NRS: CHAPTER 645E - MORTGAGE BANKERS

[Rev. 1/18/2009 1:54:10 PM]

CHAPTER 645E - MORTGAGE BANKERS

GENERAL PROVISIONS

NRS 645E.010 Definitions.

NRS 645E.020 “Applicant” defined.

NRS 645E.030 “Commercial mortgage loan” defined.

NRS 645E.040 “Commercial property” defined.

NRS 645E.050 “Commissioner” defined.

NRS 645E.060 “Depository financial institution” defined.

NRS 645E.070 “Division” defined.

NRS 645E.080 “Institutional investor” defined.

NRS 645E.090 “Licensee” defined.

NRS 645E.100 “Mortgage banker” defined.

NRS 645E.130 Statutory and common-law rights, remedies and punishments unaffected; limitation on actions against State and its officers and employees.

EXEMPTIONS

NRS 645E.150 Exemptions for certain persons and entities.

NRS 645E.160 Certificate of exemption required for certain persons and entities; application; fee; automatic expiration; prohibitions; administrative fines.

NRS 645E.170 Exemptions for certain loans; application; grounds for granting exemption; powers and duties of Commissioner.

LICENSING

NRS 645E.200 Application for license; application for branch offices; requirements for issuance of license; grounds for denial of license to partnership, corporation or unincorporated association; license for office outside Nevada which conducts business in Nevada.

NRS 645E.210 Payment of child support: Submission of certain information by applicant; grounds for denial of license; duty of Commissioner. [Effective until the date of the repeal of the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings.]

NRS 645E.210 Payment of child support: Submission of certain information by applicant; grounds for denial of license; duty of Commissioner. [Effective on the date of the repeal of the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings and expires by limitation 2 years after that date.]

NRS 645E.220 Posting of license; restrictions on transfer or assignment of license.

NRS 645E.230 Activities authorized by license; dual licensure as mortgage banker and mortgage broker.

EXPIRATION AND RENEWAL OF LICENSE OR CERTIFICATE OF EXEMPTION; FEES

NRS 645E.280 Annual expiration of license or certificate of exemption; procedure for renewal; fees.

SUPERVISION BY COMMISSIONER

General Provisions

NRS 645E.300 Duties of Commissioner: Regulations; investigations; annual examinations; periodic and special audits; hearings; related fees; biennial examinations.

NRS 645E.310 Subpoenas; oaths; examination of witnesses; penalty; assessment of costs.

NRS 645E.315 Written notice of address change; approval by Commissioner; administrative fine.

NRS 645E.320 Payment of statutory assessment by mortgage banker; duty of mortgage banker to cooperate fully with audits and examinations.

Records and Financial Statements

NRS 645E.350 Records relating to mortgage transactions, financial condition and trust accounts; monthly report to Commissioner; accounting procedures for trust accounts; regulations; records of licensee who operates outside Nevada.

NRS 645E.360 Annual financial statement; audit of trust accounts; regulations.

NRS 645E.370 Records of Commissioner: General provisions governing public inspection and confidentiality.

NRS 645E.375 Records of Commissioner: Certain records relating to investigation deemed confidential; certain records relating to disciplinary action deemed public records.

Transfer of Stock

NRS 645E.390 Notification of certain transfers required; application to Commissioner for approval of change of control; investigation; waiver.

ESCROW AND TRUST ACCOUNTS

NRS 645E.420 Escrow account required for fee, salary, deposit or money paid in advance; release from escrow; exceptions; refunds; penalty.

NRS 645E.430 Trust account required for money deposited to pay taxes or insurance premiums; fiduciary duty of mortgage banker; accounting to debtor and Commissioner; additional duties and prohibitions.

NRS 645E.440 Limitations on execution or attachment of money in trust account; commingling of money prohibited.

LOAN PAYMENTS

NRS 645E.470 Limitations on charging late fee, additional amount of interest or other penalty.

INVESTIGATION OF VIOLATIONS AND UNSAFE PRACTICES; REMEDIAL ACTION

NRS 645E.620 Authority of Commissioner when violation is suspected; referral of violations to district attorney for criminal prosecution; civil action for injunctive relief.

NRS 645E.630 Authority of Commissioner when unsafe condition or practice is suspected; seizure of property and assets of mortgage banker; duties of Attorney General.

NRS 645E.640 Persons entitled to correct unsafe conditions and practices; effect of failure to correct; receivership and liquidation of assets.

DISCIPLINARY ACTION

NRS 645E.670 Authorized disciplinary action; grounds for disciplinary action; orders imposing discipline deemed public records.

NRS 645E.680 Suspension of license for failure to pay child support or comply with certain subpoenas or warrants; reinstatement of license. [Effective until 2 years after the date of the repeal of the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings.]

NRS 645E.710 Act or omission of partner, officer or director deemed act or omission of partnership, corporation or unincorporated association.

HEARINGS; APPEALS

NRS 645E.750 Duty of Commissioner to provide written notice of disciplinary action or denial of license; right to administrative hearing; entry of final order; appeals.

UNLAWFUL ACTS; PENALTIES

NRS 645E.900 Unlawful to conduct business of mortgage banker without being licensed or exempt from licensing.

NRS 645E.910 Unlawful for foreign corporation, association or business trust to conduct business of mortgage banker without meeting certain requirements.

NRS 645E.950 Penalties for general violations.

NRS 645E.960 Penalties for violations relating to escrow or trust accounts.

_________

GENERAL PROVISIONS

NRS 645E.010 Definitions. As used in this chapter, unless the context otherwise requires, the words and terms defined in NRS 645E.020 to 645E.100, inclusive, have the meanings ascribed to them in those sections.

(Added to NRS by 1999, 3744)

NRS 645E.020 “Applicant” defined. “Applicant” means a person who applies for licensure as a mortgage banker pursuant to this chapter.

(Added to NRS by 1999, 3744; A 2003, 3558)

NRS 645E.030 “Commercial mortgage loan” defined. “Commercial mortgage loan” means a loan that:

1. Directly or indirectly, is secured by a lien on commercial property; and

2. Is created with the consent of the owner of the commercial property.

(Added to NRS by 1999, 3744)

NRS 645E.040 “Commercial property” defined. “Commercial property” means any real property which is located in this state and which is not used for a residential dwelling or dwellings intended for occupancy by four or fewer families.

(Added to NRS by 1999, 3744)

NRS 645E.050 “Commissioner” defined. “Commissioner” means the Commissioner of Mortgage Lending.

(Added to NRS by 1999, 3744; A 2003, 3558)

NRS 645E.060 “Depository financial institution” defined. “Depository financial institution” means a bank, savings and loan association, thrift company or credit union.

(Added to NRS by 1999, 3744)

NRS 645E.070 “Division” defined. “Division” means the Division of Mortgage Lending of the Department of Business and Industry.

(Added to NRS by 1999, 3744; A 2003, 3558)

NRS 645E.080 “Institutional investor” defined. “Institutional investor” means a person who, in the regular course of business, makes commercial mortgage loans of more than $250,000 that are funded exclusively from one or more of the following sources:

1. The person’s cash, corporate capital or warehouse credit lines at a depository financial institution or other sources that are liability items on the person’s financial statements.

2. Correspondent contracts between the person and another institutional investor or between the person and a depository financial institution, trust company, profit-sharing or pension trust, installment lender or insurance company.

3. An affiliate’s cash, corporate capital or warehouse credit lines at a depository financial institution or other sources that are liability items on the affiliate’s financial statements for which the affiliate’s assets are pledged. As used in this subsection, “affiliate” means another person who, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the person who is the institutional investor.

(Added to NRS by 1999, 3745)

NRS 645E.090 “Licensee” defined. “Licensee” means a person who is licensed as a mortgage banker pursuant to this chapter.

(Added to NRS by 1999, 3745; A 2003, 3558)

NRS 645E.100 “Mortgage banker” defined.

1. “Mortgage banker” means any of the following:

(a) A person who, directly or indirectly:

(1) Holds himself out as being able to:

(I) Buy or sell notes secured by liens on real property; or

(II) Make loans secured by liens on real property using his own money; and

(2) Does not engage in any other act or transaction described in the definition of “mortgage broker,” as set forth in NRS 645B.0127, unless the person is also licensed as a mortgage broker pursuant to chapter 645B of NRS.

(b) A person who, directly or indirectly:

(1) Negotiates, originates or makes or offers to negotiate, originate or make commercial mortgage loans as an agent for or on behalf of an institutional investor; and

2. For the purposes of this section, a person does not make a loan secured by a lien on real property using his own money if any portion of the money that is used to make the loan is provided by another person who acquires ownership of or a beneficial interest in the loan.

(Added to NRS by 1999, 3745; A 2003, 3558)

NRS 645E.130 Statutory and common-law rights, remedies and punishments unaffected; limitation on actions against State and its officers and employees. The provisions of this chapter do not:

1. Limit any statutory or common-law right of a person to bring a civil action against a mortgage banker for any act or omission involved in the transaction of business by or on behalf of the mortgage banker;

2. Limit the right of the State to punish a person for the violation of any law, ordinance or regulation; or

3. Establish a basis for a person to bring a civil action against the State or its officers or employees for any act or omission in carrying out the provisions of this chapter, including, without limitation, any act or omission relating to the disclosure of information or the failure to disclose information pursuant to the provisions of this chapter.

(Added to NRS by 1999, 3745; A 2003, 3558)

EXEMPTIONS

NRS 645E.150 Exemptions for certain persons and entities. Except as otherwise provided in NRS 645E.160, the provisions of this chapter do not apply to:

1. Any person doing business under the laws of this State, any other state or the United States relating to banks, savings banks, trust companies, savings and loan associations, consumer finance companies, industrial loan companies, credit unions, thrift companies or insurance companies, including, without limitation, a subsidiary or a holding company of such a bank, company, association or union.

2. A real estate investment trust, as defined in 26 U.S.C. § 856, unless the business conducted in this State is not subject to supervision by the regulatory authority of the other jurisdiction, in which case licensing pursuant to this chapter is required.

3. An employee benefit plan, as defined in 29 U.S.C. § 1002(3), if the loan is made directly from money in the plan by the plan’s trustee.

4. An attorney at law rendering services in the performance of his duties as an attorney at law.

5. A real estate broker rendering services in the performance of his duties as a real estate broker.

6. Any person doing any act under an order of any court.

7. Any one natural person, or husband and wife, who provides money for investment in loans secured by a lien on real property, on his own account, unless such a person makes a loan secured by a lien on real property using his own money and assigns all or a part of his interest in the loan to another person, other than his spouse or child, within 5 years after the date on which the loan is made or the deed of trust is recorded, whichever occurs later.

8. Agencies of the United States and of this State and its political subdivisions, including the Public Employees’ Retirement System.

9. A seller of real property who offers credit secured by a mortgage of the property sold.

(Added to NRS by 1999, 3746; A 2003, 3559; 2007, 959)

NRS 645E.160 Certificate of exemption required for certain persons and entities; application; fee; automatic expiration; prohibitions; administrative fines.

1. Except as otherwise provided in subsection 2, a person who claims an exemption from the provisions of this chapter pursuant to subsection 1 of NRS 645E.150 must:

(a) File a written application for a certificate of exemption with the Office of the Commissioner;

(b) Pay the fee required pursuant to NRS 645E.280;

(c) Include with the written application satisfactory proof that the person meets the requirements of subsection 1 of NRS 645E.150; and

(d) Provide evidence to the Commissioner that the person is duly licensed to conduct his business and such license is in good standing pursuant to the laws of this State, any other state or the United States.

2. The provisions of subsection 1 do not apply to the extent preempted by federal law.

3. The Commissioner may require a person who claims an exemption from the provisions of this chapter pursuant to subsections 2 to 9, inclusive, of NRS 645E.150 to:

(a) File a written application for a certificate of exemption with the Office of the Commissioner;

(b) Pay the fee required pursuant to NRS 645E.280; and

(c) Include with the written application satisfactory proof that the person meets the requirements of at least one of those exemptions.

4. A certificate of exemption expires automatically if, at any time, the person who claims the exemption no longer meets the requirements of at least one exemption set forth in the provisions of NRS 645E.150.

5. If a certificate of exemption expires automatically pursuant to this section, the person shall not provide any of the services of a mortgage banker or otherwise engage in, carry on or hold himself out as engaging in or carrying on the business of a mortgage banker unless the person applies for and is issued:

(a) A license as a mortgage banker pursuant to this chapter; or

(b) Another certificate of exemption.

6. The Commissioner may impose upon a person who is required to apply for a certificate of exemption or who holds a certificate of exemption an administrative fine of not more than $10,000 for each violation that he commits, if the person:

(a) Has knowingly made or caused to be made to the Commissioner any false representation of material fact;

(b) Has suppressed or withheld from the Commissioner any information which the person possesses and which, if submitted by him, would have rendered the person ineligible to hold a certificate of exemption; or

(c) Has violated any provision of this chapter, a regulation adopted pursuant to this chapter or an order of the Commissioner that applies to a person who is required to apply for a certificate of exemption or who holds a certificate of exemption.

(Added to NRS by 1999, 3746; A 2003, 3559; 2007, 960)

NRS 645E.170 Exemptions for certain loans; application; grounds for granting exemption; powers and duties of Commissioner.

1. A person may apply to the Commissioner for an exemption from the provisions of this chapter governing the making of a loan of money.

2. The Commissioner may grant the exemption if he finds that:

(a) The making of the loan would not be detrimental to the financial condition of the lender or the debtor;

(b) The lender or the debtor has established a record of sound performance, efficient management, financial responsibility and integrity;

(d) The making of the loan is not detrimental to the public interest.

3. The Commissioner:

(a) May revoke an exemption unless the loan for which the exemption was granted has been made; and

(b) Shall issue a written statement setting forth the reasons for his decision to grant, deny or revoke an exemption.

(Added to NRS by 1999, 3747)

LICENSING

1. A person who wishes to be licensed as a mortgage banker must file a written application for a license with the Office of the Commissioner and pay the fee required pursuant to NRS 645E.280. An application for a license as a mortgage banker must:

(a) Be verified.

(b) State the name, residence address and business address of the applicant and the location of each principal office and branch office at which the mortgage banker will conduct business in this State, including, without limitation, any office or other place of business located outside this State from which the mortgage banker will conduct business in this State.

(d) If the applicant is not a natural person, list the name, residence address and business address of each person who will have an interest in the mortgage banker as a principal, partner, officer, director or trustee, specifying the capacity and title of each such person.

(e) Indicate the general plan and character of the business.

(f) State the length of time the applicant has been engaged in the business of a mortgage banker.

(g) Include a financial statement of the applicant.

(h) Include any other information required pursuant to the regulations adopted by the Commissioner or an order of the Commissioner.

2. If a mortgage banker will conduct business in this State at one or more branch offices, the mortgage banker must apply for a license for each such branch office.

3. Except as otherwise provided in this chapter, the Commissioner shall issue a license to an applicant as a mortgage banker if:

(a) The application complies with the requirements of this chapter; and

(b) The applicant and each general partner, officer or director of the applicant, if the applicant is a partnership, corporation or unincorporated association:

(1) Has a good reputation for honesty, trustworthiness and integrity and displays competence to transact the business of a mortgage banker in a manner which safeguards the interests of the general public. The applicant must submit satisfactory proof of these qualifications to the Commissioner.

(2) Has not been convicted of, or entered a plea of nolo contendere to, a felony relating to the practice of mortgage bankers or any crime involving fraud, misrepresentation or moral turpitude.

(3) Has not made a false statement of material fact on his application.

(4) Has not had a license that was issued pursuant to the provisions of this chapter or chapter 645B of NRS suspended or revoked within the 10 years immediately preceding the date of his application.

(5) Has not had a license that was issued in any other state, district or territory of the United States or any foreign country suspended or revoked within the 10 years immediately preceding the date of his application.

(6) Has not violated any provision of this chapter or chapter 645B of NRS, a regulation adopted pursuant thereto or an order of the Commissioner.

4. If an applicant is a partnership, corporation or unincorporated association, the Commissioner may refuse to issue a license to the applicant if any member of the partnership or any officer or director of the corporation or unincorporated association has committed any act or omission that would be cause for refusing to issue a license to a natural person.

5. A person may apply for a license for an office or other place of business located outside this State from which the applicant will conduct business in this State if the applicant or a subsidiary or affiliate of the applicant has a license issued pursuant to this chapter for an office or other place of business located in this State and if the applicant submits with the application for a license a statement signed by the applicant which states that the applicant agrees to:

(a) Make available at a location within this State the books, accounts, papers, records and files of the office or place of business located outside this State to the Commissioner or a representative of the Commissioner; or

(b) Pay the reasonable expenses for travel, meals and lodging of the Commissioner or a representative of the Commissioner incurred during any investigation or examination made at the office or place of business located outside this State.

Ê The applicant must be allowed to choose between paragraph (a) or (b) in complying with the provisions of this subsection.

(Added to NRS by 1999, 3748; A 2001, 2045; 2003, 2726, 3560)

1. In addition to any other requirements set forth in this chapter:

(a) A natural person who applies for the issuance of a license as a mortgage banker shall include the social security number of the applicant in the application submitted to the Commissioner.

(b) A natural person who applies for the issuance or renewal of a license as a mortgage banker shall submit to the Commissioner the statement prescribed by the Division of Welfare and Supportive Services of the Department of Health and Human Services pursuant to NRS 425.520. The statement must be completed and signed by the applicant.

2. The Commissioner shall include the statement required pursuant to subsection 1 in:

(a) The application or any other forms that must be submitted for the issuance or renewal of the license; or

(b) A separate form prescribed by the Commissioner.

3. The Commissioner shall not issue or renew a license as a mortgage banker if the applicant is a natural person who:

(a) Fails to submit the statement required pursuant to subsection 1; or

(b) Indicates on the statement submitted pursuant to subsection 1 that he is subject to a court order for the support of a child and is not in compliance with the order or a plan approved by the district attorney or other public agency enforcing the order for the repayment of the amount owed pursuant to the order.

4. If an applicant indicates on the statement submitted pursuant to subsection 1 that he is subject to a court order for the support of a child and is not in compliance with the order or a plan approved by the district attorney or other public agency enforcing the order for the repayment of the amount owed pursuant to the order, the Commissioner shall advise the applicant to contact the district attorney or other public agency enforcing the order to determine the actions that the applicant may take to satisfy the arrearage.

(Added to NRS by 1999, 3750; A 2003, 3562; 2005, 2791, 2810, 2817)

1. In addition to any other requirements set forth in this chapter, a natural person who applies for the issuance or renewal of a license as a mortgage banker shall submit to the Commissioner the statement prescribed by the Division of Welfare and Supportive Services of the Department of Health and Human Services pursuant to NRS 425.520. The statement must be completed and signed by the applicant.

2. The Commissioner shall include the statement required pursuant to subsection 1 in:

(a) The application or any other forms that must be submitted for the issuance or renewal of the license; or

(b) A separate form prescribed by the Commissioner.

3. The Commissioner shall not issue or renew a license as a mortgage banker if the applicant is a natural person who:

(a) Fails to submit the statement required pursuant to subsection 1; or

(Added to NRS by 1999, 3750; A 2003, 3562; 2005, 2791, 2810, 2817, effective on the date of the repeal of the federal law requiring each state to establish procedures for withholding, suspending and restricting the professional, occupational and recreational licenses for child support arrearages and for noncompliance with certain processes relating to paternity or child support proceedings)

NRS 645E.220 Posting of license; restrictions on transfer or assignment of license.

1. A mortgage banker shall post each license in a conspicuous place in the office for which the license has been issued.

2. A mortgage banker may not transfer or assign a license to another person, unless the Commissioner gives his written approval.

(Added to NRS by 1999, 3751; A 2003, 3562)

NRS 645E.230 Activities authorized by license; dual licensure as mortgage banker and mortgage broker.

1. A license entitles a licensee to engage only in the activities authorized by this chapter.

2. The provisions of this chapter do not prohibit a licensee from:

(a) Holding a license as a mortgage broker pursuant to chapter 645B of NRS; or

(b) Conducting the business of a mortgage banker and the business of a mortgage broker in the same office or place of business.

(Added to NRS by 1999, 3750; A 2003, 3562)

EXPIRATION AND RENEWAL OF LICENSE OR CERTIFICATE OF EXEMPTION; FEES

NRS 645E.280 Annual expiration of license or certificate of exemption; procedure for renewal; fees.

1. A license issued to a mortgage banker pursuant to this chapter expires each year on December 31, unless it is renewed. To renew a license, the licensee must submit to the Commissioner on or before December 31 of each year:

(a) An application for renewal that complies with the requirements of this chapter; and

(b) The fee required to renew the license pursuant to this section.

2. If the licensee fails to submit any item required pursuant to subsection 1 to the Commissioner on or before December 31 of any year, the license is cancelled. The Commissioner may reinstate a cancelled license if the licensee submits to the Commissioner:

(a) An application for renewal that complies with the requirements of this chapter;

(b) The fee required to renew the license pursuant to this section; and

3. Except as otherwise provided in NRS 645E.160, a certificate of exemption issued pursuant to this chapter expires each year on December 31, unless it is renewed. To renew a certificate of exemption, a person must submit to the Commissioner on or before December 31 of each year:

(a) An application for renewal that complies with the requirements of this chapter; and

(b) The fee required to renew the certificate of exemption.

4. If the person fails to submit any item required pursuant to subsection 3 to the Commissioner on or before December 31 of any year, the certificate of exemption is cancelled. Except as otherwise provided in NRS 645E.160, the Commissioner may reinstate a cancelled certificate of exemption if the person submits to the Commissioner:

(a) An application for renewal that complies with the requirements of this chapter;

(b) The fee required to renew the certificate of exemption; and

5. A person must pay the following fees to apply for, to be issued or to renew a license as a mortgage banker pursuant to this chapter:

(a) To file an original application for a license, not more than $1,500 for the principal office and not more than $40 for each branch office. The person must also pay such additional expenses incurred in the process of investigation as the Commissioner deems necessary.

(b) To be issued a license, not more than $1,000 for the principal office and not more than $60 for each branch office.

6. A person must pay the following fees to apply for or to renew a certificate of exemption pursuant to this chapter:

(a) To file an application for a certificate of exemption, not more than $200.

(b) To renew a certificate of exemption, not more than $100.

7. To be issued a duplicate copy of any license or certificate of exemption, a person must make a satisfactory showing of its loss and pay a fee of not more than $10.

8. Except as otherwise provided in this chapter, all fees received pursuant to this chapter must be deposited in the Fund for Mortgage Lending created by NRS 645F.270.

9. The Commissioner may, by regulation, adjust any fee set forth in this section if the Commissioner determines that such an adjustment is necessary for the Commissioner to carry out his duties pursuant to this chapter. The amount of any adjustment in a fee pursuant to this subsection must not exceed the amount determined to be necessary for the Commissioner to carry out his duties pursuant to this chapter.

(Added to NRS by 1999, 3749; A 2003, 3230, 3562; 2003, 20th Special Session, 265; 2007, 961)

SUPERVISION BY COMMISSIONER

General Provisions

NRS 645E.300 Duties of Commissioner: Regulations; investigations; annual examinations; periodic and special audits; hearings; related fees; biennial examinations.

1. Subject to the administrative control of the Director of the Department of Business and Industry, the Commissioner shall exercise general supervision and control over mortgage bankers doing business in this State.

2. In addition to the other duties imposed upon him by law, the Commissioner shall:

(a) Adopt regulations establishing reasonable limitations and guidelines on loans made by a mortgage banker to a director, officer or employee of the mortgage banker.

(b) Adopt any other regulations that are necessary to carry out the provisions of this chapter, except as to loan fees.

(c) Conduct such investigations as may be necessary to determine whether any person has violated any provision of this chapter, a regulation adopted pursuant to this chapter or an order of the Commissioner.

(d) Except as otherwise provided in subsection 4, conduct an annual examination of each mortgage banker doing business in this State.

(e) Conduct such other examinations, periodic or special audits, investigations and hearings as may be necessary for the efficient administration of the laws of this State regarding mortgage bankers.

(f) Classify as confidential certain records and information obtained by the Division when those matters are obtained from a governmental agency upon the express condition that they remain confidential. This paragraph does not limit examination by:

(1) The Legislative Auditor; or

(2) The Department of Taxation if necessary to carry out the provisions of chapter 363A of NRS.

(g) Conduct such examinations and investigations as are necessary to ensure that mortgage bankers meet the requirements of this chapter for obtaining a license, both at the time of the application for a license and thereafter on a continuing basis.

3. For each special audit, investigation or examination, a mortgage banker shall pay a fee based on the rate established pursuant to NRS 645F.280.

4. The Commissioner may conduct biennial examinations of a mortgage banker instead of annual examinations, as described in paragraph (d) of subsection 2, if the mortgage banker:

(a) Received a rating in the last annual examination that meets a threshold determined by the Commissioner;

(b) Has not had any adverse change in financial condition since the last annual examination, as shown by financial statements of the mortgage banker; and

(Added to NRS by 1999, 3751; A 2003, 3564; 2003, 20th Special Session, 223; 2007, 962)

NRS 645E.310 Subpoenas; oaths; examination of witnesses; penalty; assessment of costs.

1. In the conduct of any examination, periodic or special audit, investigation or hearing, the Commissioner may:

(a) Compel the attendance of any person by subpoena.

(b) Administer oaths.

(c) Examine any person under oath concerning the business and conduct of affairs of any person subject to the provisions of this chapter and, in connection therewith, require the production of any books, records or papers relevant to the inquiry.

2. Any person subpoenaed under the provisions of this section who willfully refuses or willfully neglects to appear at the time and place named in the subpoena or to produce books, records or papers required by the Commissioner, or who refuses to be sworn or answer as a witness, is guilty of a misdemeanor.

3. In addition to the authority to recover attorney’s fees and costs pursuant to any other statute, the Commissioner may assess against and collect from a person all costs, including, without limitation, reasonable attorney’s fees, that are attributable to any examination, periodic or special audit, investigation or hearing that is conducted to examine or investigate the conduct, activities or business of the person pursuant to this chapter.

(Added to NRS by 1999, 3752; A 2003, 3473)

NRS 645E.315 Written notice of address change; approval by Commissioner; administrative fine.

1. A licensee who wishes to change the address of an office or other place of business for which he has a license pursuant to this chapter must, at least 10 days before changing the address, give written notice of the proposed change to the Commissioner.

2. Upon receipt of the proposed change of address pursuant to subsection 1, the commissioner shall provide written approval of the change and the date of the approval.

3. If a licensee fails to provide notice as required pursuant to subsection 1, the Commissioner may impose an administrative fine in an amount not to exceed $500.

(Added to NRS by 2001, 2044)

NRS 645E.320 Payment of statutory assessment by mortgage banker; duty of mortgage banker to cooperate fully with audits and examinations. Each mortgage banker shall pay the assessment levied pursuant to NRS 645F.180 and cooperate fully with the audits and examinations performed pursuant thereto.

(Added to NRS by 1999, 3752; A 2003, 3564)

Records and Financial Statements

1. Each mortgage banker shall keep and maintain at all times at each location where the mortgage banker conducts business in this State complete and suitable records of all mortgage transactions made by the mortgage banker at that location. Each mortgage banker shall also keep and maintain at all times at each such location all original books, papers and data, or copies thereof, clearly reflecting the financial condition of the business of the mortgage banker.

2. Each mortgage banker shall submit to the Commissioner each month a report of the mortgage banker’s activity for the previous month. The report must:

(a) Specify the volume of loans made by the mortgage banker for the month or state that no loans were made in that month;

(b) Include any information required pursuant to the regulations adopted by the Commissioner; and

3. The Commissioner may adopt regulations prescribing accounting procedures for mortgage bankers handling trust accounts and the requirements for keeping records relating to such accounts.

4. A licensee who operates outside this State an office or other place of business which is licensed pursuant to this chapter shall:

Ê The licensee must be allowed to choose between paragraph (a) or (b) in complying with the provisions of this subsection.

(Added to NRS by 1999, 3752; A 2001, 2046; 2003, 3564)

NRS 645E.360 Annual financial statement; audit of trust accounts; regulations.

1. Except as otherwise provided in this section, not later than 120 days after the last day of each fiscal year for a mortgage banker, the mortgage banker shall submit to the Commissioner a financial statement that:

(a) Is dated not earlier than the last day of the fiscal year; and

(b) Has been prepared from the books and records of the mortgage banker by an independent public accountant who holds a permit to engage in the practice of public accounting in this State that has not been revoked or suspended.

2. The Commissioner may grant a reasonable extension for the submission of a financial statement pursuant to this section if a mortgage banker requests such an extension before the date on which the financial statement is due.

3. If a mortgage banker maintains any accounts described in NRS 645E.430, the financial statement submitted pursuant to this section must be audited. The public accountant who prepares the report of an audit shall submit a copy of the report to the Commissioner at the same time that he submits the report to the mortgage banker.

4. The Commissioner shall adopt regulations prescribing the scope of an audit conducted pursuant to subsection 3.

(Added to NRS by 1999, 3753; A 2003, 3565; 2007, 963)

NRS 645E.370 Records of Commissioner: General provisions governing public inspection and confidentiality.

1. Except as otherwise provided in this section or by specific statute, all papers, documents, reports and other written instruments filed with the Commissioner pursuant to this chapter are open to public inspection.

2. The Commissioner may withhold from public inspection or refuse to disclose to a person, for such time as the Commissioner considers necessary, any information that, in his judgment, would:

(a) Impede or otherwise interfere with an investigation that is currently pending against a mortgage banker; or

(b) Have an undesirable effect on the welfare of the public or the welfare of any mortgage banker.

(Added to NRS by 1999, 3753; A 2003, 3565)

NRS 645E.375 Records of Commissioner: Certain records relating to investigation deemed confidential; certain records relating to disciplinary action deemed public records.

1. Except as otherwise provided in this section and NRS 239.0115, a complaint filed with the Commissioner, all documents and other information filed with the complaint and all documents and other information compiled as a result of an investigation conducted to determine whether to initiate disciplinary action are confidential.

2. The complaint or other document filed by the Commissioner to initiate disciplinary action and all documents and information considered by the Commissioner when determining whether to impose discipline are public records.

(Added to NRS by 2003, 3472; A 2007, 2148)

Transfer of Stock

NRS 645E.390 Notification of certain transfers required; application to Commissioner for approval of change of control; investigation; waiver.

1. The Commissioner must be notified of a transfer of 5 percent or more of the outstanding voting stock of a mortgage banker and must approve a transfer of voting stock of a mortgage banker which constitutes a change of control.

2. The person who acquires stock resulting in a change of control of the mortgage banker shall apply to the Commissioner for approval of the transfer. The application must contain information which shows that the requirements of this chapter for obtaining a license will be satisfied after the change of control. Except as otherwise provided in subsection 3, the Commissioner shall conduct an investigation to determine whether those requirements will be satisfied. If, after the investigation, the Commissioner denies the application, he may forbid the applicant from participating in the business of the mortgage banker.

3. A mortgage banker may submit a written request to the Commissioner to waive an investigation pursuant to subsection 2. The Commissioner may grant a waiver if the applicant has undergone a similar investigation by a state or federal agency in connection with the licensing of or his employment with a financial institution.

4. As used in this section, “change of control” means:

(a) A transfer of voting stock which results in giving a person, directly or indirectly, the power to direct the management and policy of a mortgage banker; or

(b) A transfer of at least 25 percent of the outstanding voting stock of a mortgage banker.

(Added to NRS by 1999, 3751; A 2003, 3565)

ESCROW AND TRUST ACCOUNTS

NRS 645E.420 Escrow account required for fee, salary, deposit or money paid in advance; release from escrow; exceptions; refunds; penalty.

1. Except as otherwise provided in subsection 3, the amount of any advance fee, salary, deposit or money paid to any mortgage banker or other person to obtain a loan secured by a lien on real property must be placed in escrow pending completion of the loan or a commitment for the loan.

2. The amount held in escrow pursuant to subsection 1 must be released:

(a) Upon completion of the loan or commitment for the loan, to the mortgage banker or other person to whom the advance fee, salary, deposit or money was paid.

(b) If the loan or commitment for the loan fails, to the person who made the payment.

3. Advance payments to cover reasonably estimated costs paid to third persons are excluded from the provisions of subsections 1 and 2 if the person making them first signs a written agreement which specifies the estimated costs by item and the estimated aggregate cost, and which recites that money advanced for costs will not be refunded. If an itemized service is not performed and the estimated cost thereof is not refunded, the recipient of the advance payment is subject to the penalties provided in NRS 645E.960.

(Added to NRS by 1999, 3753; A 2003, 3566)

1. All money paid to a mortgage banker for payment of taxes or insurance premiums on real property which secures any loan made by the mortgage banker must be deposited in an insured depository financial institution and kept separate, distinct and apart from money belonging to the mortgage banker. Such money, when deposited, is to be designated as an “impound trust account” or under some other appropriate name indicating that the accounts are not the money of the mortgage banker.

2. The mortgage banker has a fiduciary duty to each debtor with respect to the money in an impound trust account.

3. The mortgage banker shall, upon reasonable notice, account to any debtor whose real property secures a loan made by the mortgage banker for any money which that person has paid to the mortgage banker for the payment of taxes or insurance premiums on the real property.

4. The mortgage banker shall, upon reasonable notice, account to the Commissioner for all money in an impound trust account.

5. A mortgage banker shall:

(a) Require contributions to an impound trust account in an amount reasonably necessary to pay the obligations as they become due.

(b) Within 30 days after the completion of the annual review of an impound trust account, notify the debtor:

(1) Of the amount by which the contributions exceed the amount reasonably necessary to pay the annual obligations due from the account; and

(2) That the debtor may specify the disposition of the excess money within 20 days after receipt of the notice. If the debtor fails to specify such a disposition within that time, the mortgage banker shall maintain the excess money in the account.

Ê This subsection does not prohibit a mortgage banker from requiring additional amounts to be paid into an impound trust account to recover a deficiency that exists in the account.

6. A mortgage banker shall not make payments from an impound trust account in a manner that causes a policy of insurance to be cancelled or causes property taxes or similar payments to become delinquent.

(Added to NRS by 1999, 3754; A 2003, 3566)

NRS 645E.440 Limitations on execution or attachment of money in trust account; commingling of money prohibited.

1. Money in an impound trust account is not subject to execution or attachment on any claim against the mortgage banker.

2. It is unlawful for a mortgage banker knowingly to keep or cause to be kept any money in a depository financial institution under the heading of “impound trust account” or any other name designating such money as belonging to the debtors of the mortgage banker, unless the money has been paid to the mortgage banker by a debtor pursuant to NRS 645E.430 and is being held in trust by the mortgage banker pursuant to the provisions of that section.

(Added to NRS by 1999, 3754; A 2003, 3567)

LOAN PAYMENTS

NRS 645E.470 Limitations on charging late fee, additional amount of interest or other penalty.

1. If a person is required to make a payment to a mortgage banker pursuant to the terms of a loan secured by a lien on real property, the mortgage banker may not charge the person a late fee, an additional amount of interest or any other penalty in connection with that payment if the payment is delivered to the mortgage banker before 5 p.m. on:

(a) The day that the payment is due pursuant to the terms of the loan, if an office of the mortgage banker is open to customers until 5 p.m. on that day; or

(b) The next day that an office of the mortgage banker is open to customers until 5 p.m., if the provisions of paragraph (a) do not otherwise apply.

2. A person and a mortgage banker may not agree to alter or waive the provisions of this section by contract or other agreement, and any such contract or agreement is void and must not be given effect to the extent that it violates the provisions of this section.

(Added to NRS by 1999, 3755; A 2003, 3567)

INVESTIGATION OF VIOLATIONS AND UNSAFE PRACTICES; REMEDIAL ACTION

NRS 645E.620 Authority of Commissioner when violation is suspected; referral of violations to district attorney for criminal prosecution; civil action for injunctive relief.

1. Whether or not a complaint has been filed, the Commissioner may investigate a mortgage banker or other person if, for any reason, it appears that:

(a) The mortgage banker is conducting business in an unsafe and injurious manner or in violation of any provision of this chapter, a regulation adopted pursuant to this chapter or an order of the Commissioner;

(b) The person is offering or providing any of the services of a mortgage banker or otherwise engaging in, carrying on or holding himself out as engaging in or carrying on the business of a mortgage banker without being licensed or exempt from licensing pursuant to the provisions of this chapter; or

(c) The person is violating any other provision of this chapter, a regulation adopted pursuant to this chapter or an order of the Commissioner.

2. If, upon investigation, the Commissioner has reasonable cause to believe that the mortgage banker or other person has engaged in any conduct or committed any violation described in subsection 1, the Commissioner may:

(a) Advise the district attorney of the county in which the conduct or violation occurred, and the district attorney shall cause the appropriate legal action to be taken against the mortgage banker or other person to enjoin the conduct or the operation of the business or prosecute the violation; and

(b) Bring a civil action to:

(1) Enjoin the mortgage banker or other person from engaging in the conduct, operating the business or committing the violation; and

(2) Enjoin any other person who has encouraged, facilitated, aided or participated in the conduct, the operation of the business or the commission of the violation, or who is likely to engage in such acts, from engaging in or continuing to engage in such acts.

3. If the Commissioner brings a civil action pursuant to subsection 2, the district court of any county of this Sate is hereby vested with the jurisdiction in equity to enjoin the conduct, the operation of the business or the commission of the violation and may grant any injunctions that are necessary to prevent and restrain the conduct, the operation of the business or the commission of the violation. During the pendency of the proceedings before the district court:

(a) The court may issue any temporary restraining orders as may appear to be just and proper;

(b) The findings of the Commissioner shall be deemed to be prima facie evidence and sufficient grounds, in the discretion of the court, for the ex parte issuance of a temporary restraining order; and

(c) The Commissioner may apply for and on due showing is entitled to have issued the court’s subpoena requiring forthwith the appearance of any person to:

(1) Produce any documents, books and records as may appear necessary for the hearing of the petition; and

(2) Testify and give evidence concerning the conduct complained of in the petition.

(Added to NRS by 1999, 3755; A 2003, 3568)

NRS 645E.630 Authority of Commissioner when unsafe condition or practice is suspected; seizure of property and assets of mortgage banker; duties of Attorney General.

1. In addition to any other action that is permitted pursuant to this chapter, if the Commissioner has reasonable cause to believe that:

(a) The assets or capital of a mortgage banker are impaired; or

(b) A mortgage banker is conducting business in an unsafe and injurious manner that may result in danger to the public,

Ê the Commissioner may immediately take possession of all the property, business and assets of the mortgage banker that are located in this state and retain possession of them pending further proceedings provided for in this chapter.

2. If the licensee, the board of directors or any officer or person in charge of the offices of the mortgage banker refuses to permit the Commissioner to take possession of the property of the mortgage banker pursuant to subsection 1:

(a) The Commissioner shall notify the Attorney General; and

(b) The Attorney General shall immediately bring such proceedings as may be necessary to place the Commissioner in immediate possession of the property of the mortgage banker.

3. If the Commissioner takes possession of the property of the mortgage banker, the Commissioner shall:

(a) Make or have made an inventory of the assets and known liabilities of the mortgage banker; and

(b) File one copy of the inventory in his office and one copy in the office of the clerk of the district court of the county in which the principal office of the mortgage banker is located and shall mail one copy to each stockholder, partner, officer, director or associate of the mortgage banker at his last known address.

4. The clerk of the court with which the copy of the inventory is filed shall file it as any other case or proceeding pending in the court and shall give it a docket number.

(Added to NRS by 1999, 3756; A 2003, 3569)

NRS 645E.640 Persons entitled to correct unsafe conditions and practices; effect of failure to correct; receivership and liquidation of assets.

1. If the Commissioner takes possession of the property of a mortgage banker pursuant to NRS 645E.630, the licensee, officers, directors, partners, associates or stockholders of the mortgage banker may, within 60 days after the date on which the Commissioner takes possession of the property, make good any deficit in the assets or capital of the mortgage banker or remedy any unsafe and injurious conditions or practices of the mortgage banker.

2. At the expiration of the 60-day period, if the deficiency in assets or capital has not been made good or the unsafe and injurious conditions or practices remedied, the Commissioner may apply to the court to be appointed receiver and proceed to liquidate the assets of the mortgage banker which are located in this State in the same manner as now provided by law for liquidation of a private corporation in receivership.

3. No other person may be appointed receiver by any court without first giving the Commissioner ample notice of his application.

4. The inventory made by the Commissioner and all claims filed by creditors are open at all reasonable times for inspection, and any action taken by the receiver upon any of the claims is subject to the approval of the court before which the cause is pending.

5. The expenses of the receiver and compensation of counsel, as well as all expenditures required in the liquidation proceedings, must be fixed by the Commissioner subject to the approval of the court and, upon certification of the Commissioner, must be paid out of the money in his hands as the receiver.

(Added to NRS by 1999, 3757; A 2003, 3569)

DISCIPLINARY ACTION

NRS 645E.670 Authorized disciplinary action; grounds for disciplinary action; orders imposing discipline deemed public records.

1. For each violation committed by an applicant, whether or not he is issued a license, the Commissioner may impose upon the applicant an administrative fine of not more than $10,000, if the applicant:

(a) Has knowingly made or caused to be made to the Commissioner any false representation of material fact;

(b) Has suppressed or withheld from the Commissioner any information which the applicant possesses and which, if submitted by him, would have rendered the applicant ineligible to be licensed pursuant to the provisions of this chapter; or

(c) Has violated any provision of this chapter, a regulation adopted pursuant to this chapter or an order of the Commissioner in completing and filing his application for a license or during the course of the investigation of his application for a license.

2. For each violation committed by a licensee, the Commissioner may impose upon the licensee an administrative fine of not more than $10,000, may suspend, revoke or place conditions upon his license, or may do both, if the licensee, whether or not acting as such:

(a) Is insolvent;

(b) Is grossly negligent or incompetent in performing any act for which he is required to be licensed pursuant to the provisions of this chapter;

(c) Does not conduct his business in accordance with law or has violated any provision of this chapter, a regulation adopted pursuant to this chapter or an order of the Commissioner;

(d) Is in such financial condition that he cannot continue in business with safety to his customers;

(e) Has made a material misrepresentation in connection with any transaction governed by this chapter;

(f) Has suppressed or withheld from a client any material facts, data or other information relating to any transaction governed by the provisions of this chapter which the licensee knew or, by the exercise of reasonable diligence, should have known;

(g) Has knowingly made or caused to be made to the Commissioner any false representation of material fact or has suppressed or withheld from the Commissioner any information which the licensee possesses and which, if submitted by him, would have rendered the licensee ineligible to be licensed pursuant to the provisions of this chapter;

(h) Has failed to account to persons interested for all money received for a trust account;

(i) Has refused to permit an examination by the Commissioner of his books and affairs or has refused or failed, within a reasonable time, to furnish any information or make any report that may be required by the Commissioner pursuant to the provisions of this chapter or a regulation adopted pursuant to this chapter;

(j) Has been convicted of, or entered a plea of nolo contendere to, a felony relating to the practice of mortgage bankers or any crime involving fraud, misrepresentation or moral turpitude;

(k) Has refused or failed to pay, within a reasonable time, any fees, assessments, costs or expenses that the licensee is required to pay pursuant to this chapter or a regulation adopted pursuant to this chapter;

(l) Has failed to pay a tax as required pursuant to the provisions of chapter 363A of NRS;

(m) Has failed to satisfy a claim made by a client which has been reduced to judgment;

(n) Has failed to account for or to remit any money of a client within a reasonable time after a request for an accounting or remittal;

(o) Has commingled the money or other property of a client with his own or has converted the money or property of others to his own use; or

(p) Has engaged in any other conduct constituting a deceitful, fraudulent or dishonest business practice.

3. An order that imposes discipline and the findings of fact and conclusions of law supporting that order are public records.

(Added to NRS by 1999, 3757; A 2003, 2728, 3473; 2003, 20th Special Session, 223)

1. If the Commissioner receives a copy of a court order issued pursuant to NRS 425.540 that provides for the suspension of all professional, occupational and recreational licenses, certificates and permits issued to a person who is the holder of a license as a mortgage banker, the Commissioner shall deem the license issued to that person to be suspended at the end of the 30th day after the date on which the court order was issued unless the Commissioner receives a letter issued to the holder of the license by the district attorney or other public agency pursuant to NRS 425.550 stating that the holder of the license has complied with the subpoena or warrant or has satisfied the arrearage pursuant to NRS 425.560.

2. The Commissioner shall reinstate a license as a mortgage banker that has been suspended by a district court pursuant to NRS 425.540 if the Commissioner receives a letter issued by the district attorney or other public agency pursuant to NRS 425.550 to the person whose license was suspended stating that the person whose license was suspended has complied with the subpoena or warrant or has satisfied the arrearage pursuant to NRS 425.560.

(Added to NRS by 1999, 3758; A 2003, 3570; 2005, 2810, 2817)

NRS 645E.710 Act or omission of partner, officer or director deemed act or omission of partnership, corporation or unincorporated association. If a person is a partnership, corporation or unincorporated association, the Commissioner may take any disciplinary action set forth in this chapter against the person if any member of the partnership or any officer or director of the corporation or unincorporated association has committed any act or omission that would be cause for taking such disciplinary action against a natural person.

(Added to NRS by 1999, 3759)

HEARINGS; APPEALS

NRS 645E.750 Duty of Commissioner to provide written notice of disciplinary action or denial of license; right to administrative hearing; entry of final order; appeals.

1. If the Commissioner enters an order taking any disciplinary action against a person or denying a person’s application for a license, the Commissioner shall cause a written notice of the order to be served personally or sent by certified mail or telegram to the person.

2. Unless a hearing has already been conducted concerning the matter, the person, upon application, is entitled to a hearing. If the person does not make such an application within 20 days after the date of the initial order, the Commissioner shall enter a final order concerning the matter.

3. A person may appeal a final order of the Commissioner in accordance with the provisions of chapter 233B of NRS that apply to a contested case.

(Added to NRS by 1999, 3759; A 2003, 985)

UNLAWFUL ACTS; PENALTIES

NRS 645E.900 Unlawful to conduct business of mortgage banker without being licensed or exempt from licensing. It is unlawful for any person to offer or provide any of the services of a mortgage banker or otherwise to engage in, carry on or hold himself out as engaging in or carrying on the business of a mortgage banker without first obtaining a license as a mortgage banker pursuant to this chapter, unless the person:

1. Is exempt from the provisions of this chapter; and

2. Complies with the requirements for that exemption.

(Added to NRS by 1999, 3759; A 2003, 3570)

NRS 645E.910 Unlawful for foreign corporation, association or business trust to conduct business of mortgage banker without meeting certain requirements. It is unlawful for any foreign corporation, association or business trust to conduct any business as a mortgage banker within this State, unless it:

1. Qualifies under chapter 80 of NRS; and

2. Complies with the provisions of this chapter or, if it claims an exemption from the provisions of this chapter, complies with the requirements for that exemption.

(Added to NRS by 1999, 3759; A 2003, 3570)

NRS 645E.950 Penalties for general violations. Except as otherwise provided in NRS 645E.960, a person, or any general partner, director, officer, agent or employee of a person, who violates any provision of this chapter, a regulation adopted pursuant to this chapter or an order of the Commissioner is guilty of a misdemeanor.

(Added to NRS by 1999, 3759)

NRS 645E.960 Penalties for violations relating to escrow or trust accounts. A person, or any general partner, director, officer, agent or employee of a person, who violates any provision of NRS 645E.420, 645E.430 or 645E.440 is guilty of:

1. A misdemeanor if the amount involved is less than $250;

2. A gross misdemeanor if the amount involved is $250 or more but less than $1,000; or

3. A category D felony if the amount involved is $1,000 or more, and shall be punished as provided in NRS 193.130.

(Added to NRS by 1999, 3759)