Examination Overview

The Mortgage Licensing Act (“MLA” as codified in NCGS Chapter 53, Article 19B) allows the NC Commissioner of Banks (“NCCOB”) to conduct routine examinations of the books and records of any licensee in order to determine the compliance with the Mortgage Licensing Act and any rules adopted pursuant to the authority of NCGS 53-244.115. 

Compliance with Federals Laws and Regulations will also be examined as it relates to the types of records to be maintained, as detailed in the North Carolina Administrative Code (“NCAC”).  04 NCAC 03M .501.

Licensees should develop internal procedures concerning state examinations and make sure all staff members are aware of what must be done to facilitate the examination process. 

North Carolina law requires that licensees afford full access to all premises, books, records and information that the examiner deems necessary.  Attempts to prevent the examiner from conducting the examination may lead to a monetary fine, license suspension or revocation.

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Examination Process

Notification

Normally, licensees will receive an Examination Notification Entry Letter as shown here.  

**EXAMINATIONS ARE NOT REQUIRED TO BE SCHEDULED IN ADVANCE.**

Accompanying the notification will be two questionnaires - The Uniform Managers Questionnaire and the NC Managers Questionnaire. These forms are to be completed by the Qualifying Individual in response to questions concerning the licensees' mortgage lending business. 

Scheduling

An examiner will contact the Licensee’s Qualifying Individual to schedule an examination date.  

Examination Location

Most examinations are conducted where the examination documentation is stored.  Normally this is the Licensee’s main office.  

An Examination of a Licensee with corporate headquarters located out-of-state is conducted at a branch office located in North Carolina.  Such an examination may also be conducted at the NCCOB's office; the licensee would be required to deliver examination documentation to the NCCOB. 

An Examination of a Licensee with more than one branch office is conducted at a location chosen by the examiner.

Examination Report

The Licensee will receive an Examination Report upon completion of the examination.  Subject to examination findings, a response may be required from the Licensee. 

Frequency

Examinations of Mortgage Lenders and Brokers licensed by the state of North Carolina are conducted approximately every 36 months. 

Survey

Licensees will be asked to complete a post-examination survey.  The survey form will be sent electronically and may be completed online. Access  post-examination survey here.