04 NCAC 03M .0205. FINANCIAL RESPONSIBILITY

(a)  In order for applicants to be deemed to have the financial responsibility such as to command the confidence of the community and to warrant belief that the business will be operated honestly and fairly under G.S. 53-244.60(4), the applicant shall:

(1)           If a mortgage lender:

(A)          provide an audited statement of financial condition that demonstrates a net worth of at least $100,000;

(B)          provide evidence of warehouse line of credit of $1,000,000 or other evidence of funding capacity to conduct mortgage originations;

(C)          demonstrate a history of satisfying debt obligations, as indicated by a trade or personal credit report(s) that does not contain evidence of outstanding judgments or tax liens against applicant, its officers or directors, by creditors; and

(D)          provide an explanation of the corporate or ownership structure of the applicant, including information regarding any required distributions to investors or owners.

(2)           If a mortgage broker:

(A)          provide a certified statement of financial condition that demonstrates a net worth of at least $25,000;

(B)          demonstrate a history of satisfying debt obligations, as indicated by a trade or personal credit report(s) that does not contain evidence of outstanding judgments or tax liens against applicant, its officers or directors, by creditors; and

(C)          provide evidence (in the form of a copy of a bank statement or other verifiable document) that the broker owns and holds on a continual basis cash or other liquid assets in a demand deposit account under the firm's name of at least ten thousand dollars ($10,000.00) in an FDIC-insured financial institution.

(3)           If a mortgage loan originator:

(A)          have a credit score from any of the three major credit rating agencies (Experian, TransUnion or Equifax) of 600 or greater;

(B)          demonstrate a history of satisfying debt obligations, as indicated by an absence of outstanding tax liens, other government liens or filings, outstanding judgments, except judgments resulting solely from medical expenses, by creditors; and

(C)          not have any foreclosures or accounts delinquent in excess of 90-days within the past three years.

(4)           If a mortgage servicer:

(A)          provide an audited statement of financial condition that demonstrates a net worth of at least $100,000.00;

(B)          demonstrate a history of satisfying debt obligations, as indicated by a trade or personal credit report(s) that does not contain evidence of outstanding judgments or tax liens against applicant, its officers or directors, by creditors; and

(C)          provide an explanation of the corporate or ownership structure of the applicant, including information regarding any required distributions to investors or owners.

(b)  The Commissioner shall not waive any requirement listed in Paragraph (a) of this Rule unless he believes the predominant weight of the evidence supports a determination that the applicant has the financial responsibility necessary to command the confidence of the community and to warrant belief that the business will be operated honestly and fairly.

(c)  Financial Responsibility is an ongoing requirement and upon issuance of a license, a licensee must continue to meet the requirements of Paragraph (a) of this Rule.

 

History Note:        Authority G.S. 53-92; 53-104; 53-244.060(4); 53-244.118;

Eff. July 18, 2008;

Amended Eff. July 1, 2010.