NAC: CHAPTER 645B - MORTGAGE BROKERS AND MORTGAGE AGENTS

[Rev. 1/12/2009 9:42:52 AM]

CHAPTER 645B - MORTGAGE BROKERS AND MORTGAGE AGENTS

GENERAL PROVISIONS

645B.001 Definitions.

645B.002 “Affiliated business” defined.

645B.004 “Major violation” defined.

645B.006 “Minor violation” defined.

645B.008 “Qualified employee” defined.

645B.009 Deposits, disclosures and appraisals: Interpretation of certain statutory terms.

LICENSING AND OFFICES OF MORTGAGE BROKERS

645B.010 Qualifications of applicant for license.

645B.015 Activity constituting verifiable business; submission of evidence of activity.

645B.017 Activity not constituting services as mortgage broker.

645B.020 Documentation required with application for license; compliance with requirements of letter of conditional approval.

645B.030 Branch office: Prerequisites and name for issuance of license; display of license; responsibilities of mortgage broker.

645B.032 Sharing office space with another business.

645B.035 Use of fictitious name.

645B.037 Use of same name, confusingly similar name or name not approved by Division.

CERTIFICATE OF EXEMPTION

645B.045 Unexpired certificate.

SUPERVISION BY COMMISSIONER

General Provisions

645B.055 Qualified employee: Designation; approval.

645B.057 Change in ownership, control, management, principal employees or principal or branch office.

645B.060 Fee for supervision and related activities: Amount; collection; failure to pay; accounting of time billed.

Examinations, Audits and Investigations

645B.064 Assessment for costs related to audits and examinations.

645B.066 Authority of examiner, auditor or investigator.

645B.067 Rating of mortgage broker upon completion of examination.

645B.068 Results of examination: Preparation and review of draft report; final report; confidentiality; action by Commissioner.

Records and Reports

645B.070 Monthly reports.

645B.072 “Complete and suitable records” interpreted.

645B.073 Documentation for action on behalf of investors when beneficial interest belongs to more than one natural person.

645B.077 Retention and maintenance of certain records.

645B.080 Provision and retention of certain documents.

Net Worth

645B.095 Determination by Commissioner.

ESCROW AND TRUST ACCOUNTS

645B.150 Money received to acquire loans: Required statements and ledgers.

645B.160 Money received to repay loans: Required statements and records.

645B.170 Money received to acquire or repay loans: Period for retention of records.

DISCLOSURES AND ADVERTISING

645B.210 Disclosure of involvement.

645B.215 Disclosures to purchaser of note secured by deed of trust; retention of documents.

645B.220 Disclosure to investors: Form; execution of form by corporate investor.

645B.230 Provision to Division of financial statement for investors.

645B.235 Disclosures to borrowers by certain persons acting in dual capacity.

645B.240 Representation of activity as licensed; advertisements; disclosure to investors; Internet links.

CONDITIONS AND LIMITATIONS ON CERTAIN MORTGAGE TRANSACTIONS

645B.250 Prohibition against acting as trustee or substitute trustee under certain circumstances; exception.

645B.260 Decisions regarding investments.

645B.270 Standards for appraisals.

645B.280 Power of attorney: Submission to and action by Commissioner; maintenance of written communications; extension of term; inclusion of date of approval.

645B.290 Power of attorney: Form.

LICENSING AND REGULATION OF MORTGAGE AGENTS

645B.300 Application for licensing; association with or employment by mortgage broker; investigation of background; effective date and invalidation of license; confidentiality of certain documents.

645B.310 Determination by Commissioner of adequate supervision of mortgage agent by mortgage broker.

ENFORCEMENT

645B.320 Complaint alleging violation.

645B.330 Referral of certain suspected violations for investigation and action; grounds for disciplinary action.

645B.340 Order to cease and desist from certain activities.

645B.350 Suspension or revocation of license for major violation.

CONTINUING EDUCATION

645B.360 Designation of agencies to certify courses.

645B.365 Prerequisites to receipt of credit for course.

GENERAL PROVISIONS

NAC 645B.001 Definitions. (NRS 645B.060) As used in this chapter, unless the context otherwise requires, the words and terms defined in NRS 645B.0105 to 645B.0135, inclusive, and NAC 645B.002 to 645B.008, inclusive, have the meanings ascribed to them in those sections.

(Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004)

NAC 645B.002 “Affiliated business” defined. (NRS 645B.060)

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

(a) Directly or indirectly owns or controls a controlling interest of the business;

(b) Is a partner, officer, director or trustee of the business; or

2. As used in this section, “controlling interest” means a majority of the voting stock of a business or any other interest in a business that gives the holder of the interest the power to direct the management or to determine the policy of the business.

(Added to NAC by Comm’r of Mortgage Lending by R087-04, eff. 8-31-2004)

NAC 645B.004 “Major violation” defined. (NRS 645B.060, 645B.700) “Major violation” means a violation of the provisions of this chapter or chapter 645B of NRS:

1. Which causes substantial loss or harm to any person or which, in the opinion of the Commissioner, could have caused substantial loss or harm to any person;

2. For which the Commissioner has taken disciplinary action repeatedly, except a violation for the late filing of required reports, financial statements or fees that the Commissioner considers to be a minor violation; or

3. Which, in the opinion of the Commissioner, was the result of willful misconduct or indifference to the obligations of the mortgage broker pursuant to this chapter or chapter 645B of NRS.

(Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000)

NAC 645B.006 “Minor violation” defined. (NRS 645B.060, 645B.700) “Minor violation” means any violation that is not a major violation.

(Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000)

NAC 645B.008 “Qualified employee” defined. (NRS 645B.060) “Qualified employee” means:

1. A director, officer, member, employee, manager or trustee of a partnership, corporation or limited-liability company designated by the partnership, corporation or limited-liability company pursuant to NAC 645B.055 to act on the behalf of the partnership, corporation or limited-liability company; or

2. A person designated by a sole proprietorship who satisfies the requirements set forth in subsection 3 of NRS 645B.020 and NAC 645B.010 and 645B.055.

(Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000)

NAC 645B.009 Deposits, disclosures and appraisals: Interpretation of certain statutory terms. (NRS 645B.060, 645B.175, 645B.185, 645B.300)

1. The Commissioner will not consider escrow instructions to have been “approved by the parties” within the meaning of subparagraph (2) of paragraph (a) of subsection 1 of NRS 645B.175 if the instructions:

(a) Are signed by the mortgage broker as attorney-in-fact for any investor with an interest in the loan; and

(b) Direct that all money relating to the transaction, except money for charges or fees due the mortgage broker, be paid to an owner, partner, director, officer, manager, member or employee of the mortgage broker or a relative of an owner, partner, director, officer, manager, member or employee of the mortgage broker.

2. The Commissioner will consider “money paid to a mortgage broker and his mortgage agents by a person in full or in partial payment of a loan” within the meaning of subsection 4 of NRS 645B.175 to include money paid to a mortgage broker or his mortgage agents by a person pursuant to written escrow instructions if the payment represents money paid in full or in partial repayment of a loan secured by a lien on real property.

3. The Commissioner will consider a mortgage broker or mortgage agent to “accept money from an investor to acquire ownership of or a beneficial interest in a loan secured by a lien on real property” within the meaning of NRS 645B.185 and 645B.300 if the mortgage broker or mortgage agent:

(a) Receives money from an investor to acquire ownership of or a beneficial interest in a loan secured by a lien on real property; or

(b) Arranges for the investor to pay money to a third party to invest in a loan secured by a lien on real property.

(Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004)—(Substituted in revision for part of NAC 645B.220)

LICENSING AND OFFICES OF MORTGAGE BROKERS

NAC 645B.010 Qualifications of applicant for license. (NRS 645B.020, 645B.060) An applicant for a license as a mortgage broker must have:

1. At least 2 years of verifiable experience in lending money for real estate or mortgages; and

2. A knowledge of generally accepted accounting practices and bookkeeping procedures evidenced by verifiable experience in working in these areas or appropriate educational training, or both.

[Comm’r of Savings Associations, Mortgage Reg. § 1, eff. 6-29-82]—(NAC A by Comm’r of Financial Institutions, 9-1-94; R045-00, 9-5-2000)

NAC 645B.015 Activity constituting verifiable business; submission of evidence of activity. (NRS 645B.060, 645B.080)

1. A person conducts verifiable business as a mortgage broker if he is compensated on a commission or percentage basis for:

(a) Handling the arrangements between a borrower and a lender for a loan which is secured by a lien on real property and is consummated as a result of such arrangements;

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

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

(Added to NAC by Admstr. of Financial Institutions, eff. 12-15-86; A by Comm’r of Financial Institutions by R045-00, 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004)

NAC 645B.017 Activity not constituting services as mortgage broker. (NRS 645B.060) A person does not hold himself out as being able to perform the services described in NRS 645B.0127 if he only offers to provide money to invest in loans secured by an interest in real property to:

1. A mortgage broker licensed pursuant to chapter 645B of NRS; or

2. A person exempt from the provisions of chapter 645B of NRS.

(Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000)

NAC 645B.020 Documentation required with application for license; compliance with requirements of letter of conditional approval. (NRS 645B.020, 645B.060)

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

(a) A copy of his business license, when applicable, or his application for such a license if he has not obtained one.

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

(1) Its articles of incorporation and its bylaws;

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

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

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

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

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

(1) Its articles of organization and operating agreement;

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

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

(g) A copy of the lease of the applicant or other document which includes the address of the place of business of the applicant.

2. If an applicant has received a letter of conditional approval of his application from the Division which imposes additional requirements that the applicant must satisfy to obtain a license, the applicant must comply with those requirements within 30 days after the date on which the letter was issued by the Division. If the applicant does not satisfy all additional requirements set forth in the letter within the period prescribed in this subsection, the conditional approval of the application will be deemed to have expired and the applicant must reapply to obtain a license. The Commissioner may, for good cause, extend the 30-day period prescribed in this subsection.

[Comm’r of Savings Associations, Mortgage Reg. § 2, eff. 6-29-82]—(NAC A by Comm’r of Financial Institutions by R045-00, 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004)

NAC 645B.030 Branch office: Prerequisites and name for issuance of license; display of license; responsibilities of mortgage broker. (NRS 645B.020, 645B.060)

1. An applicant must submit with his application for a branch license:

(a) The name, residence address and telephone number of the qualified employee designated to manage the branch office; and

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

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

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

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

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

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

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

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

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

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

[Comm’r of Savings Associations, Mortgage Reg. § 3, eff. 6-29-82]—(NAC A by Admstr. of Financial Institutions, 6-29-84; A by Comm’r of Financial Institutions by R045-00, 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004)

NAC 645B.032 Sharing office space with another business. (NRS 645B.060)

1. Except as otherwise provided in subsection 2, a mortgage broker may share office space with any other business if each business has a designated space within the office space and each business is separately identifiable by a sign or other method of identification within the office space.

2. A mortgage broker may share office space with a business licensed pursuant to chapter 645 of NRS if:

(a) Each business has separate and distinct office space and signs such that a reasonable customer would understand which business he is transacting with at all times;

(b) Each business operates as a separate legal entity;

(d) Each business maintains separate licenses; and

(e) The businesses are subsidiaries of the same parent corporation or are otherwise affiliated businesses.

(Added to NAC by Comm’r of Mortgage Lending by R087-04, eff. 8-31-2004)

NAC 645B.035 Use of fictitious name. (NRS 645B.020, 645B.060)

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

(a) Complies with chapter 602 of NRS;

(b) Files with the Division a certified copy, issued by the appropriate county clerk, of the certificate filed by the mortgage broker pursuant to chapter 602 of NRS; and

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

(a) Obtains a certified copy, issued by the appropriate county clerk, of the certificate filed by the mortgage broker pursuant to chapter 602 of NRS indicating the new fictitious name;

(b) Files with the Division, not later than 10 calendar days after obtaining the certified copy pursuant to paragraph (a):

(1) The certified copy obtained pursuant to paragraph (a); and

(2) The current license or certificate of exemption of the mortgage broker; and

3. A mortgage broker may conduct business using more than one fictitious name only if the mortgage broker obtains a separate license issued pursuant to chapter 645B of NRS for each fictitious name under which he intends to do business. A mortgage broker who conducts business in this State using more than one fictitious name is responsible for the conduct of each qualified employee, mortgage agent and other employee associated with the mortgage broker regardless of the license or name under which the conduct takes place.

(Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004)

NAC 645B.037 Use of same name, confusingly similar name or name not approved by Division. (NRS 645B.060)

1. The Division shall not issue a license or certificate of exemption with a name that is the same as or confusingly similar to a name on a license or certificate of exemption previously issued by the Division.

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

(Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000)

CERTIFICATE OF EXEMPTION

NAC 645B.045 Unexpired certificate. (NRS 645B.060) A person who has an unexpired certificate of exemption issued pursuant to chapter 645B of NRS shall be deemed to have an unexpired certificate of exemption issued pursuant to chapter 645E of NRS.

(Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000)

SUPERVISION BY COMMISSIONER

General Provisions

NAC 645B.055 Qualified employee: Designation; approval. (NRS 645B.060)

1. Every partnership, corporation or limited-liability company doing business as a mortgage broker in this State shall designate a qualified employee who may, upon approval of the Commissioner, act on behalf of the partnership, corporation or limited-liability company.

2. The Commissioner will approve the qualified employee designated pursuant to subsection 1 if the qualified employee meets the requirements of an applicant for a license as a mortgage broker pursuant to chapter 645B of NRS.

3. The approval issued by the Commissioner entitles the qualified employee to act pursuant to the terms and conditions of the license issued to the partnership, corporation or limited-liability company by the Commissioner pursuant to chapter 645B of NRS, but only as a qualified employee of the partnership, corporation or limited-liability company, and not on his own behalf.

4. If the qualified employee designated pursuant to subsection 1 is not approved by the Commissioner pursuant to subsection 2 or ceases to be a qualified employee as defined in NAC 645B.008, the partnership, corporation or limited-liability company shall designate another qualified employee pursuant to subsection 1 not later than:

(a) Thirty calendar days after the date that:

(1) The Commissioner notifies the partnership, corporation or limited-liability company that the initial qualified employee designated pursuant to subsection 1 is not approved; or

(2) The qualified employee ceases to be a qualified employee as defined in NAC 645B.008; or

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

(Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000)

NAC 645B.057 Change in ownership, control, management, principal employees or principal or branch office. (NRS 645B.060, 645B.095)

1. Any material change in the ownership, management or principal employees of a mortgage broker at his principal office or a branch office must be reported to the Commissioner within 30 calendar days after the change.

2. If a person acquires stock or ownership in a mortgage broker as a result of a transfer that constitutes a change of control pursuant to NRS 645B.095:

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

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

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

3. A mortgage broker may not close his principal office or a branch office until:

(a) The mortgage broker has returned his license; and

(b) The Commissioner has approved the closure.

4. The request for approval of the closure of the principal office of the mortgage broker or a branch office must contain the following information:

(a) The status of any incomplete applications for mortgage loans and the manner in which the loans will be finalized;

(b) An accounting of any trust account maintained by the mortgage broker and the plan for distribution of money in the account;

(c) If any mortgage agent associated with or employed by the mortgage broker has been terminated pursuant to subsection 3 of NRS 645B.450, evidence of the termination; and

(d) The location in this State where records of the mortgage broker will be maintained pursuant to subsection 1 of NRS 645B.080 and subsection 5 of NAC 645B.080.

[Comm’r of Savings Associations, Mortgage Reg. § 4, eff. 6-29-82]—(NAC A by Admstr. of Financial Institutions, 6-29-84; A by Comm’r of Financial Institutions by R045-00, 9-5-2000)—(Substituted in revision for NAC 645B.040)

NAC 645B.060 Fee for supervision and related activities: Amount; collection; failure to pay; accounting of time billed. (NRS 645B.050, 645B.060, 645F.280)

1. Except as otherwise provided in this subsection, the Commissioner will charge and collect a fee of $60 per hour from each mortgage broker for any supervision, examination, audit, investigation or hearing conducted pursuant to chapter 645B of NRS. The Commissioner may charge a fee equivalent to the estimated or actual fee charged to the Division for the time of an attorney required in any examination, investigation or hearing conducted pursuant to chapter 645B of NRS.

2. The Commissioner will bill each mortgage broker upon the completion of the activity for the fee established in subsection 1. The fee must be paid within 30 calendar days after the date the bill is received. Except as otherwise provided in this subsection, any payment received after that date must include a penalty of 10 percent of the fee plus an additional 1 percent of the fee for each complete month, or portion of the last month, that the fee is not paid. The Commissioner may waive the penalty for good cause.

3. Failure of a mortgage broker to pay the fee required in subsection 1 as provided in this section constitutes grounds for the imposition of any discipline authorized pursuant to NRS 645B.670, including, without limitation, the revocation of his license.

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

[Comm’r of Savings Associations, Mortgage Reg. § 6, eff. 6-29-82]—(NAC A by Admstr. of Financial Institutions, 6-29-84; A by Comm’r of Financial Institutions, 4-20-88; 11-27-89, eff. 7-1-89; R045-00, 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004)

Examinations, Audits and Investigations

NAC 645B.064 Assessment for costs related to audits and examinations. (NRS 645B.060)

1. Each mortgage broker shall pay to the Division an annual assessment as required pursuant to NRS 645F.180 to cover the costs related to the employment of a certified public accountant and the performance of audits and examinations conducted by the Division.

2. The Division will bill each mortgage broker for the assessment. The assessment must be paid within 30 calendar days after the date the bill is received.

3. A charge of 10 percent of the assessment will be imposed on any mortgage broker whose assessment is received by the Division after the date on which the assessment is due. The Commissioner may waive the penalty for good cause.

(Added to NAC by Comm’r of Financial Institutions, eff. 12-17-87; A 5-27-92; R045-00, 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004)

NAC 645B.066 Authority of examiner, auditor or investigator. (NRS 645B.060) An examiner, auditor or investigator conducting an examination, periodic or special audit, or investigation of a mortgage broker pursuant to paragraph (b), (c) or (d) of subsection 2 of NRS 645B.060 may:

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

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

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

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

2. Inspect and copy any documents which are in the possession, control or custody of the mortgage broker and which are related to business conducted pursuant to this chapter or chapter 645B of NRS.

(Added to NAC by Comm’r of Mortgage Lending by R087-04, eff. 8-31-2004)

NAC 645B.067 Rating of mortgage broker upon completion of examination. (NRS 645B.060) Upon completion of an examination of a mortgage broker, the examiner shall rate the mortgage broker on a scale of “1” to “5,” as follows:

1. A rating of “1” indicates that the mortgage broker and the management of the mortgage broker have demonstrated a high degree of compliance with applicable laws and regulations. A rating of “1” may be given if there is a minor violation or deficiency, but only if the mortgage broker acted to correct the violation or deficiency immediately and the action taken by the mortgage broker is likely to prevent future violations or deficiencies.

2. A rating of “2” indicates that the mortgage broker and the management of the mortgage broker have demonstrated substantial compliance with applicable laws and regulations and that any deficiencies noted in the report made by the examiner pursuant to NAC 645B.068 can be corrected by the mortgage broker with a minimum of regulatory supervision. A rating of “2” may be given if there is more than one minor violation or deficiency, but only if the mortgage broker acted to correct the violations or deficiencies immediately and the action taken by the mortgage broker is likely to prevent future violations or deficiencies.

3. A rating of “3” indicates that the mortgage broker and the management of the mortgage broker have demonstrated less than satisfactory compliance with applicable laws and regulations and that regulatory supervision is required for the correction of the violations and deficiencies noted in the report made by the examiner pursuant to NAC 645B.068. A rating of “3” may be given if there were minor violations or deficiencies from a previous examination that were not corrected.

4. A rating of “4” indicates that the mortgage broker and the management of the mortgage broker have demonstrated substantial lack of compliance with applicable laws and regulations and that immediate remedial action is required for the correction of the violations and deficiencies noted in the report made by the examiner pursuant to NAC 645B.068. The mortgage broker will be subject to close regulatory supervision, and the examiner will recommend disciplinary action against the mortgage broker to the Commissioner.

5. A rating of “5” indicates that the mortgage broker and the management of the mortgage broker have demonstrated unsatisfactory compliance with applicable laws and regulations and that immediate remedial action is required for the correction of the violations and deficiencies noted in the report made by the examiner pursuant to NAC 645B.068 and may include action by the Commissioner to take possession of the business and assets of the mortgage broker. The examiner will recommend disciplinary action against the mortgage broker to the Commissioner.

(Added to NAC by Comm’r of Mortgage Lending by R087-04, eff. 8-31-2004)

NAC 645B.068 Results of examination: Preparation and review of draft report; final report; confidentiality; action by Commissioner. (NRS 645B.060, 645B.090)

1. Not more than 30 days after the completion of an examination of a mortgage broker, the examiner that performed the examination shall prepare a draft report of the examination and provide the draft report to appropriate personnel of the Division. The draft report must include only:

(a) Facts that are contained in the files, books, records or other documents of the mortgage broker that were examined by the examiner;

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

(c) Conclusions and recommendations that are reasonably supported by the facts that are included in the draft report, including, but not limited to, the rating given to the mortgage broker pursuant to NAC 645B.067.

2. Not more than 15 days after the draft report of an examination is received by the Division, the Commissioner or his designee will deliver to the mortgage broker who was examined:

(a) A copy of the draft report; and

(b) Notice that the mortgage broker has not more than 30 days, unless the Commissioner, for good cause, allows a longer period, to review the draft report and submit to the Commissioner, in writing, any comments regarding or objections to matters contained in the draft report.

3. If a mortgage broker received a rating of “3,” “4” or “5” and submitted written comments or objections within the period specified in subsection 2, the Commissioner or his designee will:

(a) Not more than 15 days after the last day on which the mortgage broker could submit written comments or objections pursuant to subsection 2, hold an informal meeting with the mortgage broker regarding the draft report; and

(b) Review the draft report, together with the written submissions or objections made by the mortgage broker and any relevant portions of the working papers of the examiner, and, not more than 15 days after the date on which the informal meeting was held pursuant to paragraph (a):

(1) Adopt the draft report as filed;

(2) Adopt the draft report with modifications;

(3) Provide the mortgage broker with an opportunity for a formal hearing; or

(4) Direct the examiner to reopen the examination to obtain additional data, documents or information and, if necessary, file a new draft report pursuant to subsection 1. If the findings of the initial draft report are supported by the findings of the examiner after completion of the reopened examination, the mortgage broker is responsible for the costs attributable to the reopened examination pursuant to NRS 645B.060.

4. If a mortgage broker:

(a) Received a rating of “1” or “2” on an examination pursuant to NAC 645B.067 and submitted written comments or objections within the period specified in subsection 2; or

(b) Did not file a written comment or objection to a draft report within the period specified in subsection 2,

Ê the draft report will be deemed to be the final report of the examination.

5. Pursuant to NRS 645B.060, the results of an examination are not open to public inspection until the requirements set forth in subsection 3 are completed.

6. If the examination and report reveal that a mortgage broker is operating in violation of this chapter, chapter 645B of NRS or a previous order of the Commissioner, the Commissioner may order the mortgage broker to take any action the Commissioner deems necessary or appropriate to correct the violation. The Commissioner may also take disciplinary action pursuant to NRS 645B.670.

7. The Commissioner may, for good cause, extend any period specified in this section that is applicable to an examiner, the Commissioner or his designee for an additional period of not more than 15 days.

(Added to NAC by Comm’r of Mortgage Lending by R087-04, eff. 8-31-2004)

Records and Reports

NAC 645B.070 Monthly reports. (NRS 645B.060, 645B.080)

1. Each mortgage broker shall submit, for each month, on a form approved by the Commissioner, a report on the volume of loans arranged in that month. If the mortgage broker is performing loan servicing and maintains any accounts described in subsection 4 of NRS 645B.175, the monthly report must include the information required pursuant to subsections 2 and 3. The monthly report must be submitted to the Commissioner by the 15th day of the month following the month for which the report was made. If no loans were arranged in that month, the report must state that fact.

2. If, on the last day of any month, a debtor has failed to make two or more consecutive payments in accordance with the terms of the loan, a mortgage broker who is performing loan servicing and maintains any accounts described in subsection 4 of NRS 645B.175 shall:

(a) Include in his report to the Commissioner:

(1) The name, address and telephone number of the debtor;

(2) The total number and amount of any payments made on the current delinquency;

(3) The outstanding balance of the loan and any accrued interest on the last day of the month for which the report is submitted;

(4) A statement of whether the loan has been declared to be in default and, if so, the nature of any actions that have been taken because of the default; and

(5) The date on which the mortgage broker sent the notice to investors required pursuant to paragraph (b) of this subsection and paragraph (b) of subsection 1 of NRS 645B.260.

(b) Mail a notice containing the following information to the last known address of each investor who owns a beneficial interest in the loan not later than 15 days after the last day of each such month:

(1) The name, address and telephone number of the debtor;

(2) The total number of months and days that the debtor has failed to make a payment;

(3) The outstanding balance of the loan and any accrued interest on the last day of the month for which the notice is submitted; and

(4) A statement of whether the loan has been declared to be in default and, if so, the nature of any actions that have been taken because of the default.

3. If the mortgage broker is not servicing any loans in which a debtor has failed to make two or more consecutive payments in accordance with the terms of the loan, the monthly report required pursuant to subsection 1 must state that fact.

4. The mortgage broker must comply with the provisions of subsection 2 each month until:

(a) The debtor or his designee remedies the delinquency in payments and any default; or

(b) The lien securing the loan is extinguished.

5. The Commissioner may refuse to renew the license of a mortgage broker who has not submitted a monthly report required by subsection 1 for 1 or more of the preceding 12 months.

[Comm’r of Savings Associations, Mortgage Reg. § 7, eff. 6-29-82]—(NAC A by Admstr. of Financial Institutions, 6-29-84; A by Comm’r of Financial Institutions by R045-00, 9-5-2000)

NAC 645B.072 “Complete and suitable records” interpreted. (NRS 645B.060, 645B.080) As used in NRS 645B.080, the Commissioner interprets “complete and suitable records” to mean:

1. A file that includes, but is not limited to, the following documents, if applicable to the type and purpose of the loan:

(a) The real estate sales contract;

(b) Escrow instructions;

(d) The loan application, including, but not limited to, any attachments or supplements;

(e) An appraisal report;

(f) Any verification of representations made by the consumer on the application for a mortgage;

(g) A credit report;

(h) A good faith estimate of closing costs and any disclosures required pursuant to the federal Truth in Lending Act, 15 U.S.C. §§ 1601 et seq.;

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

(j) Any commitments made by the lender to the consumer, including, but not limited to, a commitment to guarantee the consumer a certain interest rate and a commitment to fund the loan.

2. For loans brokered to private investors, a file that must include all the items required pursuant to subsection 1, if applicable, and any additional documents or disclosures required pursuant to this chapter, chapter 645B of NRS or federal law, including, but not limited to:

(a) The original documents subject to the provisions of NAC 645B.080 or 645B.215;

(b) All disclosures required pursuant to NRS 645B.185 and 645B.186, and NAC 645B.073, 645B.210 and 645B.220; and

(c) If the mortgage broker maintains any account pursuant to NRS 645B.175, the mortgage broker must include records that demonstrate compliance with the provisions of NRS 645B.115 and NAC 645B.150 and 645B.160 and any other applicable law.

3. For loans funded by the mortgage broker, a file that must include all the items required pursuant to subsection 1 and all closing documentation, including, but not limited to, a recorded or confirmed deed of trust, the title insurance policy, the note, the hazard insurance policy and any subsequent assignment to additional investors. Assignments to private investors must comply with all documentation requirements of this chapter and chapter 645B of NRS.

4. Any additional books and records that must be maintained or readily accessible at each place of business of the mortgage broker, including, but not limited to, any branch office as applicable to the operations of the mortgage broker, including:

(a) Any book or record that evidences compliance with applicable federal and state laws and regulations;

(b) A copy of each item of advertising material that was published or distributed by or on behalf of the mortgage broker in the format in which the material was published or distributed;

(c) A copy of any written complaint against the mortgage broker, together with all correspondence, notes, responses and other documentation related to the disposition of the complaint;

(d) All checkbooks, check registers, bank statements, deposit slips, withdrawal slips, cancelled checks and other records that relate to the business of the mortgage broker;

(e) Copies of all federal tax withholding forms, reports of income for federal taxation and evidence of payments to all employees, independent contractors and other persons that worked for the mortgage broker;

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

(g) Copies of all material correspondence related to the business of the mortgage broker, including, but not limited to, electronic messages; and

(h) Copies of all reports, audits, examinations, inspections, reviews, investigations or other similar activities relating to the business of the mortgage broker performed by any third party, including, but not limited to, any regulatory or supervisory authority.

(Added to NAC by Comm’r of Mortgage Lending by R087-04, eff. 8-31-2004)

NAC 645B.073 Documentation for action on behalf of investors when beneficial interest belongs to more than one natural person. (NRS 645B.060, 645B.080)

1. Except as otherwise provided in subsection 3, if a mortgage broker acts on behalf of investors on a matter related to a mortgage loan, and if the beneficial interest in the loan belongs to more than one natural person, the documentation of the matter must include provisions to allow the holders of 51 percent or a greater specified percentage of the beneficial interests of record to act on behalf of all the holders of the beneficial interests of record in the event of a default or foreclosure for matters that require the direction or approval of the holders of the beneficial interests in the loan, including, without limitation:

(a) The designation of the mortgage broker, servicing agent or other person to act on the behalf of the holders of the beneficial interests in the loan; and

(b) The sale, encumbrance or lease of real property owned by the holders resulting from a foreclosure or the receipt of a deed in lieu of a foreclosure.

2. The provisions required by this section may be included in the deed of trust, the assignment of interest or any other documentation that binds the mortgage broker and the investors.

3. The provisions of this section do not apply to a transaction involving two investors with equal interests.

(Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000)

NAC 645B.077 Retention and maintenance of certain records. (NRS 645B.060, 645B.080)

1. The mortgage broker shall retain records of all his completed mortgage transactions for a period of at least 4 years after the date of the last activity relating to the transaction. After a record has been retained 2 or more years, the mortgage broker may cause the record to be reproduced by the microphotographic process, optical disc imaging or any other equivalent technique designed to ensure an accurate reproduction of the original record. A record reproduced as authorized by this section must be considered by the Commissioner to be the same as the original record. Upon completion of the reproduction of a record as authorized by this section, the original of the record may be destroyed.

2. The mortgage broker shall retain applications for mortgages that were denied or withdrawn for a period of at least 1 year or as otherwise required by federal law.

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

(Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004)

NAC 645B.080 Provision and retention of certain documents. (NRS 645B.060, 645B.080)

1. Before an investor who is a natural person makes a loan for which a licensed mortgage broker is acting as a broker, the mortgage broker shall provide, unless specifically waived in writing, to the investor:

(a) A written application for the loan which is signed by the prospective borrower and which contains the borrower’s address, a history of his employment and income, details of monthly payments he is obliged to pay and any other information requested by the investor.

(b) Evidence of the history of employment of the prospective borrower and income, such as a tax return or an employer’s statement of the borrower’s past yearly income.

(c) A report on the history of credit of the prospective borrower issued by a credit reporting agency, including an explanation by the borrower of any material derogatory item in the report and evidence that the report has been compared for accuracy to the borrower’s application for the loan.

(d) An analysis by the mortgage broker of the ability of the prospective borrower to pay his monthly debts.

(e) A preliminary report on the status of the title of the property which is proposed as security for the loan.

2. A mortgage broker shall retain a copy of the documents described in subsection 1 and shall retain in his files a statement from the investor, on a form provided by the Division, acknowledging that:

(a) The investor received the documents, or that the investor waived in writing the right to receive the documents; and

(b) The decision to make the loan was made after the investor had the opportunity to receive and review the documents.

3. If the loan is made, the mortgage broker shall retain in his files and provide to the investor:

(a) A copy of the promissory note;

(b) A recorded copy of the deed of trust securing the loan; and

Ê The mortgage broker shall retain in his files a statement, on a form provided by the Division, acknowledging that the documents were provided to the investor.

4. If the loan is made, the mortgage broker shall retain in his files:

(a) A copy of a policy of fire insurance which is adequate to cover the replacement costs of all improvements on the property securing the loan, including an endorsement naming the investor as the insured, when applicable;

(b) If the investor is a corporation or partnership, a copy of its statement authorizing the loan; and

5. The mortgage broker shall store his original notes, if retained, in a fireproof container or room.

6. If the mortgage broker has obtained an appraisal on behalf of an investor, the mortgage broker shall provide a copy of the appraisal to the:

(a) Investor, upon request; and

(b) Borrower, upon request, if the borrower has paid for the appraisal.

[Comm’r of Savings Associations, Mortgage Reg. § 8, eff. 6-29-82]—(NAC A by Comm’r of Financial Institutions, 5-19-88; R045-00, 9-5-2000)

Net Worth

NAC 645B.095 Determination by Commissioner. (NRS 645B.060, 645B.115) For the purpose of determining the net worth of a mortgage broker pursuant to NRS 645B.115, the Commissioner will interpret the term “net worth” to mean the amount by which the assets of a mortgage broker exceed his liabilities, calculated in accordance with generally accepted accounting principles where the mortgage broker:

1. Must exclude any intangible and any amount receivable by the mortgage broker that is related to the intangible; and

2. May exclude any shareholder debt that is subordinated.

(Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000)

ESCROW AND TRUST ACCOUNTS

NAC 645B.150 Money received to acquire loans: Required statements and ledgers. (NRS 645B.060, 645B.080, 645B.175) A licensed mortgage broker maintaining any accounts described in subsection 1 of NRS 645B.175 shall:

1. Provide to the Commissioner a financial statement of the account or accounts which has been audited in accordance with generally accepted auditing standards.

2. Maintain a subsidiary ledger for each investor which must include:

(a) The name and address of the investor;

(b) The amount of the initial investment and the amount of any subsequent investment;

(d) Each specific loan invested in, including:

(1) The number of the loan;

(2) The name of the borrower;

(3) The closing date of the loan; and

(4) The percentage of the loan owned by the investor, if the loan is owned by more than one person;

(e) The date of the investment;

(f) The amount of money invested;

(g) The maturity date of the loan or loans made;

(h) Any change in the investment made on behalf of the investor; and

(i) The status of each loan, including whether the loan is current or delinquent, and if the loan is delinquent, the number of months it is past due.

3. At least annually, provide each investor with a statement which details:

(a) The total amount he has invested with the mortgage broker;

(b) The amount he has invested in a loan or loans; and

Ê The statement, if annual, must be provided to the investor not later than 120 days after the end of the fiscal year of the mortgage broker.

(Added to NAC by Comm’r of Financial Institutions, eff. 5-27-92; A by R045-00, 9-5-2000)

NAC 645B.160 Money received to repay loans: Required statements and records. (NRS 645B.060, 645B.080, 645B.175) A licensed mortgage broker maintaining any accounts described in subsection 4 of NRS 645B.175 shall:

1. Provide to the Commissioner a statement of the account or accounts which has been audited in accordance with generally accepted auditing standards as promulgated for special reports.

2. Keep monthly records reconciling all payments received on loans made by investors to such accounts and any subsequent disbursement to the investors.

3. At least annually, provide to each investor:

(a) A statement indicating all money collected and disbursed; and

(b) The amortized balance of each loan in which the investor has an interest.

Ê The statement, if annual, must be provided to the investor not later than 120 days after the end of the licensee’s fiscal year.

(Added to NAC by Comm’r of Financial Institutions, eff. 5-27-92; A by R045-00, 9-5-2000)

NAC 645B.170 Money received to acquire or repay loans: Period for retention of records. (NRS 645B.060, 645B.080, 645B.175) A licensed mortgage broker shall retain all records of accounts maintained pursuant to subsections 1 and 4 of NRS 645B.175 for at least 2 years after the date of the last transaction with the investor.

(Added to NAC by Comm’r of Financial Institutions, eff. 5-27-92; A by R045-00, 9-5-2000)

DISCLOSURES AND ADVERTISING

NAC 645B.210 Disclosure of involvement. (NRS 645B.060, 645B.185, 645B.186)

1. If an owner, partner, director, officer, manager, member or employee of a licensed mortgage broker, or a relative of an owner, partner, director, officer, manager, member or employee of a licensed mortgage broker:

(a) Has any personal involvement in a lending or borrowing transaction of the mortgage broker which is authorized under chapter 645B of NRS; or

(b) Is licensed as, conducts business as or holds a controlling interest or position in:

(1) A construction control;

(2) An escrow agency or escrow agent; or

(3) A title agent, a title insurer or an escrow officer of a title agent or title insurer,

Ê the involvement must be disclosed to the borrower and the investor before the date that the loan is consummated. Such a disclosure must be separate from the documents of the transaction and must clearly and concisely state the nature of the involvement. The statement of disclosure must be signed by the borrower and the investor as an acknowledgment of the involvement. The mortgage broker shall not act as the attorney in fact or the agent of an investor with respect to signing the acknowledgment.

2. If a mortgage broker is owned by a corporation in which one owner, director, manager or employee owns an interest of 10 percent or more, and that person has any personal involvement in a licensed transaction of the mortgage broker, the involvement must be disclosed to the borrower and the investor pursuant to subsection 1.

[Comm’r of Savings Associations, Mortgage Reg. § 13, eff. 6-29-82]—(NAC A by Comm’r of Financial Institutions by R045-00, 9-5-2000)—(Substituted in revision for NAC 645B.130)

NAC 645B.215 Disclosures to purchaser of note secured by deed of trust; retention of documents. (NRS 645B.060, 645B.080)

1. Before a person purchases an existing note secured by a deed of trust or an interest therein for which a licensed mortgage broker is acting as a broker, the mortgage broker shall provide to the purchaser, unless specifically waived in writing by that person:

(a) A copy of the promissory note;

(b) A record of the history of payments on the note or a document signed by the seller and borrower stating the existing balance of the note;

(d) The original appraisal of the property securing the note, if available.

2. A mortgage broker shall retain a copy of the materials provided to the purchaser pursuant to subsection 1.

3. If the purchase is made, the mortgage broker shall retain in his files the original or a copy and provide to the purchaser, respectively, the copy or original of the following documents:

(a) The promissory note and the assignment of the note.

(b) The recorded deed of trust and recorded assignment of the beneficial interest.

(d) A policy of fire insurance indicating coverage in an amount sufficient to cover the replacement costs of all improvements on the property, including, if applicable, an endorsement naming the purchaser as a payee in case of loss.

(e) A statement signed by the purchaser acknowledging that the decision to purchase the note secured by a deed of trust was made after the purchaser was provided with and reviewed the material required in subsection 1.

(Added to NAC by Admstr. of Financial Institutions, eff. 12-15-86; A by Comm’r of Financial Institutions by R045-00, 9-5-2000)—(Substituted in revision for NAC 645B.140)

NAC 645B.220 Disclosure to investors: Form; execution of form by corporate investor. (NRS 645B.060, 645B.185, 645B.186)

1. The disclosure form given to an investor pursuant to NRS 645B.185 must be in substantially the following form:

(At least 14-point bold type)

MORTGAGE INVESTMENT DISCLOSURE FORM

(At least 10-point type)

IMPORTANT: Pursuant to NRS 645B.185, each investor must sign and date a disclosure form before a mortgage broker or mortgage agent accepts money for the investment. This form must be executed for each separate loan in which the investor invests money. A mortgage broker or mortgage agent may not act as the investor’s attorney in fact or agent in the signing or dating of this form and may not by agreement alter or waive these disclosure requirements.

Description of loan:_________________________________________________________________________

(At least 14-point bold type)

BEFORE YOU INVEST IN A PROMISSORY NOTE SECURED BY AN INTEREST IN REAL PROPERTY, YOU SHOULD KNOW . . .

The funding of a loan or purchase of a promissory note that is secured by a lien on real property (mortgage loan) is an investment that involves some risk.

(At least 10-point type)

An investment in a promissory note secured by a lien on real property, usually through a deed of trust (mortgage loan or mortgage loan investment), like most investments involves the risk that the investment will not perform as expected. The mortgage broker with whom you are dealing is not a depository institution, and a deed of trust investment is not secured by any depository insurance or insured or guaranteed by any agency of the State of Nevada or the Federal Government. Nevada law prohibits the mortgage broker with whom you are dealing from representing or even implying to you that he will ensure or guarantee that the investment will perform as expected. The borrower on the loan may default in required payments, and you may lose all or part of the principal amount you invested and/or the interest you expected to earn from the investment.

Some of the most significant factors that affect your risk in a mortgage loan investment include: (1) the knowledge, experience and integrity of the mortgage broker with whom you are dealing; (2) the market value and equity of the property that will secure the promissory note; (3) the borrower’s financial standing and creditworthiness; (4) the escrow process involving the funding of the loan or purchase of the note; (5) the documents and instruments describing, evidencing and securing the loan; (6) the provisions regarding the collection and servicing of the loan; and (7) the provisions for enforcement of the deed of trust.

(At least 14-point bold type)

You are entitled to information about the mortgage broker with whom you are investing.

(At least 10-point bold type)

You are entitled to receive information regarding the mortgage broker with whom you are dealing from the Division of Mortgage Lending, which may be contacted at either one of the following locations:

Division of Mortgage Lending Division of Mortgage Lending

400 W. King Street, Suite 406 3075 E. Flamingo Street, Suite 104A

Carson City, Nevada 89703 Las Vegas, Nevada 89121

775.684.7060 702.486.0780

You have the right to request the mortgage broker with whom you are dealing to authorize the Division of Mortgage Lending to release to you the most recent financial statement of the mortgage broker on file with the Division. * YES, I would like to review a financial statement. * NO, I would not like to review a financial statement.

Disclosures required by subparagraphs (3) and (4) of paragraph (b) of subsection 6 of NRS 645B.185:

Has any disciplinary action been taken by the Commissioner of Mortgage Lending against the mortgage broker or any general partner, officer or director of the mortgage broker within the preceding 12 months? * YES * NO. If yes, describe below:

_________________________________________________________________________________________

Has the mortgage broker or any general partner, officer or director of the mortgage broker been convicted within the preceding 12 months for violating any law, ordinance or regulation that involves fraud, misrepresentation or a deceitful, fraudulent or dishonest business practice? * YES * NO. If yes, describe below:

_________________________________________________________________________________________

You also have the right, pursuant to subsection 3 of NRS 645B.090, to ascertain from the Division of Mortgage Lending:

· Whether the Division of Mortgage Lending has disciplined the mortgage broker during the immediately preceding 5 years.

· The findings and results of any investigation against the mortgage broker pursuant to the provisions of chapter 645B of NRS which was completed during the immediately preceding 5 years and which resulted in a finding by the Commissioner of Mortgage Lending that the mortgage broker committed a violation of a provision of chapter 645B of NRS, chapter 645B of NAC or an order of the Commissioner.

(At least 14-point bold type)

You are entitled to have a written appraisal of the property that is to secure your deed of trust investment as well as other information relating to the property.

(At least 10-point type)

The law requires the mortgage broker with whom you are dealing to obtain and make available for your inspection a written appraisal of the real property which is to secure the mortgage loan investment unless you specifically waive in writing your right to have the appraisal performed. An appraiser who is licensed or certified to perform real estate appraisals in this State must perform the appraisal if the property is located in this State. The mortgage broker with whom you are dealing is prohibited from performing the appraisal or providing any estimate or opinion of the value of the property that is to secure the mortgage loan investment, unless the mortgage broker is certified or licensed to perform the appraisal pursuant to chapter 645C of NRS. You are entitled to a copy of the appraisal upon request.

* I waive my right to an appraisal for this loan. Investor: _________________________________

* I wish to review an appraisal for this loan. Date: ____________________________________

In addition to a written appraisal, you are entitled to know 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.

The real property that will secure this loan * is * is not encumbered by any other liens. If other liens exist, describe, for each lien:

Description: _________________________________________________________________

Amount encumbered: _________________________________________________________________

Priority: _________________________________________________________________

Current status: _________________________________________________________________

(At least 14-point type)

You are entitled to review information relating to the financial standing and creditworthiness of the borrower and documentation relating to the mortgage loan. Pursuant to NAC 645B.080, you will be asked to complete a form in which you acknowledge that you had the opportunity to receive and review that information and documentation.

You are entitled to review documentation relating to how the mortgage loan is funded and serviced.

(At least 10-point type)

Nevada law requires the mortgage broker to fund the entire amount of the loan either out of his trust account directly to the borrower or through a third-party escrow agent. In most cases, the loan will be funded through a third-party escrow agent. An escrow is opened when money, documents, instruments and written instructions regarding the transaction (escrow instructions) are conditionally delivered by the principals to a third party (escrow agent). The escrow instructions set forth the conditions that must be satisfied or waived before the escrow agent may disburse your money to the borrower or the note holder. You have the right to review the escrow instructions. The escrow instructions should be consistent with your understanding of the loan transaction and should identify a specific promissory note and deed of trust (or interest therein). Escrow “closes” when all the conditions of the escrow instructions have been waived or satisfied, the instruments have been recorded and the money has been disbursed. You have the right to review a closing statement relating to the escrow describing to whom and how the money was disbursed.

In many cases, including those cases where the investments consist of “fractionalized” interests, i.e., ownership of less than 100% of the mortgage investment, the loan requires servicing by an authorized agent. Loan servicing includes collecting payments from borrowers, disbursing payments to investors or note holders, mailing of appropriate notices, monitoring the status of senior liens and encumbrances, maintaining adequate insurance coverage and coordinating foreclosure proceedings. The mortgage broker with whom you are dealing is authorized by Nevada law to act as the servicing agent for the mortgage loan he originates. It is recommended that all persons investing in a mortgage loan which will be serviced by a servicing agent execute a written servicing agreement that clearly specifies the authority granted to the servicing agent. The servicing agreement should address issues such as: (1) the fees for servicing and how they are to be paid; (2) the person who has the authority to instruct the trustee under the deed of trust to commence foreclosure proceedings in the event of a default; (3) how, in the case of a “fractionalized” note and deed of trust with multiple parties owning beneficial interests, the parties are to determine and direct the actions to be taken in the event of default or with respect to other matters that involve the enforcement of terms of the promissory note and/or deed of trust (Nevada law requires that the documentation pertaining to a note and deed of trust owned initially by more than one natural person include a provision by which record holders of 51% or a greater specified percentage of the beneficial interests in the mortgage loan may direct certain actions that require direction or approval of the holders of beneficial interests); (4) the identity of the person responsible for holding the original promissory note and deed of trust; (5) how the loan servicing agreement may be terminated by the investors in the mortgage loan; (6) the right to obtain the names, addresses and phone numbers of other persons with beneficial interests in the loan; and (7) the monitoring of any senior liens.

A mortgage broker performing loan servicing has an obligation to account to the borrower and every investor for money collected and disbursed in the exercise of that function.

(At least 14-point type)

You have the right to know whether the mortgage broker with whom you are dealing, or any relative of the mortgage broker, is acting in any capacity, or has any other interest, other than as a mortgage broker.

(At least 10-point type)

Nevada law requires the mortgage broker with whom you are dealing to disclose to you whether he, or any relative of his, has any personal interest in the mortgage loan other than as a mortgage broker. For example, if the mortgage broker owns a 50% interest in the builder applying for a construction loan, the mortgage broker is required to disclose that interest to you. In addition, if a mortgage broker or a relative of the mortgage broker is licensed as, conducts business as or holds a controlling interest or position in (1) a construction control company, (2) an escrow agency, or (3) a title agent, a title insurer or an escrow officer of a title agent or title insurer, the mortgage broker must fully disclose that relationship to every investor, and may not require, as a condition to the acquisition or purchase of an interest in a mortgage loan, that the investor transact business with or use the services of the other business.

The mortgage broker, or a relative of the mortgage broker, has an interest in this loan in a capacity other than as a mortgage broker. * YES * NO. If yes, explain below:

_________________________________________________________________________________________

(At least 14-point type)

Collection of a promissory note and enforcement of a deed of trust involves some risk.

(At least 10-point type)

When the borrower on a mortgage loan fails to make required payments, the actions an investor can take, or that a servicing agent can take on behalf of an investor, are determined by provisions of Nevada law and the documents and instruments evidencing the mortgage loan. Frequently, the borrower who is delinquent on your loan is also delinquent on senior liens. Even though your loan may be current, the borrower may fail to maintain the payments on senior liens, such as taxes, insurance premiums or deeds of trust. A breach of or default in connection with a senior lien by the borrower most likely constitutes an event of default under your deed of trust. It is therefore important that the status of all senior liens be monitored. Before investing in a junior deed of trust, you should determine the amount of debt service (payments) required to maintain the senior lien(s). To protect your investment during any senior lien (loan) foreclosure, it may be necessary for you to maintain the payments (with your own money) on all senior liens. You may lose your interest in the property securing the loan if a senior lien forecloses on the property.

There will be other costs associated with enforcing a mortgage loan, such as attorney’s fees and processing fees, and there will likely be a delay of some months before the foreclosure process is complete. Issues such as whether to commence a judicial or nonjudicial foreclosure, deficiency judgments, rents and profits if the property is income-producing, and bankruptcy may also need to be addressed.

(At least 14-point type)

If you have questions.

(At least 10-point type)

If you have any questions regarding any of the issues discussed in this disclosure form, discuss them with your mortgage broker, lawyer or financial adviser, or a trusted friend or family member. No one can guarantee that a particular investment will be risk free, but with information about the specific risks involved, you can take steps to minimize your risk.

Loan:

Investor signature required: __________________________________________________________________

Title (if investor is a corporation, partnership or limited-liability company): ______________________________

Dated:

Mortgage Broker Signature: __________________________________________________________________

Dated:

2. If the investor is a corporation, the disclosure form required pursuant to NRS 645B.185 may be signed by any person authorized to sign the form on behalf of the corporation, except a mortgage broker or mortgage agent.

(Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004)

NAC 645B.230 Provision to Division of financial statement for investors. (NRS 645B.060, 645B.185)

1. A mortgage broker may submit to the Division a financial statement to be provided to an investor pursuant to subsection 3 of NRS 645B.185 that:

(a) Is dated not earlier than the last day of the most recently completed 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. A financial statement submitted to the Division by a mortgage broker pursuant to this section:

(a) Must contain a notation indicating that it is a financial statement to be provided to investors pursuant to subsection 3 of NRS 645B.185.

(b) Need not be audited, but the provisions of this section do not affect any obligation of the mortgage broker to submit an audited financial statement to the Division pursuant to subsection 3 of NRS 645B.085.

(Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000)

NAC 645B.235 Disclosures to borrowers by certain persons acting in dual capacity. (NRS 645B.060)

1. A mortgage broker, mortgage agent or qualified employee who is also licensed as a real estate broker or real estate salesman and who acts in both capacities in a single transaction must make to the borrower the disclosures set forth on the form prescribed by the Division pursuant to subsection 2, including, but not limited to:

(a) Whether the mortgage broker, mortgage agent or qualified employee will be receiving compensation for acting as a mortgage broker, mortgage agent or qualified employee and as a real estate broker or real estate salesman in the same transaction;

(b) That the borrower is under no obligation to allow the real estate broker or real estate salesman to submit the loan package of the borrower to a mortgage broker, mortgage agent or qualified employee; and

(c) That the borrower may contact other mortgage brokers or mortgage agents to determine if the borrower is receiving the best services related to the loan and the best prices for those services.

2. The mortgage broker, mortgage agent or qualified employee shall provide the disclosures required pursuant to subsection 1 to the borrower at the time of application for a loan and in the following format:

(At least 14-point font)

BORROWER(S)

ACKNOWLEDGMENT AND AGREEMENT CONCERNING

DUAL CAPACITY AS REAL ESTATE SALES AGENT AND MORTGAGE LOAN AGENT

(At least 12-point bold font)

Borrower(s) are under no obligation whatsoever to allow their real estate sales agent to initiate or submit the borrower(s) loan package to any mortgage lender, broker, banker or investor. Mortgage brokers and other loan originators cannot offer loans from all funding sources and cannot guarantee the lowest price or best terms available in the market.

There may be other mortgage loan providers available with similar services and lower rates and/or fees. You are free and encouraged to contact various lenders to determine that you are receiving the best service and rates and lowest fees for those services. A comparative analysis of providers’ services, rates and fees is recommended prior to making a decision on which lender to use.

(At least 10-point font)

Borrower(s) are hereby informed and expressly acknowledge the following:

· Real estate sales agent _________________, hereinafter referred to as “agent,” is also associated with _____________________ (mortgage broker/banker) and is acting in the dual capacity as both mortgage loan agent and real estate sales agent and shall receive compensation from the real estate sales transaction and separate compensation for arranging the mortgage loan.

· Real estate company _____________________________ (check one of the following):

_________Does have a business relationship with the licensed mortgage broker/banker or exempt company to which your loan is referred. Because of this relationship, this referral may provide the real estate company named above a financial or other benefit.

Describe the nature of the relationship, including percentage of ownership interest, if applicable._______________________

_________________________________________________________________________________________________

· _________Does not have a business relationship with the licensed mortgage broker/banker or exempt company to which your loan is referred.

The mortgage broker/banker must provide you with a good faith estimate disclosing all estimated costs of the loan, including the yield spread premium (YSP.) The YSP is income paid to a mortgage broker upon delivery of a mortgage loan to a lender at a premium interest rate.

By signing I/we confirm my/our understanding of the information provided herein.

BORROWER BORROWER

_________________________________________ _________________________________________

By signing this form, the mortgage loan agent agrees that any fees paid to the mortgage broker/banker/agent as referred to above will not increase the cost of borrower(s) loan beyond the normal and customary charges typically collected by mortgage lenders, brokers or investors.

MORTGAGE BROKER/QUALIFIED EMPLOYEE/AGENT

_________________________________________

If you have any questions regarding your mortgage loan agent or loan, please visit the Division of Mortgage Lending website at <http://www.mld.nv.gov> or call 702.486.0780 in Las Vegas or 775.684.7060 in Northern Nevada.

3. As used in this section:

(a) “Real estate broker” has the meaning ascribed to it in NRS 645.030; and

(b) “Real estate salesman” has the meaning ascribed to it in NRS 645.040.

(Added to NAC by Comm’r of Mortgage Lending by R087-04, eff. 8-31-2004)

NAC 645B.240 Representation of activity as licensed; advertisements; disclosure to investors; Internet links. (NRS 645B.060, 645B.189)

1. A licensed mortgage broker shall not represent an activity which is not licensed pursuant to chapter 645B of NRS as being licensed pursuant to that chapter.

2. Except as otherwise provided in subsection 3, an advertisement for an activity which is licensed pursuant to chapter 645B of NRS must be separate and distinct from an advertisement for an activity which is not licensed pursuant to that chapter.

3. A mortgage broker may advertise jointly with a company licensed pursuant to chapter 624 or 645 of NRS if each business is disclosed separately in the advertisement and each business incurs a pro rata share of the cost associated with the advertisement.

4. A licensed mortgage broker must include in his advertisements, including any advertising material available on the Internet:

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

(b) The address and telephone number that the mortgage broker has on file with the Division. Additional telephone or cellular phone numbers of the mortgage broker may also be included.

5. A mortgage broker shall not use advertising material that simulates the appearance of a check, a communication from a government entity, or an envelope containing a check or a communication from a government entity, unless:

(a) The words “THIS IS NOT A CHECK,” “NOT NEGOTIABLE” or “THIS IS NOT A GOVERNMENT ENTITY,” as appropriate, appear prominently on the envelope and any material that simulates the appearance of a check or a communication from a government entity; and

(b) If the material simulates the appearance of a check, the material does not contain an American Bankers Association number, microencoding or any other marks intended to create the appearance that the material is a negotiable check.

6. Provided the representation of interest rates in advertisements complies with Regulation Z, 12 C.F.R. Part 226, and the content will continue to comply with this chapter and chapter 645B of NRS regarding advertising, a mortgage broker may make nonsubstantive changes to his advertisements without additional approval from the Commissioner. For the purposes of this subsection, “nonsubstantive changes” means:

(a) Interest rates that are quoted in the advertisement and any corresponding annual percentage rates;

(b) Promoting another mortgage agent in the same format of advertisement;

(d) Placing links on websites that direct the user to noncommercial or consumer education websites;

(e) Telephone or cellular phone numbers other than the phone number that the mortgage broker has on file with the Division; and

(f) Changes to words used in the advertisement that do not alter the content of the advertisement.

7. Approvals for advertising must be maintained at the location of the mortgage broker and must be available for inspection for at least 1 year after the last day that the advertisement is used.

8. For the purposes of NRS 645B.189, disclosures in advertisements and distributions to investors must include the following language:

Prior to investing in a loan, investors must be provided applicable disclosure documents.

9. The mortgage broker is not required to obtain approval from the Division for white-page listings, employment recruiting announcements, office signs, banners, magnetic car signs, business cards and letterhead which contain only the name, address and telephone number of the mortgage broker, whether together or separate, and which are used for the purpose of identification only.

10. An Internet link on a website of the mortgage broker that links the user to the website of another commercial enterprise must provide notification to the user that the user is leaving the website of the mortgage broker.

11. For the purposes of this section, “advertising” includes commercial messages that promote the availability of mortgage products or investments offered by the mortgage broker. Commercial messages include, but are not limited to:

(a) Print media;

(b) Sales literature;

(d) Billboards;

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

(f ) Radio and television advertisements;

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

(h) Telephone or seminar scripts; and

(i) Websites or other Internet sites that promote or accept loan applications.

[Comm’r of Savings Associations, Mortgage Reg. § 11, eff. 6-29-82]—(NAC A by Comm’r of Financial Institutions, 5-19-88; R045-00, 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004)

CONDITIONS AND LIMITATIONS ON CERTAIN MORTGAGE TRANSACTIONS

NAC 645B.250 Prohibition against acting as trustee or substitute trustee under certain circumstances; exception. (NRS 645B.060)

1. Except as otherwise provided in subsection 3, a mortgage broker and any partnership, corporation or limited-liability company in which the mortgage broker or any officer, director, employee or relative of the mortgage broker has a controlling interest shall not act as a trustee or substitute trustee for any deed of trust for which the mortgage broker acted at any time as an investor, mortgage broker or holder of a beneficial interest if the loan for which the deed of trust was executed was funded in whole or in part by a person other than the mortgage broker or has been assigned in whole or in part to one or more natural persons.

2. Except as otherwise provided in subsection 3, an officer, director or employee of a mortgage broker, a relative of any officer, director or employee of a mortgage broker, or an officer, director or employee of any corporation, partnership or limited-liability company that has a controlling interest in a mortgage broker shall not act as a trustee or substitute trustee for any deed of trust for which the mortgage broker acted at any time as an investor, mortgage broker or holder of a beneficial interest if the loan for which the deed of trust was executed was funded in whole or in part by a person other than the mortgage broker or has been assigned in whole or in part to one or more natural persons.

3. A mortgage broker may act as substitute trustee in a deed of trust for the purpose of reconveying title to the trustor upon payment in full of the note if the mortgage broker receives a signed and notarized statement from each person holding a beneficial interest in the note, or the agent of that person, authorizing the mortgage broker to so act and directing the disposition of the share of the money received for that person to pay the loan in full. The statement must be executed within 45 days before the execution of the deed of reconveyance. The mortgage broker and his officers, directors and employees shall not act as the agent for that person for the purpose of executing the statement required by this section.

(Added to NAC by Comm’r of Financial Institutions, eff. 6-20-97; A by R045-00, 9-5-2000)—(Substituted in revision for NAC 645B.145)

NAC 645B.260 Decisions regarding investments. (NRS 645B.060) All decisions regarding the funding of investments in mortgages must be made by the investor.

[Comm’r of Savings Associations, Mortgage Reg. § 10, eff. 6-29-82]—(NAC A by Comm’r of Financial Institutions by R045-00, 9-5-2000)—(Substituted in revision for NAC 645B.100)

NAC 645B.270 Standards for appraisals. (NRS 645B.060, 645B.300) An appraisal submitted to an investor pursuant to NAC 645B.080 must:

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

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

[Comm’r of Savings Associations, Mortgage Reg. § 12, eff. 6-29-82]—(NAC A by Comm’r of Financial Institutions by R045-00, 9-5-2000)

NAC 645B.280 Power of attorney: Submission to and action by Commissioner; maintenance of written communications; extension of term; inclusion of date of approval. (NRS 645B.060, 645B.330)

1. Before a mortgage broker or mortgage agent engages in any act or transaction on behalf of an investor pursuant to a power of attorney, the power of attorney must first be submitted to the Commissioner for approval. The Commissioner will, within 15 business days after receiving a request for approval of a power of attorney:

(a) Approve the power of attorney;

(b) Approve the power of attorney on the condition that the mortgage broker amend the power of attorney as directed by the Commissioner;

(d) Provide notice in writing to the person who requested the power of attorney that an additional period of time, not to exceed 15 business days, is needed by the Commissioner to act on the request for approval of the power of attorney.

2. The mortgage broker shall maintain in his file all written communications relating to the request for approval of the power of attorney.

3. Any writing executed or issued by a person extending the term of a power of attorney must be dated, and the mortgage broker shall maintain a copy of the extension in the file of the mortgage broker.

4. A power of attorney approved by the Commissioner pursuant to this section must state the date that the Commissioner approved the power of attorney. If the mortgage broker materially changes the power of attorney, the mortgage broker must resubmit the power of attorney to the Commissioner for approval before the mortgage broker uses the power of attorney.

(Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004)

NAC 645B.290 Power of attorney: Form. (NRS 645B.060, 645B.330) The power of attorney required pursuant to NRS 645B.330 must be in substantially the following form:

Special Power of Attorney

The undersigned, ________________________, does hereby appoint (name of mortgage broker) my true and lawful attorney, to perform services related to the following loan in which I own a beneficial interest: _______________________. The services to be performed are described below:

(Describe services here)

This power of attorney shall not be effective to authorize any transaction that subordinates the priority of the recorded deed of trust that secures this loan unless accompanied by a writing issued by the undersigned that consents to such subordination.

This power of attorney shall not be effective to authorize the use or release of money in which the undersigned owns a beneficial interest for any purpose except for the provision of the services described above relating to the loan described above unless accompanied by written authorization by the undersigned for the use or release of money for the other purpose.

This power of attorney is effective only for the term of the specific loan described above unless the mortgage broker obtains written approval from the undersigned to extend the term of the power of attorney to provide services for not more than one other loan. The written approval must identify the loan for which the power of attorney was executed and the loan for which the power of attorney is being given.

I give and grant to my said attorney full power to execute in my name contracts, escrow instructions, conveyances, mortgages, deeds of trust, and all other documents necessary to carry out the services described herein as fully to all intents and purposes as the undersigned might or could do if personally present, hereby ratifying and confirming all that my said attorney shall lawfully do, or cause to be done, by virtue of these presents.

Witness my hand this _______ day of _____________________, ________.

____________________________________

State of ______________

County of ____________

This instrument was acknowledged before me on (date) , by (name(s) of person(s)

____________________________________

(Signature of notarial officer)

(Seal if any)

____________________________________

(Title and rank (optional))

(My commission expires (optional) )

Approved by the Commissioner of Mortgage Lending on _________________.

(Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004)

LICENSING AND REGULATION OF MORTGAGE AGENTS

NAC 645B.300 Application for licensing; association with or employment by mortgage broker; investigation of background; effective date and invalidation of license; confidentiality of certain documents. (NRS 645B.060, 645B.410, 645B.450)

1. A mortgage broker and any mortgage agent must sign the application for licensing required pursuant to NRS 645B.410.

2. A mortgage agent may associate with or be employed by a mortgage broker at only one licensed office location of the mortgage broker and may not associate with or be employed by a mortgage broker who is exempt from the provisions of chapter 645B of NRS or whose office is located outside this State.

3. Upon request of a mortgage broker, the Commissioner may waive the requirement of an investigation of the credit history, criminal history and background of a mortgage agent if such an investigation has been conducted within 1 year immediately preceding the date the application is submitted.

4. The license of a mortgage agent pursuant to this section is effective upon the date that the mortgage broker files the form with the Division, but must be invalidated by the Division if, upon investigation, the Division determines that the mortgage agent does not meet the requirements of NRS 645B.410. The Division will notify the mortgage broker and the mortgage agent in writing if a license is invalidated pursuant to this subsection.

5. The report of an investigation of the credit history, criminal history and background of a mortgage agent is confidential, and the Commissioner will release the report only pursuant to a valid subpoena or court order.

6. The written statement of the circumstances surrounding the termination of a mortgage agent required by subparagraph (2) of paragraph (b) of subsection 3 of NRS 645B.450 will be considered a public record.

(Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004)

NAC 645B.310 Determination by Commissioner of adequate supervision of mortgage agent by mortgage broker. (NRS 645B.060, 645B.460) In determining whether a mortgage broker has maintained adequate supervision of a mortgage agent, the Commissioner will consider whether:

1. The mortgage broker has made a reasonable effort to investigate the background and experience of a prospective mortgage agent and hire only a mortgage agent whose background and experience indicate that the person is trustworthy and competent to conduct the business of a mortgage agent;

2. The mortgage broker has adopted and followed any policies and procedures, written or oral, relating to the supervision and training of mortgage agents;

3. The mortgage agent has followed the policies and procedures of the mortgage broker, written or oral, governing his activities;

4. The mortgage broker has established and followed a system of review for compliance with his written or oral policies and procedures;

5. The policies and procedures of the mortgage broker require regular review of the work of a mortgage agent;

6. The mortgage broker reviewed the work of the mortgage agent in the case under examination by the Commissioner;

7. The policies and procedures of the mortgage broker include training in the requirements of this chapter and chapter 645B of NRS;

8. The mortgage broker makes copies of this chapter and chapter 645B of NRS available to mortgage agents;

9. The policies and procedures of the mortgage broker include a provision for continuing education for mortgage agents;

10. The mortgage broker spends a sufficient amount of time in the office where the mortgage agent is working;

11. The mortgage broker has received or acted on previous reports of alleged misconduct by the mortgage agent; and

12. Review of the previous work of the mortgage agent would have disclosed a problem with the conduct or issue being examined by the Commissioner.

(Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000)

ENFORCEMENT

NAC 645B.320 Complaint alleging violation. (NRS 645B.060, 645B.600)

1. A complaint filed pursuant to NRS 645B.600 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 the address and telephone number of the person filing the complaint or the authorized representative of the person filing the complaint;

(d) Describe the nature of the complaint in as much detail as possible; and

(e) Include as exhibits copies of any documentation supporting the complaint.

2. If the Commissioner determines that a complaint filed pursuant to subsection 1 contains an alleged action which, if true, violates a provision of this chapter or chapter 645B of NRS or an order of the Commissioner, the Commissioner will investigate each such violation alleged in the complaint, unless the Commissioner has previously investigated the alleged violation.

3. 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 2 because the Commissioner determines that the alleged action, if true, does not violate a provision of this chapter or chapter 645B of NRS or an order of the Commissioner, the Commissioner will provide to the person who filed the complaint a written summary of the reasons for his decision.

4. The Commissioner will provide a copy of the written complaint to the person against whom the complaint is filed pursuant to NRS 645B.600 and may order the person to respond in writing to the written complaint within a period of time specified by the Commissioner.

(Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000)

NAC 645B.330 Referral of certain suspected violations for investigation and action; grounds for disciplinary action. (NRS 645B.060, 645B.670)

1. The Commissioner may refer to the appropriate federal or state agency for investigation and appropriate action each suspected violation of:

(a) The Truth in Lending Act, 15 U.S.C. §§ 1601 to 1667f, inclusive, including, without limitation, the Home Ownership and Equity Protection Act of 1994, 15 U.S.C. § 1639, or Regulation Z, 12 C.F.R. Part 226.

(b) The Equal Credit Opportunity Act, 15 U.S.C. §§ 1691 to 1691f, inclusive, or Regulation B, 12 C.F.R. Part 202.

(c) The Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2601 to 2617, inclusive, or Regulation X, 24 C.F.R. Part 3500.

2. For the purposes of NRS 645B.670, a mortgage broker commits a violation if the mortgage broker or a mortgage agent associated with the mortgage broker:

(a) Engages in a deceptive trade practice as defined in chapter 598 of NRS;

(b) Fails to refund any fees collected in excess of the actual cost the mortgage broker incurs or pays for any appraisal, credit report or any other product or service provided by a third party in connection with the making of a loan; or

(1) The Truth in Lending Act, 15 U.S.C. §§ 1601 to 1667f, inclusive, including, without limitation, the Home Ownership and Equity Protection Act of 1994, 15 U.S.C. § 1639, or Regulation Z, 12 C.F.R. Part 226.

(2) The Equal Credit Opportunity Act, 15 U.S.C. §§ 1691 to 1691f, inclusive, or Regulation B, 12 C.F.R. Part 202.

(3) The Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2601 to 2617, inclusive, or Regulation X, 24 C.F.R. Part 3500.

(4) Any other applicable federal or state law or regulation related to mortgage transactions.

(Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000; A by Comm’r of Mortgage Lending by R087-04, 8-31-2004)

NAC 645B.340 Order to cease and desist from certain activities. (NRS 645B.060, 645B.720)

1. If a person engages in an activity in violation of the provisions of this chapter or chapter 645B of NRS, the Commissioner may issue an order to the person directing the person to cease and desist from engaging in the activity.

2. The order to cease and desist must be in writing and must state that, in the opinion of the Commissioner, the person has engaged in an activity:

(a) For which the person has not received a license or certificate of exemption as required by chapter 645B of NRS; or

(b) In a manner that violates the provisions of this chapter or chapter 645B of NRS.

3. A person who receives an order to cease and desist pursuant to this section shall not engage in any activity governed by chapter 645B of NRS after he receives the order unless the order is suspended or rescinded.

4. Not later than 30 calendar days after receiving an order pursuant to this section, the person who receives the order may file a verified petition with the Commissioner to request a hearing. Upon receipt of the verified petition, the Commissioner may, for good cause shown, suspend the order pending the hearing. The Commissioner will hold the hearing on a date not later than 30 calendar days after the date the petition is filed unless the Commissioner and the person agree to another date. The order to cease and desist is rescinded if the Commissioner fails to:

(a) Hold a hearing:

(1) Not later than 30 calendar days after the date the petition is filed; or

(2) On a date agreed to by the Commissioner and the person; or

(b) Render a written decision within 45 days after the date the hearing is concluded.

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

(Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000)—(Substituted in revision for NAC 645B.051)

NAC 645B.350 Suspension or revocation of license for major violation. (NRS 645B.060, 645B.700) The Commissioner will suspend or revoke the license of a person who commits a major violation.

(Added to NAC by Comm’r of Financial Institutions by R045-00, eff. 9-5-2000)

CONTINUING EDUCATION

NAC 645B.360 Designation of agencies to certify courses. (NRS 645B.051, 645B.060, 645B.430) The Commissioner hereby designates the following organizations to certify courses of continuing education for the purposes of NRS 645B.051 and 645B.430:

1. Mortgage Bankers Association;

2. Mortgage Bankers Association of Nevada;

3. National Association of Professional Mortgage Women;

4. Nevada Association of Mortgage Brokers;

5. The Real Estate Division of the Department of Business and Industry; and

6. Nevada System of Higher Education.

(Added to NAC by Comm’r of Mortgage Lending by R087-04, eff. 8-31-2004)

NAC 645B.365 Prerequisites to receipt of credit for course. (NRS 645B.051, 645B.060, 645B.430)

1. To obtain credit for a course of continuing education, the course must be completed not more than 2 years before the date on which the license of the mortgage broker or mortgage agent would otherwise expire pursuant to NRS 645B.051 or 645B.430.

2. A mortgage broker or mortgage agent must complete at least 90 percent of a course to receive credit for continuing education for that course.

(Added to NAC by Comm’r of Mortgage Lending by R087-04, eff. 8-31-2004)