Nevada law requires that when a broker has a conflict of interest in a mortgage transaction that the nature of the conflict needs to be disclosed to the borrower. Specifically, NAC 645B.210.1&2 state that:
1. If an owner, partner, director, officer, manager, member or employee of a licensed mortgage broker, or a relative of an owner, partner, director, officer, manager, member or employee of a licensed mortgage broker:
(a) Has any personal involvement in a lending or borrowing transaction of the mortgage broker which is authorized under chapter 645B of NRS; or
(b) Is licensed as, conducts business as or holds a controlling interest or position in:
(1) A construction control;
(2) An escrow agency or escrow agent; or
(3) A title agent, a title insurer or an escrow officer of a title agent or title insurer,
the involvement must be disclosed to the borrower and the investor before the date that the loan is consummated. Such a disclosure must be separate from the documents of the transaction and must clearly and concisely state the nature of the involvement. The statement of disclosure must be signed by the borrower and the investor as an acknowledgment of the involvement. The mortgage broker shall not act as the attorney in fact or the agent of an investor with respect to signing the acknowledgment.”
2. If a mortgage broker is owned by a corporation in which one owner, director, manager or employee owns an interest of 10 percent or more, and that person has any personal involvement in a licensed transaction of the mortgage broker, the involvement must be disclosed to the borrower and the investor pursuant to subsection 1.
To fulfill these requirements, Docutech uses Cx3839 “NV Employee Disclosure”. Subsequent to a recent review, we have made updates to the language of Cx3839 to more closely align with the language of the Nevada Law. Additionally, Docutech will now omit the disclosure required per NAC 645B.210.2 when the corresponding field (40129) is not set to Yes, rather than having the language appear all the time with a checkbox to indicate applicability.
These changes will be in effect on January 21, 2017. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.