Code of Massachusetts Regulations
209 CMR - DIVISION OF BANKS AND LOAN AGENCIES
Title 209 CMR 42.00 - The Licensing Of Mortgage Lenders And Mortgage Brokers
Section 42.03 - Application Procedure - Mortgage Lenders
Universal Citation: 209 MA Code of Regs 209.42
Current through Register 1531, September 27, 2024
(1) Application. Each Applicant for a license as a mortgage lender shall submit an application for licensure through the NMLS, containing such information as the Commissioner may require.
(2) License Requirements. An Applicant shall be required to submit detailed information supporting the following general requirements:
(a)
Financial
Responsibility. An Applicant shall demonstrate financial
responsibility and shall maintain:
1. a net
worth of not less than $200,000;
2.
a bond in such form and with such sureties as may be approved by the
Commissioner in a sum to be based on the amount of the Applicant's aggregate
mortgage loans, as determined by the Commissioner, but in no event shall the
sum of the bond be less than $100,000, up to a maximum of $500,000; provided
that the sum of such bond may be increased by the Commissioner at any time to
such amount, up to the $500,000 maximum, as shall be shown to be necessary. The
surety bond must contain a clause that the insurance company will notify the
Commissioner at least 30 days prior to canceling the surety bond for any
reason. The Commissioner shall automatically suspend the license on the date
the cancellation takes effect, unless the surety bond has been replaced or
renewed; and
(b)
Financial Statements. An Applicant shall submit
financial statements prepared in accordance with generally accepted accounting
principles meeting the following minimum requirements:
1.
Contents. The
financial statements required by 209 CMR 42.03(2)(b) shall include, but are not
limited to, a Balance Sheet, Income Statement, Statement of Cash Flows, and
Statement of Changes in Stockholders' Equity and all relevant notes thereto. If
an Applicant's audited or reviewed financial statements are consolidated, the
Applicant shall include supplemental statements for each of the consolidated
entities.
2.
Initial
Application. An Applicant under 209 CMR 42.03(2)(b) shall submit
audited financial statements for the preceding fiscal year and such other
financial information as the Commissioner may require.
3.
Renewal
Applications. Within 90 days of the close of its fiscal year, an
Applicant for license renewal shall submit financial statements for the
preceding fiscal year that have been audited by an independent certified public
accountant and such other financial information as the Commissioner may
require.
4.
Audit
Scope. All financial statements shall be audited in accordance
with generally accepted auditing standards.
(c)
Character and
Fitness. An Applicant shall submit information demonstrating that
the Applicant possesses the character, reputation, integrity and fitness to
engage in the business of a mortgage lender in an honest, fair, sound and
efficient manner.
(d)
Business Experience. An Applicant shall demonstrate to
the Commissioner's satisfaction that the Applicant, and its applicable officers
and employees, possess the necessary educational and business experience to
engage in the business of a mortgage lender.
(e)
Other
Information. An Applicant shall submit such other information as
the Commissioner may deem necessary to properly evaluate an application. In
evaluating an application and requesting information from an Applicant, the
Commissioner may be guided by or rely upon the standards set forth in the
CSBS/American Association of Residential Mortgage Regulators NMLS
Policy Guidebook, as published by the SRR.
Disclaimer: These regulations may not be the most recent version. Massachusetts may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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