifications to the Commissioner.
(2) Has not been convicted of, or entered a plea of nolo contendere to, a felony relating to the practice of mortgage brokers or any crime involving fraud, misrepresentation or moral turpitude.
(3) Has not made a false statement of material fact on his application.
(4) Has not had a license that was issued pursuant to the provisions of this chapter or chapter 645E of NRS suspended or revoked within the 10 years immediately preceding the date of his application.
(5) Has not had a license that was issued in any other state, district or territory of the United States or any foreign country suspended or revoked within the 10 years immediately preceding the date of his application.
(6) Has not violated any provision of this chapter or chapter 645E of NRS, a regulation adopted pursuant thereto or an order of the Commissioner.
(Added to NRS by 1973, 1536; A 1981, 1786; 1983, 1701; 1985, 2186; 1987, 1877; 1989, 1763; 1993, 495; 1997, 2171; 1999, 3780; 2001, 2464; 2003, 2721; 2005, 2781, 2807, 2816; 2007, 2852)
NRS 645B.021 Mortgage broker who is not natural person to designate natural person as qualified employee; regulations. [Effective July 1, 2008.]
1. If a mortgage broker is not a natural person, the mortgage broker must designate a natural person as a qualified employee to act on behalf of the mortgage broker.
2. The Division shall adopt regulations regarding a qualified employee, including, without limitation, regulations that establish:
(a) A definition for the term “qualified employee”;
(b) Any duties of a qualified employee; and
(c) Any requirements regarding a qualified employee.
(Added to NRS by 2007, 950, effective July 1, 2008)
NRS 645B.023 Payment of child support: Submission of certain information by applicant; grounds for denial of license; duty of Commissioner. [Effective until the date of the repeal of the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings.]
1. In addition to any other requirements set forth in this chapter:
(a) A natural person who applies for the issuance of a license as a mortgage broker shall include the social security number of the applicant in the application submitted to the Commissioner.
(b) A natural person who applies for the issuance or renewal of a license as a mortgage broker shall submit to the Commissioner the statement prescribed by the Division of Welfare and Supportive Services of the Department of Health and Human Services pursuant to NRS 425.520. The statement must be completed and signed by the applicant.
2. The Commissioner shall include the statement required pursuant to subsection 1 in:
(a) The application or any other forms that must be submitted for the issuance or renewal of the license; or
(b) A separate form prescribed by the Commissioner.
3. A license as a mortgage broker may not be issued or renewed by the Commissioner if the applicant is a natural person who:
(a) Fails to submit the statement required pursuant to subsection 1; or
(b) Indicates on the statement submitted pursuant to subsection 1 that he is subject to a court order for the support of a child and is not in compliance with the order or a plan approved by the district attorney or other public agency enforcing the order for the repayment of the amount owed pursuant to the order.
4. If an applicant indicates on the statement submitted pursuant to subsection 1 that he is subject to a court order for the support of a child and is not in compliance with the order or a plan approved by the district attorney or other public agency enforcing the order for the repayment of the amount owed pursuant to the order, the Commissioner shall advise the applicant to contact the district attorney or other public agency enforcing the order to determine the actions that the applicant may take to satisfy the arrearage.
(Added to NRS by 1997, 2170; A 1999, 3782; 2005, 2783, 2807, 2810)
NRS 645B.023 Payment of child support: Submission of certain information by applicant; grounds for denial of license; duty of Commissioner. [Effective on the date of the repeal of the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings and expires by limitation 2 years after that date.]
1. In addition to any other requirements set forth in this chapter, a natural person who applies for the issuance or renewal of a license as a mortgage broker shall submit to the Commissioner the statement prescribed by the Division of Welfare and Supportive Services of the Department of Health and Human Services pursuant to NRS 425.520. The statement must be completed and signed by the applicant.
2. The Commissioner shall include the statement required pursuant to subsection 1 in:
(a) The application or any other forms that must be submitted for the issuance or renewal of the license; or
(b) A separate form prescribed by the Commissioner.
3. A license as a mortgage broker may not be issued or renewed by the Commissioner if the applicant is a natural person who:
(a) Fails to submit the statement required pursuant to subsection 1; or
(b) Indicates on the statement submitted pursuant to subsection 1 that he is subject to a court order for the support of a child and is not in compliance with the order or a plan approved by the district attorney or other public agency enforcing the order for the repayment of the amount owed pursuant to the order.
4. If an applicant indicates on the statement submitted pursuant to subsection 1 that he is subject to a court order for the support of a child and is not in compliance with the order or a plan approved by the district attorney or other public agency enforcing the order for the repayment of the amount owed pursuant to the order, the Commissioner shall advise the applicant to contact the district attorney or other public agency enforcing the order to determine the actions that the applicant may take to satisfy the arrearage.
(Added to NRS by 1997, 2170; A 1999, 3782; 2005, 2783, 2807, 2810, effective on the date of the repeal of the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings)
NRS 645B.0243 Grounds for denial of license: Employing or associating with certain persons who are ineligible to be mortgage agents. The Commissioner may refuse to issue a license to an applicant if the Commissioner has reasonable cause to believe that the applicant or any general partner, officer or director of the applicant has, after October 1, 1999, employed or proposed to employ a person as a mortgage agent or authorized or proposed to authorize a person to be associated with a mortgage broker as a mortgage agent at a time when the applicant or the general partner, officer or director knew or, in light of all the surrounding facts and circumstances, reasonably should have known that the person:
1. Had been convicted of, or entered a plea of nolo contendere to:
(a) A felony relating to the practice of mortgage agents; or
(b) Any crime involving fraud, misrepresentation or moral turpitude; or
2. Had a financial services license or registration suspended or revoked within the immediately preceding 10 years.
(Added to NRS by 1999, 3768; A 2003, 2723)
NRS 645B.0245 Grounds for denial of license: Control by relative who would be ineligible to be licensed; act or omission of partner, officer or director.
1. If an applicant is a natural person, the Commissioner may refuse to issue a license to the applicant if the Commissioner has reasonable cause to believe that the applicant would be subject to control by a relative who would be ineligible to be licensed pursuant to this chapter.
2. If an applicant is a partnership, corporation or unincorporated association, the Commissioner may refuse to issue a license to the applicant if:
(a) Any member of the partnership or any officer or director of the corporation or unincorporated association has committed any act or omission that would be cause for refusing to issue a license to a natural person; or
(b) The Commissioner has reasonable cause to believe that any member of the partnership or any officer or director of the corporation or unincorporated association would be subject to control by a relative who would be ineligible to be licensed pursuant to this chapter.
(Added to NRS by 1999, 3769)
NRS 645B.0247 Grounds for denial of license: Authority of Commissioner not limited. The provisions of NRS 645B.0243 and 645B.0245 do not limit the authority of the Commissioner to refuse to issue a license to an applicant for any other lawful reason or pursuant to any other provision of law.
(Added to NRS by 1999, 3769)
NRS 645B.025 Posting of license; restrictions on transfer or assignment of license.
1. A mortgage broker shall post each license in a conspicuous place in the office to which it pertains.
2. A mortgage broker may not transfer or assign a license to another person, unless the Commissioner gives his written approval.
(Added to NRS by 1983, 1376; A 1983, 1843; 1987, 1877; 1999, 3782)
NRS 645B.035 Activities authorized by license; dual licensure as mortgage banker and mortgage broker.
1. A license as a mortgage broker entitles a licensee to engage only in the activities authorized by this chapter.
2. The provisions of this chapter do not prohibit a licensee from:
(a) Holding a license as a mortgage banker pursuant to chapter 645E of NRS; or
(b) Conducting the business of a mortgage banker and the business of a mortgage broker in the same office or place of business.
(Added to NRS by 1999, 3770; A 2003, 3548)
EXPIRATION AND RENEWAL OF BROKER’S LICENSE OR CERTIFICATE OF EXEMPTION; FEES
NRS 645B.050 Annual expiration of license or certificate of exemption; procedure for renewal; fees.
1. A license as a mortgage broker issued pursuant to this chapter expires each year on June 30, unless it is renewed. To renew such a license, the licensee must submit to the Commissioner on or before May 31 of each year:
(a) An application for renewal;
(b) The fee required to renew the license pursuant to this section;
(c) The information required pursuant to NRS 645B.051; and
(d) All information required to complete the renewal.
2. If the licensee fails to submit any item required pursuant to subsection 1 to the Commissioner on or before May 31 of any year, the license is cancelled as of June 30 of that year. The Commissioner may reinstate a cancelled license if the licensee submits to the Commissioner:
(a) An application for renewal;
(b) The fee required to renew the license pursuant to this section;
(c) The information required pursuant to NRS 645B.051;
(d) Except as otherwise provided in this section, a reinstatement fee of not more than $200; and
(e) All information required to complete the reinstatement.
3. Except as otherwise provided in NRS 645B.016, a certificate of exemption issued pursuant to this chapter expires each year on December 31, unless it is renewed. To renew a certificate of exemption, a person must submit to the Commissioner on or before November 30 of each year:
(a) An application for renewal that includes satisfactory proof that the person meets the requirements for an exemption from the provisions of this chapter; and
(b) The fee required to renew the certificate of exemption.
4. If the person fails to submit any item required pursuant to subsection 3 to the Commissioner on or before November 30 of any year, the certificate of exemption is cancelled as of December 31 of that year. Except as otherwise provided in NRS 645B.016, the Commissioner may reinstate a cancelled certificate of exemption if the person submits to the Commissioner:
(a) An application for renewal that includes satisfactory proof that the person meets the requirements for an exemption from the provisions of this chapter;
(b) The fee required to renew the certificate of exemption; and
(c) Except as otherwise provided in this section, a reinstatement fee of not more than $100.
5. Except as otherwise provided in this section, a person must pay the following fees to apply for, to be issued or to renew a license as a mortgage broker pursuant to this chapter:
(a) To file an original application for a license, not more than $1,500 for the principal office and not more than $40 for each branch office. The person must also pay such additional expenses incurred in the process of investigation as the Commissioner deems necessary.
(b) To be issued a license, not more than $1,000 for the principal office and not more than $60 for each branch office.
(c) To renew a license, not more than $500 for the principal office and not more than $100 for each branch office.
6. Except as otherwise provided in this section, a person must pay the following fees to apply for or to renew a certificate of exemption pursuant to this chapter:
(a) To file an application for a certificate of exemption, not more than $200.
(b) To renew a certificate of exemption, not more than $100.
7. To be issued a duplicate copy of any license or certificate of exemption, a person must make a satisfactory showing of its loss and pay a fee of not more than $10.
8. Except as otherwise provided in this chapter, all fees received pursuant to this chapter must be deposited in the Fund for Mortgage Lending created by NRS 645F.270.
9. The Commissioner may, by regulation, adjust any fee set forth in this section if the Commissioner determines that such an adjustment is necessary for the Commissioner to carry out his duties pursuant to this chapter. The amount of any adjustment in a fee pursuant to this subsection must not exceed the amount determined to be necessary for the Commissioner to carry out his duties pursuant to this chapter.
(Added to NRS by 1973, 1538; A 1975, 814; 1977, 1636; 1979, 120, 1094; 1981, 1788; 1983, 1320, 1379, 1702; 1985, 2187; 1987, 86, 1878; 1989, 1764; 1991, 177, 1803, 1825; 1993, 496; 1997, 2172; 1999, 3782; 2001, 2465; 2003, 3229, 3548; 2003, 20th Special Session, 265; 2005, 2784, 2807, 2817; 2007, 953)
NRS 645B.051 Continuing education required for renewal of license. [Effective through June 30, 2008.]
1. Except as otherwise provided in this section, in addition to the requirements set forth in NRS 645B.050, to renew a license as a mortgage broker:
(a) If the licensee is a natural person, the licensee must submit to the Commissioner satisfactory proof that the licensee attended at least 10 hours of certified courses of continuing education during the 12 months immediately preceding the date on which the license expires.
(b) If the licensee is not a natural person, the licensee must submit to the Commissioner satisfactory proof that each natural person who supervises the daily business of the licensee attended at least 10 hours of certified courses of continuing education during the 12 months immediately preceding the date on which the license expires.
2. The Commissioner may provide by regulation that any hours of a certified course of continuing education attended during a 12-month period, but not needed to satisfy a requirement set forth in this section for the 12-month period in which the course was taken, may be used to satisfy a requirement set forth in this section for a later 12-month period.
3. As used in this section, “certified course of continuing education” means a course of continuing education which relates to the mortgage industry or mortgage transactions and which is certified by:
(a) The National Association of Mortgage Brokers or any successor in interest to that organization; or
(b) Any organization designated for this purpose by the Commissioner by regulation.
(Added to NRS by 2001, 2464; A 2003, 3551)
NRS 645B.051 Continuing education required for renewal of license. [Effective July 1, 2008.]
1. Except as otherwise provided in this section, in addition to the requirements set forth in NRS 645B.050, to renew a license as a mortgage broker:
(a) If the licensee is a natural person, the licensee must submit to the Commissioner satisfactory proof that the licensee attended at least 10 hours of certified courses of continuing education during the 12 months immediately preceding the date on which the license expires.
(b) If the licensee is not a natural person, the licensee must submit to the Commissioner satisfactory proof that each natural person who supervises the daily business of the licensee attended at least 10 hours of certified courses of continuing education during the 12 months immediately preceding the date on which the license expires.
2. The Commissioner may provide by regulation that if a person attends more than 10 hours of certified courses of continuing education during a 12-month period, the extra hours may be used to satisfy the requirement for the immediately following 12-month period and for that immediately following 12-month period only.
3. As used in this section, “certified course of continuing education” means a course of continuing education which relates to the mortgage industry or mortgage transactions and which meets the requirements set forth by the Commissioner by regulation pursuant to NRS 645B.0138.
(Added to NRS by 2001, 2464; A 2003, 3551; 2007, 954, effective July 1, 2008)
SUPERVISION BY COMMISSIONER
General Provisions
NRS 645B.060 Duties of Commissioner: Regulations; investigations; annual examinations; periodic and special audits; hearings; related fees; biennial examinations.
1. Subject to the administrative control of the Director of the Department of Business and Industry, the Commissioner shall exercise general supervision and control over mortgage brokers and mortgage agents doing business in this State.
2. In addition to the other duties imposed upon him by law, the Commissioner shall:
(a) Adopt regulations:
(1) Setting forth the requirements for an investor to acquire ownership of or a beneficial interest in a loan secured by a lien on real property. The regulations must include, without limitation, the minimum financial conditions that the investor must comply with before becoming an investor.
(2) Establishing reasonable limitations and guidelines on loans made by a mortgage broker to a director, officer, mortgage agent or employee of the mortgage broker.
(b) Adopt any other regulations that are necessary to carry out the provisions of this chapter, except as to loan brokerage fees.
(c) Conduct such investigations as may be necessary to determine whether any person has violated any provision of this chapter, a regulation adopted pursuant to this chapter or an order of the Commissioner.
(d) Except as otherwise provided in subsection 4, conduct an annual examination of each mortgage broker doing business in this State. The annual examination must include, without limitation, a formal exit review with the mortgage broker. The Commissioner shall adopt regulations prescribing:
(1) Standards for determining the rating of each mortgage broker based upon the results of the annual examination; and
(2) Procedures for resolving any objections made by the mortgage broker to the results of the annual examination. The results of the annual examination may not be opened to public inspection pursuant to NRS 645B.090 until any objections made by the mortgage broker have been decided by the Commissioner.
(e) Conduct such other examinations, periodic or special audits, investigations and hearings as may be necessary for the efficient administration of the laws of this State regarding mortgage brokers and mortgage agents. The Commissioner shall adopt regulations specifying the general guidelines that will be followed when a periodic or special audit of a mortgage broker is conducted pursuant to this chapter.
(f) Classify as confidential certain records and information obtained by the Division when those matters are obtained from a governmental agency upon the express condition that they remain confidential. This paragraph does not limit examination by:
(1) The Legislative Auditor; or
(2) The Department of Taxation if necessary to carry out the provisions of chapter 363A of NRS.
(g) Conduct such examinations and investigations as are necessary to ensure that mortgage brokers and mortgage agents meet the requirements of this chapter for obtaining a license, both at the time of the application for a license and thereafter on a continuing basis.
3. For each special audit, investigation or examination, a mortgage broker or mortgage agent shall pay a fee based on the rate established pursuant to NRS 645F.280.
4. The Commissioner may conduct biennial examinations of a mortgage broker instead of annual examinations, as described in paragraph (d) of subsection 2, if the mortgage broker:
(a) Received a rating in the last annual examination that meets a threshold determined by the Commissioner;
(b) Has not had any adverse change in financial condition since the last annual examination, as shown by financial statements of the mortgage broker;
(c) Has not had any complaints received by the Division that resulted in any administrative action by the Division; and
(d) Does not maintain any trust accounts pursuant to NRS 645B.170 or 645B.175 or arrange loans funded by private investors.
(Added to NRS by 1973, 1538; A 1973, 1669; 1981, 1789; 1983, 1380, 1703; 1987, 1878, 2224; 1993, 497, 1893; 1995, 526; 1999, 3784; 2001, 2467; 2003, 3552; 2003, 20th Special Session, 220; 2007, 955)
NRS 645B.070 Subpoenas; oaths; examination of witnesses; penalty; assessment of costs.
1. In the conduct of any examination, periodic or special audit, investigation or hearing, the Commissioner may:
(a) Compel the attendance of any person by subpoena.
(b) Administer oaths.
(c) Examine any person under oath concerning the business and conduct of affairs of any person subject to the provisions of this chapter and in connection therewith require the production of any books, records or papers relevant to the inquiry.
2. Any person subpoenaed under the provisions of this section who willfully refuses or willfully neglects to appear at the time and place named in the subpoena or to produce books, records or papers required by the Commissioner, or who refuses to be sworn or answer as a witness, is guilty of a misdemeanor and shall be punished as provided in NRS 645B.950.
3. In addition to the authority to recover attorney’s fees and costs pursuant to any other statute, the Commissioner may assess against and collect from a person all costs, including, without limitation, reasonable attorney’s fees, that are attributable to any examination, periodic or special audit, investigation or hearing that is conducted to examine or investigate the conduct, activities or business of the person pursuant to this chapter.
(Added to NRS by 1973, 1538; A 1981, 1789; 1983, 1703; 1987, 1879; 1999, 3785; 2003, 3468)
NRS 645B.075 Payment of statutory assessment by mortgage broker; duty of mortgage broker and agents to cooperate fully with audits and examinations. Each mortgage broker shall pay the assessment levied pursuant to NRS 645F.180. Each mortgage broker and mortgage agent shall cooperate fully with the audits and examinations performed pursuant thereto.
(Added to NRS by 1987, 826; A 1999, 3799; 2003, 3552)
Records and Financial Statements
NRS 645B.080 Records relating to mortgage transactions, financial condition and trust accounts; monthly report to Commissioner; accounting procedures for trust accounts; regulations.
1. Each mortgage broker shall keep and maintain at all times at each location where the mortgage broker conducts business in this state complete and suitable records of all mortgage transactions made by the mortgage broker at that location. Each mortgage broker shall also keep and maintain at all times at each such location all original books, papers and data, or copies thereof, clearly reflecting the financial condition of the business of the mortgage broker.
2. Each mortgage broker shall submit to the Commissioner each month a report of the mortgage broker’s activity for the previous month. The report must:
(a) Specify the volume of loans arranged by the mortgage broker for the month or state that no loans were arranged in that month;
(b) Include any information required pursuant to NRS 645B.260 or pursuant to the regulations adopted by the Commissioner; and
(c) Be submitted to the Commissioner by the 15th day of the month following the month for which the report is made.
3. The Commissioner may adopt regulations prescribing accounting procedures for mortgage brokers handling trust accounts and the requirements for keeping records relating to such accounts.
(Added to NRS by 1973, 1538; A 1981, 1789; 1985, 2187; 1987, 1879; 1989, 1765; 1995, 136; 1999, 3786)
NRS 645B.085 Annual financial statement; audit of trust accounts; regulations.
1. Except as otherwise provided in this section, not later than 120 days after the last day of each fiscal year for a mortgage broker, the mortgage broker shall submit to the Commissioner a financial statement that:
(a) Is dated not earlier than the last day of the fiscal year; and
(b) Has been prepared from the books and records of the mortgage broker by an independent public accountant who holds a permit to engage in the practice of public accounting in this State that has not been revoked or suspended.
2. The Commissioner may grant a reasonable extension for the submission of a financial statement pursuant to this section if a mortgage broker requests such an extension before the date on which the financial statement is due.
3. If a mortgage broker maintains any accounts described in subsection 1 of NRS 645B.175, the financial statement submitted pursuant to this section must be audited. If a mortgage broker maintains any accounts described in subsection 4 of NRS 645B.175, those accounts must be audited. The public accountant who prepares the report of an audit shall submit a copy of the report to the Commissioner at the same time that he submits the report to the mortgage broker.
4. The Commissioner shall adopt regulations prescribing the scope of an audit conducted pursuant to subsection 3.
(Added to NRS by 1999, 3772; A 2001, 2467; 2007, 956)
NRS 645B.090 Records of Commissioner: General provisions governing public inspection, confidentiality and disclosure of information relating to investigations and disciplinary action.
1. Except as otherwise provided in this section or by specific statute, all papers, documents, reports and other written instruments filed with the Commissioner pursuant to this chapter are open to public inspection.
2. Except as otherwise provided in subsection 3, the Commissioner may withhold from public inspection or refuse to disclose to a person, for such time as the Commissioner considers necessary, any information that, in his judgment, would:
(a) Impede or otherwise interfere with an investigation that is currently pending against a mortgage broker;
(b) Have an undesirable effect on the welfare of the public or the welfare of any mortgage broker or mortgage agent; or
(c) Give any mortgage broker a competitive advantage over any other mortgage broker.
3. Except as otherwise provided in NRS 645B.092, the Commissioner shall disclose the following information concerning a mortgage broker to any person who requests it:
(a) The findings and results of any investigation which has been completed during the immediately preceding 5 years against the mortgage broker pursuant to the provisions of this chapter and which has resulted in a finding by the Commissioner that the mortgage broker committed a violation of a provision of this chapter, a regulation adopted pursuant to this chapter or an order of the Commissioner; and
(b) The nature of any disciplinary action that has been taken during the immediately preceding 5 years against the mortgage broker pursuant to the provisions of this chapter.
(Added to NRS by 1973, 1543; A 1983, 1704; 1987, 1880; 1999, 3786; 2003, 3469)
NRS 645B.092 Records of Commissioner: Certain records relating to investigation deemed confidential; certain records relating to disciplinary action and orders imposing discipline deemed public records.
1. Except as otherwise provided in this section and NRS 239.0115, a complaint filed with the Commissioner, all documents and other information filed with the complaint and all documents and other information compiled as a result of an investigation conducted to determine whether to initiate disciplinary action are confidential.
2. The complaint or other document filed by the Commissioner to initiate disciplinary action and all documents and information considered by the Commissioner when determining whether to impose discipline are public records.
3. An order that imposes discipline and the findings of fact and conclusions of law supporting that order are public records.
(Added to NRS by 2003, 3468; A 2007, 2147)
Commingling Money
NRS 645B.093 Commingling certain money prohibited.
1. A mortgage broker who is a broker-dealer or a sales representative licensed pursuant to NRS 90.310 or who is exempt from licensure pursuant to NRS 90.320:
(a) Shall not commingle money received for mortgage transactions and money received for securities transactions; and
(b) Shall ensure that all money received for mortgage transactions is accounted for separately from all money received for securities transactions.
2. A mortgage broker who is an investment adviser or a representative of an investment adviser licensed pursuant to NRS 90.330 or exempt from licensure pursuant to NRS 90.340:
(a) Shall not commingle money received for mortgage transactions and money received for securities transactions; and
(b) Shall ensure that all money received for mortgage transactions is accounted for separately from all money received for securities transactions.
(Added to NRS by 2007, 951)
Transfer of Stock
NRS 645B.095 Notification of certain transfers required; application to Commissioner for approval of change of control; investigation; waiver.
1. As used in this section, “change of control” means:
(a) A transfer of voting stock which results in giving a person, directly or indirectly, the power to direct the management and policy of a mortgage broker; or
(b) A transfer of at least 25 percent of the outstanding voting stock of a mortgage broker.
2. The Commissioner must be notified of a transfer of 5 percent or more of the outstanding voting stock of a mortgage broker and must approve a transfer of voting stock of a mortgage broker which constitutes a change of control.
3. The person who acquires stock resulting in a change of control of the mortgage broker shall apply to the Commissioner for approval of the transfer. The application must contain information which shows that the requirements of this chapter for obtaining a license will be satisfied after the change of control. Except as otherwise provided in subsection 4, the Commissioner shall conduct an investigation to determine whether those requirements will be satisfied. If, after the investigation, the Commissioner denies the application, he may forbid the applicant from participating in the business of the mortgage broker.
4. A mortgage broker may submit a written request to the Commissioner to waive an investigation pursuant to subsection 3. The Commissioner may grant a waiver if the applicant has undergone a similar investigation by a state or federal agency in connection with the licensing of or his employment with a financial institution.
(Added to NRS by 1983, 1376; A 1983, 1843; 1985, 1344; 1987, 1880; 1999, 3787)
Net Worth
NRS 645B.115 Minimum net worth required for certain mortgage brokers; initial and annual determination of net worth; examination by Commissioner; regulations.
1. If a mortgage broker maintains any accounts described in NRS 645B.175, the mortgage broker and his mortgage agents shall not engage in any activity that is authorized pursuant to this chapter, unless the mortgage broker maintains continuously a minimum net worth in the following amount based upon the average monthly balance of the accounts maintained by the mortgage broker pursuant to NRS 645B.175:
AVERAGE MONTHLY BALANCE MINIMUM NET
WORTH REQUIRED
$100,000 or less…………………………………………………………………………………….. $25,000
More than $100,000 but not more than $250,000…………………………………….. 50,000
More than $250,000 but not more than $500,000…………………………………… 100,000
More than $500,000 but not more than $1,000,000………………………………… 200,000
More than $1,000,000……………………………………………………………………………. 250,000
The Commissioner shall determine the appropriate initial minimum net worth that must be maintained by the mortgage broker pursuant to this section based upon the expected average monthly balance of the accounts maintained by the mortgage broker pursuant to NRS 645B.175. After determining the initial minimum net worth that must be maintained by the mortgage broker, the Commissioner shall, on an annual basis, determine the appropriate minimum net worth that must be maintained by the mortgage broker pursuant to this section based upon the average monthly balance of the accounts maintained by the mortgage broker pursuant to NRS 645B.175.
2. If requested by the Commissioner, a mortgage broker who is subject to the provisions of this section and his mortgage agents shall submit to the Commissioner or allow the Commissioner to examine any documentation or other evidence that is related to determining the net worth of the mortgage broker.
3. The Commissioner:
(a) Shall adopt regulations prescribing standards for determining the net worth of a mortgage broker; and
(b) May adopt any other regulations that are necessary to carry out the provisions of this section.
(Added to NRS by 1999, 3771)
ESCROW AND TRUST ACCOUNTS
NRS 645B.165 Escrow account required for fee, salary, deposit or money paid in advance; release from escrow; exceptions; refunds; penalty.
1. Except as otherwise provided in subsection 3, the amount of any advance fee, salary, deposit or money paid to a mortgage broker and his mortgage agents or any other person to obtain a loan which will be secured by a lien on real property must be placed in escrow pending completion of the loan or a commitment for the loan.
2. The amount held in escrow pursuant to subsection 1 must be released:
(a) Upon completion of the loan or commitment for the loan, to the mortgage broker or other person to whom the advance fee, salary, deposit or money was paid.
(b) If the loan or commitment for the loan fails, to the person who made the payment.
3. Advance payments to cover reasonably estimated costs paid to third persons are excluded from the provisions of subsections 1 and 2 if the person making them first signs a written agreement which specifies the estimated costs by item and the estimated aggregate cost, and which recites that money advanced for costs will not be refunded. If an itemized service is not performed and the estimated cost thereof is not refunded, the recipient of the advance payment is subject to the penalties provided in NRS 645B.960.
(Added to NRS by 1977, 618; A 1979, 1397; 1989, 1442; 1991, 178; 1995, 1313; 1999, 3793)
NRS 645B.170 Trust account required for money deposited to pay taxes or insurance premiums; fiduciary duty of mortgage broker; accounting to debtor and Commissioner; additional duties and prohibitions.
1. All money paid to a mortgage broker and his mortgage agents for payment of taxes or insurance premiums on real property which secures any loan arranged by the mortgage broker must be deposited in an insured depository financial institution and kept separate, distinct and apart from money belonging to the mortgage broker. Such money, when deposited, is to be designated as an “impound trust account” or under some other appropriate name indicating that the accounts are not the money of the mortgage broker.
2. The mortgage broker has a fiduciary duty to each debtor with respect to the money in an impound trust account.
3. The mortgage broker shall, upon reasonable notice, account to any debtor whose real property secures a loan arranged by the mortgage broker for any money which that person has paid to the mortgage broker for the payment of taxes or insurance premiums on the real property.
4. The mortgage broker shall, upon reasonable notice, account to the Commissioner for all money in an impound trust account.
5. A mortgage broker shall:
(a) Require contributions to an impound trust account in an amount reasonably necessary to pay the obligations as they become due.
(b) Within 30 days after the completion of the annual review of an impound trust account, notify the debtor:
(1) Of the amount by which the contributions exceed the amount reasonably necessary to pay the annual obligations due from the account; and
(2) That the debtor may specify the disposition of the excess money within 20 days after receipt of the notice. If the debtor fails to specify such a disposition within that time, the mortgage broker shall maintain the excess money in the account.
Ê This subsection does not prohibit a mortgage broker from requiring additional amounts to be paid into an impound trust account to recover a deficiency that exists in the account.
6. A mortgage broker shall not make payments from an impound trust account in a manner that causes a policy of insurance to be cancelled or causes property taxes or similar payments to become delinquent.
(Added to NRS by 1973, 1543; A 1983, 1708; 1987, 1884; 1989, 1765; 1999, 1539, 3793)
NRS 645B.175 Trust or escrow account required for money received from investor to fund loan; trust or escrow account required for money received from debtor to repay loan; release of money; accounting to investor, debtor and Commissioner; additional conditions, limitations and prohibitions.
1. Except as otherwise provided in this section, all money received by a mortgage broker and his mortgage agents from an investor to acquire ownership of or a beneficial interest in a loan secured by a lien on real property must:
(a) Be deposited in:
(1) An insured depository financial institution; or
(2) An escrow account which is controlled by a person who is independent of the parties and subject to instructions regarding the account which are approved by the parties.
(b) Be kept separate from money:
(1) Belonging to the mortgage broker in an account appropriately named to indicate that the money does not belong to the mortgage broker.
(2) Received pursuant to subsection 4.
2. Except as otherwise provided in this section, the amount held in trust pursuant to subsection 1 must be released:
(a) Upon completion of the loan, including proper recordation of the respective interests or release, or upon completion of the transfer of the ownership or beneficial interest therein, to the debtor or his designee less the amount due the mortgage broker for the payment of any fee or service charge;
(b) If the loan or the transfer thereof is not consummated, to each investor who furnished the money held in trust; or
(c) Pursuant to any instructions regarding the escrow account.
3. The amount held in trust pursuant to subsection 1 must not be released to the debtor or his designee unless:
(a) The amount released is equal to the total amount of money which is being loaned to the debtor for that loan, less the amount due the mortgage broker for the payment of any fee or service charge; and
(b) The mortgage broker has provided a written instruction to a title agent or title insurer requiring that a lender’s policy of title insurance or appropriate title endorsement, which names as an insured each investor who owns a beneficial interest in the loan, be issued for the real property securing the loan.
4. Except as otherwise provided in this section, all money paid to a mortgage broker and his mortgage agents by a person in full or in partial payment of a loan secured by a lien on real property, must:
(a) Be deposited in:
(1) An insured depository financial institution; or
(2) An escrow account which is controlled by a person who is subject to instructions regarding the account which are approved by the parties.
(b) Be kept separate from money:
(1) Belonging to the mortgage broker in an account appropriately named to indicate that it does not belong to the mortgage broker.
(2) Received pursuant to subsection 1.
5. Except as otherwise provided in this section, the amount held in trust pursuant to subsection 4:
(a) Must be released, upon the deduction and payment of any fee or service charge due the mortgage broker, to each investor who owns a beneficial interest in the loan in exact proportion to the beneficial interest that he owns in the loan; and
(b) Must not be released, in any proportion, to an investor who owns a beneficial interest in the loan, unless the amount described in paragraph (a) is also released to every other investor who owns a beneficial interest in the loan.
6. An investor may waive, in writing, the right to receive one or more payments, or portions thereof, that are released to other investors in the manner set forth in subsection 5. A mortgage broker or mortgage agent shall not act as the attorney-in-fact or the agent of an investor with respect to the giving of a written waiver pursuant to this subsection. Any such written waiver applies only to the payment or payments, or portions thereof, that are included in the written waiver and does not affect the right of the investor to:
(a) Receive the waived payment or payments, or portions thereof, at a later date; or
(b) Receive all other payments in full and in accordance with the provisions of subsection 5.
7. Upon reasonable notice, any mortgage broker described in this section shall:
(a) Account to any investor or debtor who has paid to the mortgage broker or his mortgage agents money that is required to be deposited in a trust account pursuant to this section; and
(b) Account to the Commissioner for all money which the mortgage broker and his mortgage agents have received from each investor or debtor and which the mortgage broker is required to deposit in a trust account pursuant to this section.
8. Money received by a mortgage broker and his mortgage agents pursuant to this section from a person who is not associated with the mortgage broker may be held in trust for not more than 45 days before an escrow account must be opened in connection with the loan. If, within this 45-day period, the loan or the transfer therefor is not consummated, the money must be returned within 24 hours. If the money is so returned, it may not be reinvested with the mortgage broker for at least 15 days.
9. If a mortgage broker or a mortgage agent receives any money pursuant to this section, the mortgage broker or mortgage agent, after the deduction and payment of any fee or service charge due the mortgage broker, shall not release the money to:
(a) Any person who does not have a contractual or legal right to receive the money; or
(b) Any person who has a contractual right to receive the money if the mortgage broker or mortgage agent knows or, in light of all the surrounding facts and circumstances, reasonably should know that the person’s contractual right to receive the money violates any provision of this chapter or a regulation adopted pursuant to this chapter.
10. If a mortgage broker maintains any accounts described in subsection 1 or subsection 4, the mortgage broker shall, in addition to the annual financial statement audited pursuant to NRS 645B.085, submit to the Commissioner each 6 calendar months a financial statement concerning those trust accounts.
11. The Commissioner shall adopt regulations concerning the form and content required for financial statements submitted pursuant to subsection 10.
(Added to NRS by 1981, 1784; A 1983, 1708; 1985, 2189; 1987, 1885; 1999, 3794; 2007, 956)
NRS 645B.180 Limitations on execution or attachment of money in trust account; commingling of money prohibited.
1. Money in an impound trust account is not subject to execution or attachment on any claim against the mortgage broker or his mortgage agents.
2. It is unlawful for a mortgage broker or his mortgage agents knowingly to keep or cause to be kept any money in a depository financial institution under the heading of “impound trust account” or any other name designating such money as belonging to the investors or debtors of the mortgage broker, unless the money has been paid to the mortgage broker or his mortgage agents by an investor or debtor and is being held in trust by the mortgage broker pursuant to NRS 645B.170 or 645B.175.
(Added to NRS by 1973, 1543; A 1989, 1766; 1999, 1540, 3796)
DISCLOSURES AND ADVERTISING
NRS 645B.185 Use of disclosure forms required; release of financial statements; duties of mortgage broker and agents; prohibitions; powers of Commissioner; regulations.
1. A mortgage broker or mortgage agent shall not accept money from a private investor to acquire ownership of or a beneficial interest in a loan secured by a lien on real property unless:
(a) The private investor and the mortgage broker or mortgage agent sign and date a disclosure form that complies with the provisions of this section; and
(b) The mortgage broker or mortgage agent gives the private investor the original disclosure form that has been signed and dated.
2. A private investor and a mortgage broker or mortgage agent must sign and date a separate disclosure form pursuant to subsection 1 for each loan in which the private investor invests his money. A mortgage broker or mortgage agent shall not act as the attorney-in-fact or the agent of a private investor with respect to the signing or dating of any disclosure form.
3. In addition to the requirements of subsections 1 and 2, a mortgage broker or mortgage agent shall not accept money from a private investor to acquire ownership of or a beneficial interest in a loan secured by a lien on real property, unless the mortgage broker or mortgage agent gives the private investor a written form by which the private investor may request that the mortgage broker authorize the Commissioner to release the mortgage broker’s financial statement to the private investor. Such a form must be given to the private investor for each loan. If the private investor, before giving money to the mortgage broker for the loan, requests that the mortgage broker authorize the release of a financial statement pursuant to this subsection, the mortgage broker and his mortgage agents shall not accept money from the private investor for that loan until the mortgage broker receives notice from the Commissioner that the financial statement has been released to the private investor.
4. A private investor and a mortgage broker or mortgage agent may not agree to alter or waive the provisions of this section by contract or other agreement. Any such contract or agreement is void and must not be given effect to the extent that it violates the provisions of this section.
5. A mortgage broker shall retain a copy of each disclosure form that is signed and dated pursuant to subsection 1 for the period that is prescribed in the regulations adopted by the Commissioner.
6. The standard provisions for each such disclosure form must include, without limitation, statements:
(a) Explaining the risks of investing through the mortgage broker, including, without limitation:
(1) The possibility that the debtor may default on the loan;
(2) The nature of the losses that may result through foreclosure;
(3) The fact that payments of principal and interest are not guaranteed and that the private investor may lose the entire amount of principal that he has invested;
(4) The fact that the mortgage broker is not a depository financial institution and that the investment is not insured by any depository insurance and is not otherwise insured or guaranteed by the Federal or State Government; and
(5) Any other information required pursuant to the regulations adopted by the Commissioner; and
(b) Disclosing to the private investor the following information if the information is known or, in light of all the surrounding facts and circumstances, reasonably should be known to the mortgage broker:
(1) Whether the real property that will secure the loan is encumbered by any other liens and, if so, the priority of each such lien, the amount of debt secured by each such lien and the current status of that debt, including, without limitation, whether the debt is being paid or is in default;
(2) Whether the mortgage broker or any general partner, officer, director or mortgage agent of the mortgage broker has any direct or indirect interest in the debtor;
(3) Whether any disciplinary action has been taken by the Commissioner against the mortgage broker or any general partner, officer or director of the mortgage broker within the immediately preceding 12 months, and the nature of any such disciplinary action;
(4) Whether the mortgage broker or any general partner, officer or director of the mortgage broker has been convicted within the immediately preceding 12 months for violating any law, ordinance or regulation that involves fraud, misrepresentation or a deceitful, fraudulent or dishonest business practice; and
(5) Any other information required pursuant to the regulations adopted by the Commissioner.
7. Whether or not a mortgage broker is required to disclose any information to private investors through a disclosure form that complies with the provisions of this section, the Commissioner may order the mortgage broker to disclose to private investors and other investors or to the general public any information concerning the mortgage broker, any general partner, officer, director or mortgage agent of the mortgage broker or any loan in which the mortgage broker is or has been involved, if the Commissioner, in his judgment, believes that the information:
(a) Would be of material interest to a reasonable investor who is deciding whether to invest money with the mortgage broker; or
(b) Is necessary to protect the welfare of the public.
8. In carrying out the provisions of subsection 7, the Commissioner may, without limitation, order a mortgage broker to include statements of disclosure prescribed by the Commissioner:
(a) In the disclosure form that must be given to private investors pursuant to subsection 1;
(b) In additional disclosure forms that must be given to private investors and other investors before or after they have invested money through the mortgage broker; or
(c) In any advertisement that the mortgage broker uses in carrying on his business.
9. The Commissioner:
(a) Shall adopt regulations prescribing the period for which a mortgage broker must retain a copy of each disclosure form that is given to private investors; and
(b) May adopt any other regulations that are necessary to carry out the provisions of this section, including, without limitation, regulations specifying the size of print and any required formatting or typesetting that a mortgage broker must use in any form that is given to private investors.
(Added to NRS by 1985, 2185; A 1987, 1886; 1999, 3796; 2001, 2468)
NRS 645B.186 Disclosure of certain business and personal relationships required.
1. If a licensee or a relative of the licensee is licensed as, conducts business as or holds a controlling interest or position in:
(a) A construction control;
(b) An escrow agency or escrow agent; or
(c) A title agent, a title insurer or an escrow officer of a title agent or title insurer,
Ê the licensee shall fully disclose his status as, connection to or relationship with the construction control, escrow agency, escrow agent, title agent, title insurer or escrow officer to each investor, and the licensee shall not require, as a condition to an investor acquiring ownership of or a beneficial interest in a loan secured by a lien on real property, that the investor transact business with or use the services of the construction control, escrow agency, escrow agent, title agent, title insurer or escrow officer or that the investor authorize the licensee to transact business with or use the services of the construction control, escrow agency, escrow agent, title agent, title insurer or escrow officer on behalf of the investor.
2. For the purposes of this section, a person shall be deemed to hold a controlling interest or position if the person:
(a) Owns or controls a majority of the voting stock or holds any other controlling interest, directly or indirectly, that gives him the power to direct management or determine policy; or
(b) Is a partner, officer, director or trustee.
3. As used in this section, “licensee” means:
(a) A person who is licensed as a mortgage broker pursuant to this chapter; and
(b) Any general partner, officer or director of such a person.
(Added to NRS by 1999, 3770)
NRS 645B.187 Prohibition on making certain guarantees in advertisements and solicitations; limitations on payment of premium interest; penalty.
1. If a mortgage broker or mortgage agent solicits or receives money from an investor, the mortgage broker or mortgage agent shall not:
(a) In any advertisement; or
(b) Before, during or after solicitation or receipt of money from the investor,
Ê make, or cause or encourage to be made, any explicit or implicit statement, representation or promise, oral or written, which a reasonable person would construe as a guarantee that the investor will be repaid the principal amount of money he invests or will earn a specific rate of return or a specific rate of interest on the principal amount of money he invests.
2. If a mortgage broker offers to pay or pays premium interest on money that the mortgage broker receives from a person to acquire ownership of or a beneficial interest in a loan secured by a lien on real property or in full or partial payment of such a loan:
(a) The premium interest must be paid from the assets or income of the mortgage broker; and
(b) The mortgage broker or a mortgage agent shall not:
(1) In any advertisement; or
(2) Before, during or after receipt of money from such a person,
Ê make, or cause or encourage to be made, any explicit or implicit statement, representation or promise, oral or written, which a reasonable person would construe as a guarantee that the mortgage broker will pay the premium interest.
3. A person who violates any provision of this section is guilty of a misdemeanor and shall be punished as provided in NRS 645B.950.
4. As used in this section, “premium interest” means that amount of interest a mortgage broker pays to a person which exceeds the amount which is being obtained from the insured depository financial institution.
(Added to NRS by 1985, 2185; A 1999, 3799)
NRS 645B.189 Statements of disclosure required in certain advertisements; review of advertisements by Commissioner; advertisements must comply with state and federal laws concerning deceptive trade practices and deceptive advertising; regulations.
1. If, in carrying on his business, a mortgage broker uses an advertisement that is designed, intended or reasonably likely to solicit money from private investors, the mortgage broker shall include in each such advertisement a statement of disclosure in substantially the following form:
Money invested through a mortgage broker is not guaranteed to earn any interest or return and is not insured.
2. A mortgage broker shall include in each advertisement that the mortgage broker uses in carrying on his business any statements of disclosure required pursuant to the regulations adopted by the Commissioner or required pursuant to an order of the Commissioner entered in accordance with subsections 7 and 8 of NRS 645B.185.
3. Each mortgage broker who has received his initial license within the past 12 months shall submit any proposed advertisement that the mortgage broker intends to use in carrying on his business to the Commissioner for approval.
4. In addition to the requirements set forth in this chapter, each advertisement that a mortgage broker uses in carrying on his business must comply with the requirements of:
(a) NRS 598.0903 to 598.0999, inclusive, concerning deceptive trade practices; and
(b) Any applicable federal statute or regulation concerning deceptive advertising and the advertising of interest rates.
5. If a mortgage broker violates any provision of NRS 598.0903 to 598.0999, inclusive, concerning deceptive trade practices or any federal statute or regulation concerning deceptive advertising or the advertising of interest rates, in addition to any sanction or penalty imposed by state or federal law upon the mortgage broker for the violation, the Commissioner may take any disciplinary action set forth in subsection 2 of NRS 645B.670 against the mortgage broker.
6. The Commissioner may adopt any regulations that are necessary to carry out the provisions of this section.
(Added to NRS by 1985, 2185; A 1987, 1886; 1999, 3799; 2001, 2470; 2007, 958)
NRS 645B.196 Liability of advertising spokesperson for mortgage broker for certain damages.
1. An advertising spokesperson for a mortgage broker is jointly and severally liable with the mortgage broker for damages caused by the mortgage broker by fraud, embezzlement, misappropriation of property, a violation of the provisions of this chapter or the regulations adopted pursuant thereto, or an action of the mortgage broker that is grounds for disciplinary action, if:
(a) The advertising spokesperson knew or should have known of the fraud, embezzlement, misappropriation of property, violation of the provisions of this chapter or the regulations adopted pursuant thereto, or action of the mortgage broker that is grounds for disciplinary action; or
(b) In advertising for the mortgage broker, the advertising spokesperson knew or should have known that:
(1) The conduct of the advertising spokesperson was likely to deceive, defraud or harm the public or any person who engaged in business with the mortgage broker; or
(2) The advertising spokesperson was disseminating material information concerning the mortgage broker or the business, products or services of the mortgage broker which was false or misleading.
2. As used in this section:
(a) “Advertising for a mortgage broker” means advertising or otherwise promoting a mortgage broker or the business, products or services of the mortgage broker using any medium of communication.
(b) “Advertising spokesperson for a mortgage broker” or “advertising spokesperson” means a person who consents to and receives compensation for using his name or likeness in advertising for a mortgage broker.
(Added to NRS by 2003, 3543)
LOAN PAYMENTS AND DEFAULTS
NRS 645B.240 Limitations on charging late fee, additional amount of interest or other penalty.
1. If a person is required to make a payment to a mortgage broker pursuant to the terms of a loan secured by a lien on real property, the mortgage broker may not charge the person a late fee, an additional amount of interest or any other penalty in connection with that payment if the payment is delivered to the mortgage broker before 5 p.m. on:
(a) The day that the payment is due pursuant to the terms of the loan, if an office of the mortgage broker is open to customers until 5 p.m. on that day; or
(b) The next day that an office of the mortgage broker is open to customers until 5 p.m., if the provisions of paragraph (a) do not otherwise apply.
2. A person and a mortgage broker or mortgage agent may not agree to alter or waive the provisions of this section by contract or other agreement, and any such contract or agreement is void and must not be given effect to the extent that it violates the provisions of this section.
(Added to NRS by 1999, 3773)
NRS 645B.250 Prohibition on advancing payments to investor on behalf of debtor in default; exceptions. Except pursuant to a contract for the collection or servicing of a loan which is governed by the requirements established by the Government National Mortgage Association, Federal Home Loan Mortgage Corporation or Federal National Mortgage Association, a mortgage broker or mortgage agent shall not advance payments to an investor on behalf of a person who has obtained a loan secured by a lien on real property and who has defaulted in his payments.
(Added to NRS by 1985, 2185; A 1989, 966; 1999, 3800)—(Substituted in revision for NRS 645B.191)
NRS 645B.260 Monthly report to Commissioner on delinquencies in payments and defaults; monthly notice to investors; regulations.
1. If a mortgage broker maintains any accounts described in subsection 4 of NRS 645B.175 in which the mortgage broker deposits payments from a debtor on a loan secured by a lien on real property and, on the last day of any month, the debtor has failed to make two or more consecutive payments in accordance with the terms of the loan, the mortgage broker shall:
(a) Include in the report that the mortgage broker submits to the Commissioner pursuant to subsection 2 of NRS 645B.080 the information relating to delinquencies in payments and defaults that is required by the regulations adopted pursuant to subsection 2;
(b) Not later than 15 days after the last day of each such month, mail to the last known address of each investor who owns a beneficial interest in the loan a notice containing the information relating to delinquencies in payments and defaults that is required by the regulations adopted pursuant to subsection 2; and
(c) Comply with the provisions of this section each month on a continuing basis until:
(1) The debtor or his designee remedies the delinquency in payments and any default; or
(2) The lien securing the loan is extinguished.
2. The Commissioner:
(a) Shall adopt regulations prescribing the information relating to delinquencies in payments and defaults that a mortgage broker must include in his report to the commissioner and in the notice mailed to investors pursuant to subsection 1. Such regulations may provide for variations between the information that a mortgage broker must include in his report to the Commissioner and the information that a mortgage broker must include in the notice mailed to investors.
(b) May adopt any other regulations that are necessary to carry out the provisions of this section.
(Added to NRS by 1999, 3773)
CONDITIONS AND LIMITATIONS ON CERTAIN MORTGAGE TRANSACTIONS
NRS 645B.300 Written appraisal of real property required; persons authorized to perform appraisal; retention and inspection of appraisal; exceptions.
1. Except as otherwise provided in subsection 4, a mortgage broker or mortgage agent shall not accept money from an investor to acquire ownership of or a beneficial interest in a loan secured by a lien on real property, unless the mortgage broker has obtained a written appraisal of the real property securing the loan.
2. The written appraisal of the real property:
(a) Must be performed by an appraiser who is authorized to perform appraisals in this State; and
(b) Must not be performed by the mortgage broker or a mortgage agent, unless the mortgage broker or mortgage agent is certified or licensed to perform such an appraisal pursuant to chapter 645C of NRS.
3. A copy of the written appraisal of the real property must be:
(a) Maintained at each office of the mortgage broker where money is accepted from an investor to acquire ownership of or a beneficial interest in a loan secured by a lien on the real property; and
(b) Made available during normal business hours for inspection by each such investor and the Commissioner.
4. A mortgage broker is not required to obtain a written appraisal of the real property pursuant to this section if the mortgage broker obtains a written waiver of the appraisal from each investor who acquires ownership of or a beneficial interest in a loan secured by a lien on the real property. A mortgage broker or mortgage agent shall not act as the attorney-in-fact or the agent of an investor with respect to the giving of a written waiver pursuant to this subsection.
5. As used in this section, “appraisal” has the meaning ascribed to it in NRS 645C.030.
(Added to NRS by 1999, 3772)
NRS 645B.305 Requirement that fee for servicing loan be specified in loan. A mortgage broker shall ensure that each loan secured by a lien on real property for which he engages in activity as a mortgage broker includes a fee for servicing the loan which must be specified in the loan. The fee must be in an amount reasonably necessary to pay the cost of servicing the loan.
(Added to NRS by 2007, 951)
NRS 645B.310 Requirements for mortgage broker to assign interest in loan. A mortgage broker shall not assign all or a part of his interest in a loan secured by a lien on real property, unless the mortgage broker:
1. Obtains a policy of title insurance for the real property;
2. Obtains the approval of the assignment from each investor who has acquired ownership of or a beneficial interest in the loan if, at the time of the assignment, the debtor on the loan has defaulted in making a payment required for the loan or any portion of the loan; and
3. Records the assignment in the office of the county recorder of the county in which the real property is located.
(Added to NRS by 1985, 2185; A 1999, 3800; 2007, 959)
NRS 645B.320 Copy of recorded deed of trust must be mailed to each investor. If money from an investor is released to a debtor or his designee pursuant to subsection 2 of NRS 645B.175 upon completion of a loan secured by a lien on real property, the mortgage broker that arranged the loan shall, not later than 3 business days after the date on which the mortgage broker receives a copy of the recorded deed of trust, mail to the last known address of each investor who owns a beneficial interest in the loan a copy of the recorded deed of trust.
(Added to NRS by 1999, 3773)
NRS 645B.330 Limitations on use of power of attorney.
1. A mortgage broker or mortgage agent shall not engage in any act or transaction on behalf of a private investor pursuant to a power of attorney unless:
(a) The power of attorney is executed for the sole purpose of providing services for not more than one specific loan in which the private investor owns a beneficial interest; and
(b) The provisions of the power of attorney:
(1) Have been approved by the Commissioner;
(2) Expressly prohibit the mortgage broker and his mortgage agents from engaging in any act or transaction that subordinates the priority of a recorded deed of trust unless, before such an act or transaction, the mortgage broker obtains written approval for the subordination from the private investor;
(3) Expressly prohibit the mortgage broker and his mortgage agents from using or releasing any money in which the private investor owns a beneficial interest with regard to the specific loan for a purpose that is not directly related to providing services for the loan unless, before any such money is used or released for another purpose, the mortgage broker obtains written approval from the private investor to use or release the money for the other purpose; and
(4) Expressly provide that the power of attorney is effective only for the term of the specific loan unless the mortgage broker obtains written approval from the private investor to extend the term of the power of attorney to provide services for not more than one other loan and the written approval:
(I) Identifies the loan for which the power of attorney was executed; and
(II) Identifies the loan for which the written approval is being given.
2. A mortgage broker or mortgage agent shall not act as the attorney-in-fact or the agent of a private investor with respect to the giving of written approval pursuant to paragraph (b) of subsection 1. A private investor and a mortgage broker or mortgage agent may not agree to alter or waive the provisions of this section by contract or other agreement. Any such contract or agreement is void and must not be given effect to the extent that it violates the provisions of this section.
3. Except as otherwise provided in subsection 4, a power of attorney which designates a mortgage broker or mortgage agent as the attorney-in-fact or the agent of a private investor and which violates the provisions of this section is void and must not be given effect with regard to any act or transaction that occurs on or after October 1, 1999, whether or not the power of attorney is or has been executed by the private investor before, on or after October 1, 1999.
4. The provisions of subsection 3 do not apply to a power of attorney that designates a mortgage broker or mortgage agent as the attorney-in-fact or the agent of a private investor if the power of attorney:
(a) Was executed before July 1, 2001; and
(b) Complied with the provisions of this section that were in effect on October 1, 1999.
5. The provisions of this section do not limit the right of a private investor to include provisions in a power of attorney that are more restrictive than the provisions set forth in subsection 1.
(Added to NRS by 1999, 3774; A 2001, 2471)
LICENSING AND REGULATION OF MORTGAGE AGENTS
NRS 645B.400 License required. A person shall not act as or provide any of the services of a mortgage agent or otherwise engage in, carry on or hold himself out as engaging in or carrying on the activities of a mortgage agent unless the person has a license as a mortgage agent issued pursuant to NRS 645B.410.
(Added to NRS by 2003, 3543)
NRS 645B.410 Qualifications and procedure for issuance of license; fees.
1. To obtain a license as a mortgage agent, a person must:
(a) Be a natural person;
(b) File a written application for a license as a mortgage agent with the Office of the Commissioner;
(c) Comply with the applicable requirements of this chapter; and
(d) Pay an application fee set by the Commissioner of not more than $185.
2. An application for a license as a mortgage agent must:
(a) State the name and residence address of the applicant;
(b) Include a provision by which the applicant gives his written consent to an investigation of his credit history, criminal history and background;
(c) Include a complete set of fingerprints which the Division may forward to the Central Repository for Nevada Records of Criminal History for submission to the Federal Bureau of Investigation for its report;
(d) Include a verified statement from the mortgage broker with whom the applicant will be associated that expresses the intent of that mortgage broker to associate the applicant with the mortgage broker and to be responsible for the activities of the applicant as a mortgage agent; and
(e) Include any other information or supporting materials required pursuant to the regulations adopted by the Commissioner or by an order of the Commissioner. Such information or supporting materials may include, without limitation, other forms of identification of the person.
3. Except as otherwise provided in this chapter, the Commissioner shall issue a license as a mortgage agent to an applicant if:
(a) The application is verified by the Commissioner and complies with the applicable requirements of this chapter; and
(b) The applicant:
(1) Has not been convicted of, or entered a plea of nolo contendere to, a felony relating to the practice of mortgage agents or any crime involving fraud, misrepresentation or moral turpitude;
(2) Has not had a financial services license suspended or revoked within the immediately preceding 10 years;
(3) Has not made a false statement of material fact on his application;
(4) Has not violated any provision of this chapter or chapter 645E of NRS, a regulation adopted pursuant thereto or an order of the Commissioner; and
(5) Has a good reputation for honesty, trustworthiness and integrity and displays competence to transact the business of a mortgage agent in a manner which safeguards the interests of the general public. The applicant must submit satisfactory proof of these qualifications to the Commissioner.
4. Money received by the Commissioner pursuant to this section must be deposited in the Fund for Mortgage Lending created by NRS 645F.270.
(Added to NRS by 2003, 3543; A 2007, 2853)
NRS 645B.420 Payment of child support: Submission of certain information by applicant; grounds for denial of license; duty of Commissioner. [Effective until the date of the repeal of the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings.]
1. In addition to any other requirements set forth in this chapter:
(a) An applicant for the issuance of a license as a mortgage agent pursuant to this chapter shall include the social security number of the applicant in the application submitted to the Commissioner.
(b) An applicant for the issuance or renewal of a license as a mortgage agent pursuant to this chapter shall submit to the Commissioner the statement prescribed by the Division of Welfare and Supportive Services of the Department of Health and Human Services pursuant to NRS 425.520. The statement must be completed and signed by the applicant.
2. The Commissioner shall include the statement required pursuant to subsection 1 in:
(a) The application or any other forms that must be submitted for the issuance or renewal of a license as a mortgage agent; or
(b) A separate form prescribed by the Commissioner.
3. The license as a mortgage agent may not be issued or renewed by the Commissioner if the applicant:
(a) Fails to submit the statement required pursuant to subsection 1; or
(b) Indicates on the statement submitted pursuant to subsection 1 that he is subject to a court order for the support of a child and is not in compliance with the order or a plan approved by the district attorney or other public agency enforcing the order for the repayment of the amount owed pursuant to the order.
4. If an applicant indicates on the statement submitted pursuant to subsection 1 that he is subject to a court order for the support of a child and is not in compliance with the order or a plan approved by the district attorney or other public agency enforcing the order for the repayment of the amount owed pursuant to the order, the Commissioner shall advise the applicant to contact the district attorney or other public agency enforcing the order to determine the actions that the applicant may take to satisfy the arrearage.
(Added to NRS by 2003, 3545; A 2005, 2785, 2817)
NRS 645B.420 Payment of child support: Submission of certain information by applicant; grounds for denial of license; duty of Commissioner. [Effective on the date of the repeal of the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings and expires by limitation 2 years after that date.]
1. In addition to any other requirements set forth in this chapter, an applicant for the issuance or renewal of a license as a mortgage agent pursuant to this chapter shall submit to the Commissioner the statement prescribed by the Division of Welfare and Supportive Services of the Department of Health and Human Services pursuant to NRS 425.520. The statement must be completed and signed by the applicant.
2. The Commissioner shall include the statement required pursuant to subsection 1 in:
(a) The application or any other forms that must be submitted for the issuance or renewal of a license as a mortgage agent; or
(b) A separate form prescribed by the Commissioner.
3. The license as a mortgage agent may not be issued or renewed by the Commissioner if the applicant:
(a) Fails to submit the statement required pursuant to subsection 1; or
(b) Indicates on the statement submitted pursuant to subsection 1 that he is subject to a court order for the support of a child and is not in compliance with the order or a plan approved by the district attorney or other public agency enforcing the order for the repayment of the amount owed pursuant to the order.
4. If an applicant indicates on the statement submitted pursuant to subsection 1 that he is subject to a court order for the support of a child and is not in compliance with the order or a plan approved by the district attorney or other public agency enforcing the order for the repayment of the amount owed pursuant to the order, the Commissioner shall advise the applicant to contact the district attorney or other public agency enforcing the order to determine the actions that the applicant may take to satisfy the arrearage.
(Added to NRS by 2003, 3545; A 2005, 2785, 2786, 2817, effective on the date of the repeal of the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings)
NRS 645B.430 Annual expiration of license; procedure for renewal; continuing education; fees.
1. A license as a mortgage agent issued pursuant to NRS 645B.410 expires 1 year after the date the license is issued, unless it is renewed. To renew a license as a mortgage agent, the holder of the license must submit to the Commissioner each year, on or before the date the license expires:
(a) An application for renewal;
(b) Except as otherwise provided in this section, satisfactory proof that the holder of the license as a mortgage agent attended at least 10 hours of certified courses of continuing education during the 12 months immediately preceding the date on which the license expires; and
(c) A renewal fee set by the Commissioner of not more than $170.
2. If the holder of the license as a mortgage agent fails to submit any item required pursuant to subsection 1 to the Commissioner each year on or before the date the license expires, the license is cancelled. The Commissioner may reinstate a cancelled license if the holder of the license submits to the Commissioner:
(a) An application for renewal;
(b) The fee required to renew the license pursuant to this section; and
(c) A reinstatement fee of $75.
3. To be issued a duplicate copy of a license as a mortgage agent, a person must make a satisfactory showing of its loss and pay a fee of $10.
4. To change the mortgage broker with whom the mortgage agent is associated, a person must pay a fee of $10.
5. Money received by the Commissioner pursuant to this section must be deposited in the Fund for Mortgage Lending created by NRS 645F.270.
6. The Commissioner may provide by regulation that any hours of a certified course of continuing education attended during a 12-month period, but not needed to satisfy a requirement set forth in this section for the 12-month period in which the hours were taken, may be used to satisfy a requirement set forth in this section for a later 12-month period.
7. As used in this section, “certified course of continuing education” has the meaning ascribed to it in NRS 645B.051.
(Added to NRS by 2003, 3544)
NRS 645B.450 Conditions and limitations regarding employment of or association with mortgage agent; duties of mortgage broker upon termination of mortgage agent.
1. A person licensed as a mortgage agent pursuant to the provisions of NRS 645B.410 may not be associated with or employed by more than one mortgage broker at the same time.
2. A mortgage broker shall not associate with or employ a person as a mortgage agent or authorize a person to be associated with the mortgage broker as a mortgage agent if the mortgage agent is not licensed with the Division pursuant to NRS 645B.410.
3. If a mortgage agent terminates his association or employment with a mortgage broker for any reason, the mortgage broker shall, not later than the third business day following the date of termination:
(a) Deliver to the mortgage agent or send by certified mail to the last known residence address of the mortgage agent a written statement which advises him that his termination is being reported to the Division; and
(b) Deliver or send by certified mail to the Division:
(1) The license or license number of the mortgage agent;
(2) A written statement of the circumstances surrounding the termination; and
(3) A copy of the written statement that the mortgage broker delivers or mails to the mortgage agent pursuant to paragraph (a).
(Added to NRS by 1999, 3769; A 2001, 2472; 2003, 2723, 2863, 3552)
NRS 645B.455 License issued on behalf of professional corporation or limited-liability company; limitations on license; automatic expiration of license.
1. Any natural person who meets the qualifications of a mortgage agent and:
(a) Except as otherwise provided in subsection 2, is the sole shareholder of a corporation organized pursuant to the provisions of chapter 89 of NRS; or
(b) Is the manager of a limited-liability company organized pursuant to the provisions of chapter 86 of NRS,
Ê may be licensed on behalf of the corporation or limited-liability company for the purpose of associating with a licensed mortgage broker in the capacity of a mortgage agent.
2. The spouse of the owner of the corporation who has a community interest in any shares of the corporation shall not be deemed a second shareholder of the corporation for the purposes of paragraph (a) of subsection 1, if the spouse does not vote any of those shares.
3. A license issued pursuant to this section entitles only the sole shareholder of the corporation or the manager of the limited-liability company to act as a mortgage agent, and only as an officer or agent of the corporation or limited-liability company and not on his own behalf. The licensee shall not do or deal in any act, acts or transactions included within the definition of a mortgage broker in NRS 645B.0127, except as that activity is permitted pursuant to this chapter to licensed mortgage agents.
4. The corporation or limited-liability company shall, within 30 days after a license is issued on its behalf pursuant to this section and within 30 days after any change in its ownership, file an affidavit with the Division stating:
(a) For a corporation, the number of issued and outstanding shares of the corporation and the names of all persons to whom the shares have been issued.
(b) For a limited-liability company, the names of members who have an interest in the company.
5. A license issued pursuant to this section automatically expires upon:
(a) The death of the licensed shareholder in the corporation or the manager of the limited-liability company; or
(b) The issuance of shares in the corporation to more than one person other than the spouse.
6. This section does not alter any of the rights, duties or liabilities which otherwise arise in the legal relationship between a mortgage broker or mortgage agent and a person who deals with him.
(Added to NRS by 2007, 21)
NRS 645B.460 Supervision by mortgage broker; requirements; regulations.
1. A mortgage broker shall exercise reasonable supervision over the activities of his mortgage agents. Such reasonable supervision must include, as appropriate:
(a) The establishment of written or oral policies and procedures for his mortgage agents; and
(b) The establishment of a system to review, oversee and inspect the activities of his mortgage agents, including, without limitation:
(1) Transactions handled by his mortgage agents pursuant to this chapter;
(2) Communications between his mortgage agents and a party to such a transaction;
(3) Documents prepared by his mortgage agents that may have a material effect upon the rights or obligations of a party to such a transaction; and
(4) The handling by his mortgage agents of any fee, deposit or money paid to the mortgage broker or his mortgage agents or held in trust by the mortgage broker or his mortgage agents pursuant to this chapter.
2. The Commissioner shall allow a mortgage broker to take into consideration the total number of mortgage agents associated with or employed by the mortgage broker when the mortgage broker determines the form and extent of the policies and procedures for those mortgage agents and the system to review, oversee and inspect the activities of those mortgage agents.
3. The Commissioner may adopt regulations prescribing standards for determining whether a mortgage broker has exercised reasonable supervision over the activities of a mortgage agent pursuant to this section.
(Added to NRS by 1999, 3769; A 2001, 2473)
RIGHTS OF BROKERS AND AGENTS DURING MILITARY SERVICE
NRS 645B.490 Right to be placed on inactive status; procedure for reinstatement.
1. Any mortgage broker or mortgage agent licensed under the provisions of this chapter who is called into the military service of the United States shall, at his request, be relieved from compliance with the provisions of this chapter and placed on inactive status for the period of such military service and for a period of 6 months after discharge therefrom.
2. At any time within 6 months after termination of such service, if the mortgage broker or mortgage agent complies with the provisions of subsection 1, the mortgage broker or mortgage agent may be reinstated, without having to meet any qualification or requirement other than the payment of the reinstatement fee, as provided in NRS 645B.050 or 645B.430, and the mortgage broker or mortgage agent is not required to make payment of the renewal fee for the current year.
3. Any mortgage broker or mortgage agent seeking to qualify for reinstatement, as provided in subsections 1 and 2, must present a certified copy of his honorable discharge or certificate of satisfactory service to the Commissioner.
(Added to NRS by 2003, 3545)
INVESTIGATION OF VIOLATIONS AND UNSAFE PRACTICES; REMEDIAL ACTION
NRS 645B.600 Person may file complaint alleging violation; requirements.
1. A person may file with the Commissioner a complaint alleging that another person has violated a provision of this chapter, a regulation adopted pursuant to this chapter or an order of the Commissioner.
2. A complaint filed pursuant to this section must:
(a) Be in writing;
(b) Be signed by the person filing the complaint or the authorized representative of the person filing the complaint;
(c) Contain an address and a telephone number for the person filing the complaint or the authorized representative of the person filing the complaint;
(d) Describe the nature of the alleged violation in as much detail as possible;
(e) Include as exhibits copies of all documentation supporting the complaint; and
(f) Include any other information or supporting materials required by the regulations adopted by the Commissioner or by an order of the Commissioner.
(Added to NRS by 1999, 3775; A 2001, 2474)
NRS 645B.610 Duties of Commissioner when complaint is filed.
1. If a person properly files a complaint with the Commissioner pursuant to NRS 645B.600, the Commissioner shall investigate each violation alleged in the complaint, unless the Commissioner has previously investigated the alleged violation.
2. Except as otherwise provided in subsection 2 of NRS 645B.090, if the Commissioner does not conduct an investigation of an alleged violation pursuant to subsection 1 because he previously has investigated the alleged violation, the Commissioner shall provide to the person who filed the complaint a written summary of the previous investigation and the nature of any disciplinary action that was taken as a result of the previous investigation.
3. If the Commissioner conducts an investigation of an alleged violation pursuant to subsection 1, the Commissioner shall determine from the investigation whether there is reasonable cause to believe that the person committed the alleged violation.
4. If, upon investigation, the Commissioner determines that there is not reasonable cause to believe that the person committed the alleged violation, the Commissioner shall provide the reason for his determination, in writing, to the person who filed the complaint and to the person alleged to have committed the violation.
5. Except as otherwise provided in subsection 6, if, upon investigation, the Commissioner determines that there is reasonable cause to believe that the person committed the alleged violation, the Commissioner shall:
(a) Schedule a hearing concerning the alleged violation;
(b) Mail to the last known address of the person who filed the complaint written notice that must include, without limitation:
(1) The date, time and place of the hearing; and
(2) A statement of each alleged violation that will be considered at the hearing; and
(c) By personal service in accordance with the Nevada Rules of Civil Procedure and any applicable provision of NRS, serve written notice of the hearing to the person alleged to have committed the violation. The written notice that is served pursuant to this paragraph must include, without limitation:
(1) The date, time and place of the hearing;
(2) A copy of the complaint and a statement of each alleged violation that will be considered at the hearing; and
(3) A statement informing the person that, pursuant to NRS 645B.760, if he fails to appear, without reasonable cause, at the hearing:
(I) He is guilty of a misdemeanor; and
(II) The Commissioner is authorized to conduct the hearing in his absence, draw any conclusions that the Commissioner deems appropriate from his failure to appear and render a decision concerning each alleged violation.
6. If the Commissioner enters into a written consent agreement settling or resolving the alleged violation, the Commissioner shall provide a copy of the written consent agreement to the person who filed the complaint.
7. The Commissioner may:
(a) Investigate and conduct a hearing concerning any alleged violation, whether or not a complaint has been filed.
(b) Hear and consider more than one alleged violation against a person at the same hearing.
(Added to NRS by 1999, 3775; A 2003, 3469)
NRS 645B.620 Duties of Commissioner when violation is suspected; referral of violations to Attorney General for criminal prosecution; civil action for injunctive relief.
1. Whether or not a complaint has been filed, the Commissioner shall investigate a mortgage broker, mortgage agent or other person if, for any reason, it appears that:
(a) The mortgage broker or mortgage agent is conducting business in an unsafe and injurious manner or in violation of any provision of this chapter, a regulation adopted pursuant to this chapter or an order of the Commissioner;
(b) The person is offering or providing any of the services of a mortgage broker or mortgage agent or otherwise engaging in, carrying on or holding himself out as engaging in or carrying on the business of a mortgage broker or mortgage agent without being appropriately licensed or exempt from licensing pursuant to the provisions of this chapter; or
(c) The person is violating any other provision of this chapter, a regulation adopted pursuant to this chapter or an order of the Commissioner.
2. If, upon investigation, the Commissioner has reasonable cause to believe that the mortgage broker, mortgage agent or other person has engaged in any conduct or committed any violation described in subsection 1:
(a) The Commissioner shall notify the Attorney General of the conduct or violation and, if applicable, the Commissioner shall immediately take possession of the property of the mortgage broker pursuant to NRS 645B.630; and
(b) The Attorney General shall, if appropriate:
(1) Investigate and prosecute the mortgage broker, mortgage agent or other person pursuant to NRS 645B.800; and
(2) Bring a civil action to:
(I) Enjoin the mortgage broker, mortgage agent or other person from engaging in the conduct, operating the business or committing the violation; and
(II) Enjoin any other person who has encouraged, facilitated, aided or participated in the conduct, the operation of the business or the commission of the violation, or who is likely to engage in such acts, from engaging in or continuing to engage in such acts.
3. If the Attorney General brings a civil action pursuant to subsection 2, the district court of any county of this State is hereby vested with the jurisdiction in equity to enjoin the conduct, the operation of the business or the commission of the violation and may grant any injunctions that are necessary to prevent and restrain the conduct, the operation of the business or the commission of the violation. During the pendency of the proceedings before the district court:
(a) The court may issue any temporary restraining orders as may appear to be just and proper;
(b) The findings of the Commissioner shall be deemed to be prima facie evidence and sufficient grounds, in the discretion of the court, for the ex parte issuance of a temporary restraining order; and
(c) The Attorney General may apply for and on due showing is entitled to have issued the court’s subpoena requiring forthwith the appearance of any person to:
(1) Produce any documents, books and records as may appear necessary for the hearing of the petition; and
(2) Testify and give evidence concerning the conduct complained of in the petition.
(Added to NRS by 1973, 1540; A 1983, 1705; 1987, 1882; 1999, 3790; 2003, 3554)
NRS 645B.630 Duties of Commissioner when unsafe condition or practice is suspected; seizure of property and assets of mortgage broker; duties of Attorney General.
1. In addition to any other action that is required or permitted pursuant to this chapter, if the Commissioner has reasonable cause to believe that:
(a) The assets or capital of a mortgage broker are impaired; or
(b) A mortgage broker is conducting business in an unsafe and injurious manner that may result in danger to the public,
Ê the Commissioner shall immediately take possession of all the property, business and assets of the mortgage broker that are located in this State and shall retain possession of them pending further proceedings provided for in this chapter.
2. If the licensee, the board of directors or any officer or person in charge of the offices of the mortgage broker refuses to permit the Commissioner to take possession of the property of the mortgage broker pursuant to subsection 1:
(a) The Commissioner shall notify the Attorney General; and
(b) The Attorney General shall immediately bring such proceedings as may be necessary to place the Commissioner in immediate possession of the property of the mortgage broker.
3. If the Commissioner takes possession of the property of the mortgage broker, the Commissioner shall:
(a) Make or have made an inventory of the assets and known liabilities of the mortgage broker;
(b) File one copy of the inventory in his office and one copy in the office of the clerk of the district court of the county in which the principal office of the mortgage broker is located and shall mail one copy to each stockholder, partner, officer, director or associate of the mortgage broker at his last known address; and
(c) If the mortgage broker maintains any accounts described in NRS 645B.175, not later than 5 business days after the date on which the Commissioner takes possession of the property of the mortgage broker, mail notice of his possession to the last known address of each person whose money is deposited in such an account or whose money was or should have been deposited in such an account during the preceding 12 months.
4. The clerk of the court with which the copy of the inventory is filed shall file it as any other case or proceeding pending in the court and shall give it a docket number.
(Added to NRS by 1973, 1541; A 1981, 1790; 1983, 1707; 1987, 1883; 1999, 3791)—(Substituted in revision for NRS 645B.150)
NRS 645B.640 Persons entitled to correct unsafe conditions and practices; effect of failure to correct; receivership and liquidation of assets.
1. If the Commissioner takes possession of the property of a mortgage broker pursuant to NRS 645B.630, the licensee, officers, directors, partners, associates or stockholders of the mortgage broker may, within 60 days after the date on which the Commissioner takes possession of the property, make good any deficit in the assets or capital of the mortgage broker or remedy any unsafe and injurious conditions or practices of the mortgage broker.
2. At the expiration of the 60-day period, if the deficiency in assets or capital has not been made good or the unsafe and injurious conditions or practices remedied, the Commissioner may apply to the court to be appointed receiver and proceed to liquidate the assets of the mortgage broker which are located in this State in the same manner as now provided by law for liquidation of a private corporation in receivership.
3. No other person may be appointed receiver by any court without first giving the Commissioner ample notice of his application.
4. The inventory made by the Commissioner and all claims filed by creditors are open at all reasonable times for inspection, and any action taken by the receiver upon any of the claims is subject to the approval of the court before which the cause is pending.
5. The expenses of the receiver and compensation of counsel, as well as all expenditures required in the liquidation proceedings, must be fixed by the Commissioner subject to the approval of the court and, upon certification of the Commissioner, must be paid out of the money in his hands as the receiver.
(Added to NRS by 1973, 1542; A 1983, 1707; 1987, 1884; 1999, 3792)—(Substituted in revision for NRS 645B.160)
DISCIPLINARY ACTION
NRS 645B.670 Authorized disciplinary action; grounds for disciplinary action. Except as otherwise provided in NRS 645B.690:
1. For each violation committed by an applicant for a license issued pursuant to this chapter, whether or not he is issued a license, the Commissioner may impose upon the applicant an administrative fine of not more than $10,000, if the applicant:
(a) Has knowingly made or caused to be made to the Commissioner any false representation of material fact;
(b) Has suppressed or withheld from the Commissioner any information which the applicant possesses and which, if submitted by him, would have rendered the applicant ineligible to be licensed pursuant to the provisions of this chapter; or
(c) Has violated any provision of this chapter, a regulation adopted pursuant to this chapter or an order of the Commissioner in completing and filing his application for a license or during the course of the investigation of his application for a license.
2. For each violation committed by a mortgage broker, the Commissioner may impose upon the mortgage broker an administrative fine of not more than $10,000, may suspend, revoke or place conditions upon his license, or may do both, if the mortgage broker, whether or not acting as such:
(a) Is insolvent;
(b) Is grossly negligent or incompetent in performing any act for which he is required to be licensed pursuant to the provisions of this chapter;
(c) Does not conduct his business in accordance with law or has violated any provision of this chapter, a regulation adopted pursuant to this chapter or an order of the Commissioner;
(d) Is in such financial condition that he cannot continue in business with safety to his customers;
(e) Has made a material misrepresentation in connection with any transaction governed by this chapter;
(f) Has suppressed or withheld from a client any material facts, data or other information relating to any transaction governed by the provisions of this chapter which the mortgage broker knew or, by the exercise of reasonable diligence, should have known;
(g) Has knowingly made or caused to be made to the Commissioner any false representation of material fact or has suppressed or withheld from the Commissioner any information which the mortgage broker possesses and which, if submitted by him, would have rendered the mortgage broker ineligible to be licensed pursuant to the provisions of this chapter;
(h) Has failed to account to persons interested for all money received for a trust account;
(i) Has refused to permit an examination by the Commissioner of his books and affairs or has refused or failed, within a reasonable time, to furnish any information or make any report that may be required by the Commissioner pursuant to the provisions of this chapter or a regulation adopted pursuant to this chapter;
(j) Has been convicted of, or entered a plea of nolo contendere to, a felony relating to the practice of mortgage brokers or any crime involving fraud, misrepresentation or moral turpitude;
(k) Has refused or failed to pay, within a reasonable time, any fees, assessments, costs or expenses that the mortgage broker is required to pay pursuant to this chapter or a regulation adopted pursuant to this chapter;
(l) Has failed to satisfy a claim made by a client which has been reduced to judgment;
(m) Has failed to account for or to remit any money of a client within a reasonable time after a request for an accounting or remittal;
(n) Has commingled the money or other property of a client with his own or has converted the money or property of others to his own use;
(o) Has engaged in any other conduct constituting a deceitful, fraudulent or dishonest business practice;
(p) Has repeatedly violated the policies and procedures of the mortgage broker;
(q) Has failed to exercise reasonable supervision over the activities of a mortgage agent as required by NRS 645B.460;
(r) Has instructed a mortgage agent to commit an act that would be cause for the revocation of the license of the mortgage broker, whether or not the mortgage agent commits the act;
(s) Has employed a person as a mortgage agent or authorized a person to be associated with the mortgage broker as a mortgage agent at a time when the mortgage broker knew or, in light of all the surrounding facts and circumstances, reasonably should have known that the person:
(1) Had been convicted of, or entered a plea of nolo contendere to, a felony relating to the practice of mortgage agents or any crime involving fraud, misrepresentation or moral turpitude; or
(2) Had a financial services license or registration suspended or revoked within the immediately preceding 10 years;
(t) Has failed to pay a tax as required pursuant to the provisions of chapter 363A of NRS; or
(u) Has not conducted verifiable business as a mortgage broker for 12 consecutive months, except in the case of a new applicant. The Commissioner shall determine whether a mortgage broker is conducting business by examining the monthly reports of activity submitted by the mortgage broker or by conducting an examination of the mortgage broker.
3. For each violation committed by a mortgage agent, the Commissioner may impose upon the mortgage agent an administrative fine of not more than $10,000, may suspend, revoke or place conditions upon his license, or may do both, if the mortgage agent, whether or not acting as such:
(a) Is grossly negligent or incompetent in performing any act for which he is required to be licensed pursuant to the provisions of this chapter;
(b) Has made a material misrepresentation in connection with any transaction governed by this chapter;
(c) Has suppressed or withheld from a client any material facts, data or other information relating to any transaction governed by the provisions of this chapter which the mortgage agent knew or, by the exercise of reasonable diligence, should have known;
(d) Has knowingly made or caused to be made to the Commissioner any false representation of material fact or has suppressed or withheld from the Commissioner any information which the mortgage agent possesses and which, if submitted by him, would have rendered the mortgage agent ineligible to be licensed pursuant to the provisions of this chapter;
(e) Has been convicted of, or entered a plea of nolo contendere to, a felony relating to the practice of mortgage agents or any crime involving fraud, misrepresentation or moral turpitude;
(f) Has failed to account for or to remit any money of a client within a reasonable time after a request for an accounting or remittal;
(g) Has commingled the money or other property of a client with his own or has converted the money or property of others to his own use;
(h) Has engaged in any other conduct constituting a deceitful, fraudulent or dishonest business practice;
(i) Has repeatedly violated the policies and procedures of the mortgage broker with whom he is associated or by whom he is employed; or
(j) Has violated any provision of this chapter, a regulation adopted pursuant to this chapter or an order of the Commissioner or has assisted or offered to assist another person to commit such a violation.
(Added to NRS by 1973, 1539; A 1977, 93; 1981, 1790; 1983, 1380, 1704; 1985, 2188; 1987, 1880; 1993, 498; 1999, 3787; 2001, 2474; 2003, 2724, 3555; 2003, 20th Special Session, 221, 258)
NRS 645B.680 Suspension of license for failure to pay child support or comply with certain subpoenas or warrants; reinstatement of license. [Effective until 2 years after the date of the repeal of the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings.]
1. If the Commissioner receives a copy of a court order issued pursuant to NRS 425.540 that provides for the suspension of all professional, occupational and recreational licenses, certificates and permits issued to a person who is the holder of a license as a mortgage broker or mortgage agent, the Commissioner shall deem the license issued to that person to be suspended at the end of the 30th day after the date on which the court order was issued unless the Commissioner receives a letter issued to the holder of the license by the district attorney or other public agency pursuant to NRS 425.550 stating that the holder of the license has complied with the subpoena or warrant or has satisfied the arrearage pursuant to NRS 425.560.
2. The Commissioner shall reinstate a license as a mortgage broker or mortgage agent that has been suspended by a district court pursuant to NRS 425.540 if the Commissioner receives a letter issued by the district attorney or other public agency pursuant to NRS 425.550 to the person whose license was suspended stating that the person whose license was suspended has complied with the subpoena or warrant or has satisfied the arrearage pursuant to NRS 425.560.
(Added to NRS by 1997, 2171; A 1999, 3789; 2003, 3556; 2005, 2807, 2810, 2817)
NRS 645B.690 Duty of Commissioner to take disciplinary action for certain violations.
1. If a person offers or provides any of the services of a mortgage broker or mortgage agent or otherwise engages in, carries on or holds himself out as engaging in or carrying on the business of a mortgage broker or mortgage agent and, at the time:
(a) The person was required to have a license pursuant to this chapter and the person did not have such a license; or
(b) The person’s license was suspended or revoked pursuant to this chapter,
Ê the Commissioner shall impose upon the person an administrative fine of not more than $10,000 for each violation and, if the person has a license, the Commissioner shall revoke it.
2. If a mortgage broker violates any provision of subsection 1 of NRS 645B.080 and the mortgage broker fails, without reasonable cause, to remedy the violation within 20 business days after being ordered by the Commissioner to do so or within such later time as prescribed by the Commissioner, or if the Commissioner orders a mortgage broker to provide information, make a report or permit an examination of his books or affairs pursuant to this chapter and the mortgage broker fails, without reasonable cause, to comply with the order within 20 business days or within such later time as prescribed by the Commissioner, the Commissioner shall:
(a) Impose upon the mortgage broker an administrative fine of not more than $10,000 for each violation;
(b) Suspend or revoke the license of the mortgage broker; and
(c) Conduct a hearing to determine whether the mortgage broker is conducting business in an unsafe and injurious manner that may result in danger to the public and whether it is necessary for the Commissioner to take possession of the property of the mortgage broker pursuant to NRS 645B.630.
(Added to NRS by 1999, 3776; A 2003, 3557)
NRS 645B.700 Categorization of major and minor violations; regulations.
1. Except as otherwise provided in subsection 2, for each violation that may be committed by a person pursuant to this chapter or the regulations adopted pursuant to this chapter, the Commissioner may adopt regulations:
(a) Categorizing the violation as a major violation or a minor violation; and
(b) Specifying the disciplinary action that will be taken by the Commissioner pursuant to this chapter against a person who commits:
(1) A major violation. The disciplinary action taken by the Commissioner for a major violation may include, without limitation, suspension or revocation of the person’s license.
(2) More than two minor violations. The Commissioner may establish graduated sanctions for a person who commits more than two minor violations based upon the number, the frequency and the severity of the minor violations and whether the person previously has committed any major violations.
2. The provisions of this section do not apply to a violation for which the Commissioner is required to take disciplinary action in accordance with NRS 645B.690.
(Added to NRS by 1999, 3777; A 2001, 2476)
NRS 645B.710 Act or omission of partner, officer or director deemed act or omission of partnership, corporation or unincorporated association. If a person is a partnership, corporation or unincorporated association, the Commissioner shall take any disciplinary action required pursuant to NRS 645B.690 and may take any other disciplinary action set forth in this chapter against the person if any member of the partnership or any officer or director of the corporation or unincorporated association has committed any act or omission that would be cause for taking such disciplinary action against a natural person.
(Added to NRS by 1999, 3777)
NRS 645B.720 Authority of Commissioner to order summary suspension of license and take other action to protect public before conducting hearing. Before conducting a hearing, the Commissioner may, to the fullest extent permitted by the Constitution of the United States and the Constitution of this State:
1. Order a summary suspension of a license pursuant to subsection 3 of NRS 233B.127; and
2. Take any other action against a licensee or other person that is necessary to protect the health, safety or welfare of the public.
(Added to NRS by 1999, 3777)
HEARINGS; APPEALS
NRS 645B.750 Duty of Commissioner to provide written notice of disciplinary action or denial of license; right to administrative hearing; entry of final order; appeals.
1. If the Commissioner enters an order taking any disciplinary action against a person or denying a person’s application for a license, the Commissioner shall cause a written notice of the order to be served personally or sent by certified mail or telegram to the person.
2. Unless a hearing has already been conducted concerning the matter, the person, upon application, is entitled to a hearing. If the person does not make such an application within 20 days after the date of the initial order, the Commissioner shall enter a final order concerning the matter.
3. A person may appeal a final order of the Commissioner in accordance with the provisions of chapter 233B of NRS that apply to a contested case.
(Added to NRS by 1973, 1539; A 1983, 1705; 1987, 1881; 1999, 3789; 2003, 984)
NRS 645B.760 Effect of failure to appear at hearing; penalty. If a person is alleged to have engaged in any conduct or committed any violation that is described in NRS 645B.620, 645B.630 or 645B.670 or is alleged to have committed a violation of any other provision of this chapter, a regulation adopted pursuant to this chapter or an order of the Commissioner, and the person fails to appear, without reasonable cause, at a hearing before the Commissioner concerning the alleged conduct or violation:
1. The Commissioner shall notify the Attorney General that the person failed to appear;
2. The person is guilty of a misdemeanor and shall be punished as provided in NRS 645B.950; and
3. The Commissioner may conduct the hearing in the person’s absence, draw any conclusions that the Commissioner deems appropriate from his failure to appear and render a decision concerning the alleged conduct or violation.
(Added to NRS by 1999, 3777)
ENFORCEMENT BY ATTORNEY GENERAL
NRS 645B.800 Attorney General has primary criminal jurisdiction; duty to provide Attorney General with information to assist prosecution; penalty.
1. The Attorney General has primary jurisdiction for the enforcement of this chapter. The Attorney General shall, if appropriate, investigate and prosecute a person who violates:
(a) Any provision of this chapter, a regulation adopted pursuant to this chapter or an order of the Commissioner, including, without limitation, a violation of any provision of NRS 645B.620 or 645B.670; or
(b) Any other law or regulation if the violation is committed by the person in the course of committing a violation described in paragraph (a).
2. The Attorney General shall, if appropriate, investigate and prosecute a person who is alleged to have committed a violation described in subsection 1 whether or not:
(a) The Commissioner notifies the Attorney General of the alleged violation;
(b) The Commissioner takes any disciplinary action against the person alleged to have committed the violation;
(c) Any other person files a complaint against the person alleged to have committed the violation; or
(d) A civil action is commenced against the person alleged to have committed the violation.
3. When acting pursuant to this section, the Attorney General may commence his investigation and file a criminal action without leave of court, and the Attorney General has exclusive charge of the conduct of the prosecution.
4. Except as otherwise provided by the Constitution of the United States, the Constitution of this State or a specific statute, a person shall, if requested, provide the Attorney General with information that would assist in the prosecution of any other person who is alleged to have committed a violation described in subsection 1. If a person fails, without reasonable cause, to provide the Attorney General with such information upon request, the person is guilty of a misdemeanor and shall be punished as provided in NRS 645B.950.
(Added to NRS by 1999, 3778)
NRS 645B.810 Attorney General may bring civil action; recovery of costs in civil action.
1. The Attorney General may bring any appropriate civil action against a person to enforce any provision of this chapter, a regulation adopted pursuant to this chapter or an order of the Commissioner, including, without limitation, an order of the Commissioner:
(a) Imposing an administrative fine; or
(b) Suspending, revoking or placing conditions upon a license.
2. If the Attorney General prevails in any civil action brought pursuant to this chapter, the court shall order the person against whom the civil action was brought to pay:
(a) Court costs; and
(b) Reasonable costs of the investigation and prosecution of the civil action.
3. Whether or not the Attorney General brings a civil action against a person pursuant to this chapter, the Attorney General may prosecute the person for a criminal violation pursuant to this chapter.
(Added to NRS by 1999, 3778)
ADVISORY COUNCIL ON MORTGAGE INVESTMENTS AND MORTGAGE LENDING
NRS 645B.860 Creation; members; appointment; terms and vacancies; no compensation or per diem allowance; protections afforded members who are public officers or employees.
1. The Advisory Council on Mortgage Investments and Mortgage Lending is hereby created.
2. The Advisory Council consists of five members appointed by the Legislative Commission from a list of persons provided by the Commissioner.
3. The members of the Advisory Council:
(a) Must be persons who have experience with, an interest in or a knowledge of issues relating to mortgage investments or mortgage lending. Such persons may include, without limitation, investors, public officers and employees, licensees and persons who have engaged in or been involved with any business, profession or occupation relating to mortgage investments or mortgage lending.
(b) Serve terms of 2 years and at the pleasure of the Legislative Commission.
(c) May be reappointed.
(d) Serve without compensation and may not receive a per diem allowance or travel expenses.
4. Any vacancy in the membership of the Advisory Council must be filled for the remainder of the unexpired term in the same manner as the original appointment.
5. A member of the Advisory Council who is an officer or employee of this State or a political subdivision of this State must be relieved from his duties without loss of his regular compensation so that he may prepare for and attend meetings of the Advisory Council and perform any work necessary to carry out the duties of the Advisory Council in the most timely manner practicable. A state agency or political subdivision of this State shall not require an officer or employee who is a member of the Advisory Council to make up the time he is absent from work to carry out his duties as a member of the Advisory Council or use annual vacation or compensatory time for the absence.
6. Notwithstanding any other provision of law, a member of the Advisory Council:
(a) Is not disqualified from public employment or holding a public office because of his membership on the Advisory Council; and
(b) Does not forfeit his public office or public employment because of his membership on the Advisory Council.
(Added to NRS by 1999, 3766)
NRS 645B.865 Chairman and Vice Chairman; meetings; quorum; subcommittees.
1. The members of the Advisory Council on Mortgage Investments and Mortgage Lending shall elect a Chairman and a Vice Chairman from among their membership. The Vice Chairman shall perform the duties of the Chairman during any absence of the Chairman.
2. The Advisory Council may meet at least once each calendar quarter and at other times on the call of the Chairman or a majority of its members.
3. The meetings of the Advisory Council may be held at any location designated by the Chairman or a majority of its members.
4. A majority of the members of the Advisory Council constitutes a quorum for the transaction of all business.
5. The Chairman may appoint subcommittees of the members of the Advisory Council to consider specific problems relating to mortgage investments or mortgage lending.
(Added to NRS by 1999, 3767)
NRS 645B.870 Purpose. The purpose of the Advisory Council on Mortgage Investments and Mortgage Lending is to:
1. Consult with, advise and make recommendations to the Commissioner in all matters relating to mortgage investments and mortgage lending.
2. Make recommendations to the Legislature concerning the enactment of any legislation relating to mortgage investments and mortgage lending.
3. Make recommendations to the Legislature and the Commissioner concerning educational requirements and other qualifications for persons who are engaged in any business, profession or occupation relating to mortgage investments and mortgage lending.
4. Conduct hearings, conferences and special studies on all matters relating to mortgage investments and mortgage lending.
5. Provide a forum for the consideration and discussion of all matters relating to mortgage investments and mortgage lending.
6. Gather and disseminate information relating to mortgage investments and mortgage lending.
7. Engage in other activities that are designed to promote, improve and protect the reliability and stability of mortgage investments and mortgage lending in this State.
(Added to NRS by 1999, 3767)
UNLAWFUL ACTS; PENALTIES
NRS 645B.900 Unlawful to conduct business of mortgage broker or mortgage agent without being licensed or exempt from licensing. It is unlawful for any person to offer or provide any of the services of a mortgage broker or mortgage agent or otherwise to engage in, carry on or hold himself out as engaging in or carrying on the business of a mortgage broker or mortgage agent without first obtaining the applicable license issued pursuant to this chapter, unless the person:
1. Is exempt from the provisions of this chapter; and
2. Complies with the requirements for that exemption.
(Added to NRS by 1973, 1536; A 1981, 1792; 1999, 3801; 2003, 3558)
NRS 645B.910 Unlawful for foreign corporation, association or business trust to conduct business of mortgage broker without meeting certain requirements. It is unlawful for any foreign corporation, association or business trust to conduct any business as a mortgage broker within this State, unless it:
1. Qualifies under chapter 80 of NRS; and
2. Complies with the provisions of this chapter or, if it claims an exemption from the provisions of this chapter, complies with the requirements for that exemption.
(Added to NRS by 1973, 1542; A 1999, 3801)—(Substituted in revision for NRS 645B.220)
NRS 645B.950 Penalties for general violations.
1. Except as otherwise provided in NRS 645B.960, a person, or any general partner, director, officer, agent or employee of a person, who violates any provision of this chapter, a regulation adopted pursuant to this chapter or an order of the Commissioner is guilty of a misdemeanor.
2. In addition to any other penalty, if a person is convicted of or enters a plea of nolo contendere to a violation described in subsection 1, the court shall order the person to pay:
(a) Court costs; and
(b) Reasonable costs of the investigation and prosecution of the violation.
(Added to NRS by 1973, 1543; A 1981, 1792; 1999, 3802)—(Substituted in revision for NRS 645B.230)
NRS 645B.960 Penalties for violations relating to escrow or trust accounts.
1. A person, or any general partner, director, officer, agent or employee of a person, who violates any provision of NRS 645B.165 to 645B.180, inclusive, is guilty of:
(a) A misdemeanor if the amount involved is less than $250;
(b) A gross misdemeanor if the amount involved is $250 or more but less than $1,000; or
(c) A category D felony if the amount involved is $1,000 or more, and shall be punished as provided in NRS 193.130.
2. In addition to any other penalty, if a person is convicted of or enters a plea of nolo contendere to a violation described in subsection 1, the court shall order the person to pay:
(a) Court costs; and
(b) Reasonable costs of the investigation and prosecution of the violation.
(Added to NRS by 1981, 1785; A 1985, 2191; 1989, 1442; 1995, 1313; 1999, 3801)—(Substituted in revision for NRS 645B.225)
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