Mortgage Industry:
FAQs
Mortgage Loan Companies/Mortgage Loan Originators
Frequently Asked Questions for Mortgage Loan Companies and Mortgage Loan Originators:
Q: Is New Mexico a licensing state for mortgage loan companies?
Yes. After September 1, 2009, all mortgage loan companies doing business in New Mexico must obtain a license through the Nationwide Mortgage Licensing System (NMLS).
Q: What is a mortgage loan company?
A "mortgage loan company" means any person who, for compensation or gain, or in the expectation of compensation or gain, either directly or indirectly:
- Accepts an application for a mortgage loan; negotiates terms for a mortgage loan; or solicits, processes, originates, brokers or makes mortgage loans for others;
- Offers to:
- Accept an application for a mortgage loan;
- Negotiate terms for a mortgage loan; or
- Solicit, process, originate, broker or make mortgage loans for others; or
- Closes mortgage loans that may be in the mortgage loan company's own name with funds provided by others and that are assigned to the mortgage lenders providing the funding of such loans;
Q: Who can be a Qualified Manager for a Mortgage Loan Company?
Anyone who is a control person or an employee of a Mortgage Loan Company as long as they meet the requirements of a qualified manager which are:
- They must be a licensed Mortgage Loan Originator; and
- They must have two years of verifiable experience within the past four years in the mortgage lending industry.
Q: How much does a mortgage loan company license cost?
A mortgage loan company shall pay the following fees to maintain a valid mortgage loan company license. These fees are non-refundable. These fees are in addition to any fees established and charged by the Nationwide Mortgage Licensing System and Registry.
| Main Office: |
| Application Fee: |
$500.00 |
| License Fee: |
$500.00 |
| Supervisory Fee: |
$500.00 |
| Annual License Renewal Fee: |
$500.00 |
| Annual Supervisory Renewal Fee: |
$500.00 |
| Reinstatement Fee: |
$250.00 |
| Amendment Fees: |
$50.00 |
| NMLS Fee: |
$100.00 |
Q: Do mortgage loan company branches need to be licensed?
Yes. If they are conducting business in New Mexico on residential property.
Q: How much does a mortgage loan company branch license cost?
| Branch Office: |
| License Fee: |
$500.00 |
| Annual License renewal fee: |
$500.00 |
| Reinstatement fee: |
$250.00 |
| Branch amendment fees: |
$50.00: |
| NMLS Fee: |
$20.00 |
Q: Are Mortgage Loan Companies required to maintain a physical location in New Mexico?
No.
Q: Does the mortgage loan company license cover first and subordinate lien mortgage transactions?
Yes. It covers all residential mortgage loan products and transactions including chattel.
Q: Does New Mexico provide any mortgage exemptions for mortgage loan companies?
Yes.
Persons Exempt from Licensure
The following persons shall be exempt from all provisions of the Mortgage Loan Company and Loan Broker Act [Chapter 58, Article 21 NMSA 1978]:
- Bank, trust companies, savings and loan associations, credit unions, insurance companies or real estate investment trusts as defined in 26 USCA 856;
- An attorney licensed to practice law in New Mexico who is not principally engaged in the business of negotiating loans secured by real or personal property, when the person renders services in the course of his practice as an attorney;
- A New Mexico-licensed real estate broker rendering service in the performance of his duties as a real estate broker who obtains financing for a real estate transaction involving an actual bona fide sale of real estate or real estate contract handled by the broker and who receives only the customary real estate broker's commission in connection with the transaction;
- A person doing an act under order of a court;
- An individual making a single mortgage loan in a calendar year with the individual's own funds for the individual's own investment without the intent to resell the mortgage loan
- The United States of America, state of New Mexico or any of their branches, agencies, departments, boards, instrumentalities or institutions and all political subdivisions of the state and their agencies, instrumentalities and institutions; and
- A company licensed as a small business investment company under the federal Small Business Investment Act of 1958.
Q: Who needs to be licensed as a Mortgage Loan Originator?
Any individual who for compensation or gain or in the expectation of compensation or gain takes a residential mortgage loan application or offers or negotiates terms of a residential mortgage loan.
Q: Do processors or underwriters need a license?
No, if they, perform clerical or support duties as an employee at the direction of and subject to the supervision and instruction of a person licensed, or exempt from licensing, pursuant to the Mortgage Loan Company Act. Yes, if they are an independent contractor.
Q: Are there any requirements for licensure for mortgage loan originators?
Yes. A Mortgage Loan Originator must go to the Nationwide Mortgage Licensing System website and apply for a license and obtain a unique identifier number, take 20 hours of mortgage education which will include 3 hours of New Mexico specific classes, pass a national and state specific test, provide a credit report obtained by the Nationwide Mortgage Licensing System, pass a background check with fingerprints and have a surety bond or be sponsored by a mortgage loan company that is licensed and bonded in the State of New Mexico.
Q: How much does a mortgage loan originator license cost?
A mortgage loan originator shall pay the following fees to maintain a valid mortgage loan originator license. These fees are non-refundable. These fees are in addition to any fees established and charged by the Nationwide Mortgage Licensing System and Registry, any approved educational course provider, any approved educational testing provider, any law enforcement agency for finger prints and background checks or by any credit reporting agency used by the Nationwide Mortgage Licensing System and Registry:
| Application Fee: |
$200.00 |
| License Fee: |
$200.00 |
| Annual renewal license fee: |
$200.00 |
| Reinstatement fee: |
$100.00 |
Q: Are there any continuing education requirements for licensed mortgage loan originators?
Yes. A mortgage loan originator is required to obtain 8 hours of continuing education which includes 1 hour of New Mexico specific education. The continuing education is not required in the same calendar year that the Mortgage Loan Originator first obtains their license.
Q: Does New Mexico provide any mortgage exemptions for Mortgage Loan Originators?
Yes.
The following are exempt from the provisions of the New Mexico Mortgage Loan Originator Licensing Act:
- Registered mortgage loan originators when acting for an entity defined in Subparagraphs (a) through (c) of Paragraph (1) of Subsection P of Section 3 of the New Mexico Mortgage Loan Originator Licensing Act;
- An individual who offers or negotiates terms of a residential mortgage loan with or on behalf of an immediate family member of the individual;
- An individual who offers or negotiates terms of a real property sale financed in whole or in part by the seller and secured by the seller's real property; or
- A licensed attorney who negotiates the terms of a residential mortgage loan on behalf of a client as an ancillary matter to the attorney's representation of the client, unless the attorney is compensated by a lender, a mortgage loan company or other mortgage loan originator or by any agent of such lender, mortgage loan company or other mortgage loan originator.
Q: Do I need to get a corporate surety bond?
Yes. Each mortgage loan company or mortgage loan originator, if not sponsored by a mortgage loan company, must maintain a corporate surety bond. The bond must be in an initial amount of fifty thousand dollars ($50,000.00) for the first year. After the first year, the surety bond will be determined by the following scale for loans closed in New Mexico.
- $0 to three million dollars ($3,000,000): fifty thousand dollar ($50,000) bond.
- Over three million dollars ($3,000,000) to less than ten million dollars ($10,000,000): one hundred thousand dollar ($100,000) bond.
- Over ten million dollars ($10,000,000): one hundred fifty thousand dollar ($150,000) bond.
These surety bond limits will be required of all mortgage loan companies or originators after July 31, 2009. A surety bond can be obtained at an insurance agency of your choice.
Q: When does my license expire?
December 31 of each calendar year.
Q: When is my Mortgage Loan Company or Mortgage Loan Originator license renewal application form and fee due?
All new licenses and license renewals shall expire on December 31 of each year. All license renewal applications will begin being processed on November 1 of each calendar year. .
Q: What if there is a change of name or address?
Licensed Mortgage Loan Companies or Originators must submit any changes to their status through the Nationwide Mortgage Licensing System and pay a fee of $50.
Q: How long must I keep my mortgage files and records?
Six years per statute. These files and records can be kept in physical form or can be stored on any accessible electronic medium.
Q: Does the Financial Institutions Division conduct examinations of mortgage loan companies or originators?
Yes. As a licensed Mortgage Loan Company or Mortgage Loan Originator with the State of New Mexico, you or any of your branches are subject to an examination of your mortgage files, books and records.
Q: Is there a fee for the examination?
No. Unless the examination results in an investigation of the Mortgage Loan Company or Mortgage Loan Originator.
Q: How many loans can be made in New Mexico without a license?
None.
Q: What types of mortgage loan products am I allowed to broker or fund?
Any residential mortgage loan secured by a dwelling. A “dwelling" means a residential structure that contains one to four units whether or not that structure is attached to real property. "Dwelling" includes an individual condominium unit, an individual cooperative unit, a mobile home and a trailer if used as a residence;
Q: Are my internet business activities as a Mortgage Loan Company or Mortgage Loan Originator licensing requirements?
Yes, if you are conducting business involving New Mexico property.
Q: What is a table funding?
Table funding is a simultaneous closing where there is a transfer or sale of a property and the note created between the buyer and seller is purchased by an investor at the same closing table where the real estate transaction is taking place.
Q: Do I need a Certificate of Authority to do business in New Mexico, and do I need to be registered as a foreign corporation to do business in New Mexico?
There are legal determinations to be made by Lenders/Brokers. Forms, applications and information can be obtained by contacting the Public Regulation Commission at 505-827-4500 or www.nmprc.state.nm.us/cii.htm.
Q: Are there any state specific disclosures that are required by New Mexico?
Yes. There is a mortgage loan summary and a mortgage loan compensation disclosure which are required to be disclosed to the borrower(s) at least two days prior to closing and a Rate Lock disclosure. The requirements for these disclosures are set in Rule 12.19.8.12 NMAC.
Q: Who is required to be licensed?
If the activities performed by an individual or a business involves the activities contemplated in the definition of a “mortgage loan originator” pursuant to The New Mexico Mortgage Loan Originator Licensing Act, Section 3 (K), and/or the definition of a “mortgage loan company” pursuant to the Mortgage Loan Company Act, Subsection 58-21-2 (I), licensure is triggered. The division must comply with the letter of the law in considering whether the activities of any person or individual requires licensure, and must do so apart from of any other activities or services performed. The statutes do not provide a grace period for licensure for this activity.