07.25.23   •   Document Updates

Document Updates: North Dakota Money Broker Contract (Cx1904) Updated to North Dakota Money Broker/Residential Mortgage Lender Contract (Cx1904)

On March 14, 2023, Governor Doug Burgum approved North Dakota Senate Bill 2090 which creates and enacts a new Chapter 13-12 of the North Dakota Century Code relating to the licensure of Residential Mortgage Lenders, and amends and reenacts most Sections of Chapter 13-04.1 of the North Dakota Century Code relating to the licensure of Money Brokers. North Dakota Senate Bill 2090 becomes effective August 1, 2023.

As described in a letter from the North Dakota Department of Financial Institutions dated June 5, 2023:

“Beginning August 1, 2023, the North Dakota Residential Mortgage Lender license and Branch Registration will be available for application on the Nationwide Multi-State Licensing System (NMLS). Those companies that engage in Residential Mortgage Lending will need to hold this license type in North Dakota. If you do not engage in any other lending activity (commercial, agriculture, non-residential consumer, etc.) besides Residential Mortgage lending, there will be no need to continue to maintain the North Dakota Money Broker License once you have an active Residential Mortgage Lender license .

. . .

As long as you have an active North Dakota Money Broker license, you will be allowed to request to transition to the new Residential Mortgage Lender license in NMLS beginning August 1, 2023, through December 31, 2023.”

New NDCC § 13-12-04 lists the entities exempted from Residential Mortgage Lender licensing requirements:

“This chapter does not apply to:

      1. Banks;
      1. Credit unions;
      1. Savings and loan associations;
      1. Insurance companies;
      1. Individuals licensed under chapter 13 – 10 solely pursuant to the individual’s official duties as a mortgage loan originator;
      1. State or federal agencies and employees of state or federal agencies solely pursuant to the individual’s official duties as an employee of the state or federal agency;
      1. Institutions chartered by the farm credit administration;
      1. Trust companies;
      1. A real estate broker, broker, or a real estate salesperson as defined in section 43 – 23 – 06.1 in the brokering of loans to assist a person in obtaining financing for real estate sold by the real estate broker, broker, or real estate salesperson;
      1. A certified development corporation that qualifies as a nonprofit entity under section 501(c)(3) of the federal Internal Revenue Code [26 U.S.C. 501(c)(3)] in the offers of :

a. Loan products primarily limited to the small business administration, United States department of agriculture, or other government loan products; or

b. Nongovernmental loan products that are limited to loans to promote community development or home ownership, and these loans are offered with favorable terms including an interest rate at or below the wall street journal prime rate and loan fees of less than a quarter percent of the loan origination balance; or

      1. A nonprofit corporation that qualifies as a nonprofit entity under section 501(c)(3) of the Internal Revenue Code [26 U.S.C. 501(c)(3)] which is not primarily in the business of soliciting or brokering loans, if the nonprofit corporation makes five or fewer loans in a given calendar year, makes these loans to promote community development or home ownership, and offers these loans on favorable terms, including an interest rate at or below the wall street journal prime rate and loan fees of less than a quarter percent of the loan origination balance.”

Consequently, a new field has been created for North Dakota License Type (FI 185863) with the following field options:

ND Residential Mortgage Lender License

ND Money Broker License

ND Mortgage Loan Originator License (Exempt)

Bank, Credit Union, S&L, Ins Co, State/Fed Agency, FCA, Nonprofit (Exempt)

Not Selected

If a License Type is not set, the North Dakota License Type will default to “Not Selected”.

The formatting for the version of ND Residential Mortgage Lender Contract and for the version of ND Money Broker Contract are practically identical because the language is substantively the same in NDCC § 13-12-15 “Advance fees prohibited – Exception” (for Residential Mortgage Lenders) and NDAC 13-05-01-01 “No advance fee – Exception” (for Money Brokers). The two differences between the versions are that the ND Residential Mortgage Lender Contract includes:

    1. a new checkbox from the last sentence in NDCC § 13-12-15 for “Charge a fee in advance to lock an interest rate” which will place a check in the checkbox when the new field Services – Charge Advance Fee to Lock Rate (FI 185864) is set to “Yes”; and
    1. the language from NDCC § 13-12-27 “Notice to borrower regarding regulation by the department of financial institutions” (for Residential Mortgage Lenders) instead of the language from NDAC 13-05-01-09 “Notice to borrower regarding regulation by the department of financial institutions” (for Money Brokers).

Cx1904 “NORTH DAKOTA MONEY BROKER/RESIDENTIAL MORTGAGE LENDER CONTRACT”

PRINT CONFIGURATION CHANGE:

Cx1904 prints when North Dakota License Type (FI 185863) is set to:

ND Residential Mortgage Lender License
ND Money Broker License
Not Selected

ND Residential Mortgage Lender Contract will print when North Dakota License Type is set to “ND Residential Mortgage Lender License”.

ND Money Broker Contract will print when:

North Dakota License Type (FI 185863) is set to “ND Money Broker License”

OR

North Dakota License Type (FI 185863) is set to “Not Selected” (i.e., will continue to print by default due to the global mapping)

Cx1905 “ND MONEY BROKER LOAN DISCLOSURE STATEMENT”

PRINT CONFIGURATION CHANGE:

The requirements of NDAC 13-05-01-03 “Full disclosure required” and NDAC 13-05-01-04 “Contents of loan disclosure statement” are specific only to Money Brokers and do not apply to Residential Mortgage Lenders.

ND Money Broker Loan Disclosure Statement will print when:

North Dakota License Type (FI 185863) is set to “ND Money Broker License”

OR

North Dakota License Type (FI 185863) is set to “Not Selected” (i.e., will continue to print by default due to the global mapping)

Effective Date

These changes will be in effect on Production on August 1, 2023. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.

LEG-1182
DR-144302

The preceding is for informational purposes only and is not and may not be construed as legal advice. No third party entity may rely upon anything contained herein when making legal and/or other determinations regarding its practices, and such third party should consult with an attorney prior to embarking upon any specific course of action.