Earlier this year, North Dakota enacted Senate Bill 2090 (“SB 2090”) which added Chapter 13-12 Residential Mortgage Lenders to the North Dakota Century Code. Beginning on August 1, 2023, residential mortgage lenders will be regulated under Chapter 13-12 and be required to hold a residential mortgage lender license instead of being regulated under the North Dakota Money Broker Act.
The definition of residential mortgage lending encompasses both mortgage lenders and brokers involved in the “act of arranging or providing residential mortgage loans as a form of financing, or advertising or soliciting either in print, by letter, in person, or otherwise, the right to find lenders or provide residential mortgage loans to a person.” Residential mortgage lenders licensed under Chapter 13-12 will be exempt from holding a North Dakota Money Broker license after August 1, 2023 unless they are engaged in lending activity outside of residential mortgages, such as commercial, agriculture, or non-residential consumer lending.
The residential mortgage lender license and branch registration will be available after the effective date on the Nationwide Multi-State Licensing System (“NMLS”). Licensees that have an active North Dakota Money Broker license will be able to transition to the new Residential Mortgage Lender License during the transition period of August 1, 2023 through December 31, 2023.
Chapter 13-12 outlines provisions related to application for licensure, licensing fees, surety bond, and license renewal, record keeping requirements, as well as prohibited acts and requirements. A list of exempted entities is also provided under NDCC § 13-12-04 and includes banks, credit unions, savings and loan associations, insurance companies, individuals licensed under Chapter 13-10, state and federal agencies, nonprofit corporations, and trust companies.
DocMagic will provide a new North Dakota Residential Mortgage Lenders Contract (Form ID: NDRML.MSC) beginning on August 1, 2023 in North Dakota initial and pre-closing packages to satisfy the notice to borrower requirement under NDCC § 13-12-27. DocMagic will also continue to provide the North Dakota Money Broker Contract (Form ID: NDMBC.MSC) in initial and preclosing packages during the transition period for clients that have not completed the transition from the Money Broker license to the Residential Mortgage Lender license.
For additional information, please see the North Dakota Financial Institutions Residential Mortgage Lender License and Branch Registration Letter.
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