Kentucky Adopts Rules under the Mortgage Licensing and Registration Act and Modifies Provisions Relating to Notary Fees
The Kentucky Department of Financial Institutions implemented rules under the Mortgage Licensing and Regulation Act (MLRA) including; claims of exemption, licensing and registration, and report of condition. Kentucky Revised Statutes Chapter 286.8 governs mortgage loan companies and brokers. KRS 286.8-140(1) gives the commissioner the power to promulgate administrative rules necessary to accomplish the basic purpose of KRS Chapter 286.8. Through this authority the following provisions regarding claims of exemption, licensing and registration, and report of condition.
- Applicant must submit completed application
- Include documentation with the application to support claim of exemption.
- If the reason for exemption arises because of status as a non-profit organization that has affordable housing as a primary purpose of its operation, file a notarized Form ML-9.
- If relying on exemption as mortgage Loan Company or broker regulated by the U.S. Department of HUD, file a notarized Form ML-10.
- Section 1 pertains to a person applying for licensure as a mortgage loan company or broker and lists the required documents to be submitted.
- Section 2 governs registration of a branch and the required documentation.
- Section 3 is related to registration of a mortgage loan originator or mortgage loan processor and required documentation.
- Section 4 explains surety bonds required for applicants applying for registration, renewal, or reinstatement, as a mortgage loan originator.
- Section 5 explains the factors used to determine approval of an application:
- First, applicants must demonstrate financial responsibility; a credit score of 600 or higher is demonstration of financial responsibility.
- If the applicant has a credit score below 600 the commissioner will review the credit report to make a determination as to financial responsibility. The commissioner will look at: “(a) Any outstanding judgments, excluding judgments arising solely from medical expenses for the applicant or an immediate family member; (b) Any outstanding tax liens or other governmental liens; (c) Any foreclosures occurring within five (5) years of the date of application or renewal; (d) Any bankruptcies occurring within five (5) years of the date of application or renewal; and (e) Any delinquent accounts occurring within five (5) years of the date of application or renewal.”
- Character and general fitness must also be demonstrated by the applicant and the commissioner shall make a determination after review of all relevant documentation.
- Section 6 explains what to submit with the State Regulatory Registry, LLC, at http://www.stateregulatoryregistry.org/NMLS, as part of the NMLS.
- Section 7 explains that if an application has been abandoned the applicant must reapply and resubmit.
- Section 8 explains inactive status for members of the armed forces and required documentation; a member of the armed forces who holds a license in good standing may apply for “inactive status during the period of time that the member is mobilized or deployed, and for a period of six months following termination of the mobilization or deployment.”
Report of Condition
KRS 286.8-020(14) requires every mortgage loan company or broker that employs a mortgage loan originator to complete and timely submit to the NMLS an annual report of condition. 808 KAR 12:110 Section 1 requires each mortgage loan company or broker to complete and submit a report of condition pursuant to KRS 286.8-020(14) using the Form ML-11, NMLS Call Report. The report must be submitted electronically to the Nationwide Mortgage Licensing System and Registry according to the schedule at http://mortgage.nationwidelicensingsystem.org.
- “No fee or compensation shall be allowed or paid for affixing the jurat of a notary public to any application, affidavit, certificate or other paper necessary to be filed in support of any claim for the benefits of federal legislation for any person or his dependents who has served as a member of the National Guard or a reserve component or as an active member of the Army, Navy, Air Force, Coast Guard, or Marine Corps of the United States.”
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