Current through Register Vol. 48, 12, December 27, 2024
A. Definitions
- Definitions shall be those contained in the Licensing of Mortgage Brokers
Act, S.C. Code Ann. Section40-58-10
et seq.; Secure and Fair Enforcement for Mortgage Licensing Act of 2008,
12
USC 5101 et seq.; S.A.F.E. Mortgage Licensing
Act, 12 CFR Part 1008 and the following:
(1)
Act - means the Licensing of Mortgage Brokers Act, S.C. Code Ann.
Section40-58-10
et seq.
(2) Co-brokering - means
any sharing, regardless of percentage, of mortgage broker services or fees by
two or more licensed mortgage brokers on behalf of a borrower.
(3) Day - means all calendar days including
Saturdays, Sundays and legal public holidays.
(4) Employee for purposes of compliance with
the federal income tax laws - means a natural person whose manner and means of
performance of work are subject to the right of control of, or are controlled
by, a person, and whose compensation for Federal income tax purposes is
reported, or required to be reported, on a W-2 form issued by the controlling
person. (See IRS Publication 1779 and Form SS-8).
(5) Loan correspondent - means a person
engaged in the business of making mortgage loans as a third party originator
and who does not engage in all three of the following activities with respect
to each mortgage loan: underwrite the mortgage loan by their employees, approve
the mortgage loan, and fund the mortgage loan utilizing an unrestricted
warehouse or credit line. A loan correspondent is not a mortgage lender for
purposes of compliance with S.C. Code Section37-22-110 et
seq.
(6) Loss mitigation - means
the practice of offering to provide or providing, in a for profit context, a
service, plan, or program that is represented expressly or by implication to
assist the borrower to prevent, delay, or otherwise avoid foreclosure,
including, but not limited to, loan modifications, short sales, and deeds in
lieu of foreclosure. This definition does not include persons acting
exclusively for or as a bona fide nonprofit organization as determined by the
Department or mortgage lenders/servicers licensed pursuant to S.C. Code
Section37-22-110 et seq.,
when acting for mortgage loans they own or service.
B. Licensing of Independent Contractor
Processors or Underwriters
(1) Independent
contractor processors or underwriters, including those currently licensed as
mortgage lenders/servicers pursuant to S.C. Code Section37-22-110 et seq.,
shall comply with the Act, except for the following provisions:
(a) Section40-58-65(A)
maintaining a mortgage log;
(b)
Section40-58-65(B)
maintaining an in-state office;
(c)
Section40-58-75
completing a mortgage broker fee agreement;
(d) Section40-58-78
additional disclosures on mortgage broker fee agreement;
(e) Sections40-58-120(A),
(B) and (C) annual report for loans
originated, however an annual report for gross revenue is required.
(2) Independent Contractor
Processors or Underwriters shall not originate mortgage loans.
C. All South Carolina mortgage
loans are subject to the provisions of all South Carolina and federal law
related to mortgage loans, including, but not limited to, the Real Estate
Settlement Procedures Act of 1974 (RESPA) 12 USC Section 2601 et seq.
D. Reports
(1) Mortgage log required pursuant to
Section40-58-65(A)
shall:
(a) be completed electronically as
required by the Department. The licensee is responsible for all costs
associated with the electronic filing, and
(b) include all mortgage loans or
applications where a credit report is requested, regardless of whether a
mortgage loan is originated or modified.
(2) Annual report required by
Section40-58-120
shall be:
(a) completed as a mortgage call
report (MCR) (See Secure and Fair Enforcement for Mortgage Licensing Act of
2008,
12
USC 5101 et seq.; Safe Mortgage Licensing
Act, 24 CFR Part 3400 and Staff Commentary), and
(b) submitted electronically on a quarterly
basis as required by the Nationwide Mortgage Licensing System and Registry
(NMLS&R) by the mortgage broker for all locations and loan
originators.
(3) The
Department at its discretion may require or accept an Expanded Mortgage Call
Report filed through the Nationwide Mortgage Licensing System & Registry
(NMLS&R) or similar filing in lieu of the annual report required by
Section40-58-120.
E. Licensing for loss mitigation
activities. Persons providing or offering to provide loss mitigation shall
comply with the Act unless the Department has determined the person is exempt
pursuant to Section40-58-20(16)
and Sections (A)(6) and (F) herein.
F. Bona fide Nonprofit Organizations (
12 CFR
1008.103(e)(7)) .
(1) The Department may consider an
organization a bona fide nonprofit organization based on but not limited to the
following minimum criteria:
(a) Has the
status of a tax-exempt organization under section501(c)(3) of the Internal
Revenue Code of 1986;
(b) Promotes
affordable housing or provides homeownership education, or similar
services;
(c) Conducts its
activities in a manner that serves public or charitable purposes, rather than
commercial purposes;
(d) Receives
funding and revenue and charges fees in a manner that does not incentivize it
or its employees to act other than in the best interests of its
clients;
(e) Compensates its
employees in a manner that does not incentivize employees to act other than in
the best interests of its clients; and
(f) Provides or identifies for the borrower
mortgage loans with terms favorable to the borrower and comparable to mortgage
loans and housing assistance provided under government housing assistance
programs.
(2) Bona fide
nonprofit organizations must file for an initial determination and annually for
renewal of this determination by the Department. Annual renewals must be filed
by December 31st using forms and procedures as required by the
Department.
(3) Bona fide nonprofit
organizations may use the Nationwide Mortgage Licensing System for initial and
renewal filings; however, they will be required to pay any associated
processing fees.
Statutory Authority: 1976 Code Section40-58-100
(as amended),
12
USC 5101 et seq., and 12 CFR Part
1008