The Commissioner may, by order, deny, suspend, revoke, or refuse to issue or renew a license of a licensee or applicant for violations of the Mortgage Licensing Act or may restrict or limit the activities relating to mortgage loans of any licensee or any person who owns an interest in or participates in the business of a licensee.

The Commissioner may, by order, impose a civil penalty upon a licensee or any partner, officer, director, or other person occupying a similar status or performing similar functions on behalf of a licensee for any violation of the Mortgage Lending Act. The civil penalty shall not exceed twenty-five thousand dollars ($25,000) for each violation of the Mortgage Licensing Act by a mortgage broker, lender or servicer. The Commissioner may impose a civil penalty of up to twenty-five thousand dollars ($25,000) for each violation of the Mortgage Licensing Act by a person other than a licensee or exempt person.

The mortgage examination staff of the North Carolina Office of Commissioner of Banks has prepared a listing of the most common violations cited in Examination Reports.

Regulatory Authority	Violation
N.C. Gen. Stat. § 53‑244.040 (a)	Licensee allowed individuals to solicit and accept applications for mortgage loans without first obtaining a license as a mortgage loan originator.
N.C. Gen. Stat. § 24-1-1A (c) (1) (f)	Licensee collected miscellaneous fees exceeding statutory limit (.25% of loan amount or $150, whichever is greater).
1) Declaratory Ruling 2003-1 concerning the Mortgage Lending Act.    2) HUD Mortgagee Letter 00-15.	Licensee’s branch is operating as an unlawful net-branch arrangement.
N.C. Gen. Stat. §24-1.1A(a1)(2)	The “Notice of Information and Examples of Amortization of Home Loans” disclosure was not provided to applicants.
N.C. Gen. Stat. § 24‑10(g)	Licensee collected fees on subordinate lien mortgages exceeding the statutory limit  (2% of loan amount).
1) 04 N.C.A.C. 03M .0501(c).   2) Regulation B, Equal Credit Opportunity Act (15 USC 1691), 202.9 Notifications.    3) Fair Credit Reporting Act (FCRA), 15 U.S.C.	Licensee failed to notify individuals of adverse action taken on credit applications.
N.C. Gen. Stat. § 75-17 & 18	Licensee failed to notify applicants of the right to select insurance of their choice.
N.C. Gen. Stat. § 53-244.111 (8)	Borrowers are paying a premium for discount points yet deriving little benefit in return.
04 NCAC 03M. 0502 (d).	The licensee maintains records in an out-of-state location without OCOB approval of such a location.
1)N.C. Gen. Stat. §53-244.109 (5)   2) N.C. Gen. Stat. § 53-244.111 (1) & (8)	Licensee failed to disclose on the HUD-1 Settlement Statement all monies paid or received in connection with making a federally regulated loan.
1) N.C. Gen. Stat. § 53-244.030 (11)   2) N.C. Gen. Stat. § 53-244.100 (a)	Licensee is compensating individuals as contract labor rather than treating the individual as an employee for purposes of compliance with the federal income tax laws.

Revised: 06/15/2010