17:11C-57 Issuance of licenses for mortgage loan originators, individual licensees, lenders, brokers.

7. Beginning no later than July 31, 2010, or a later date approved by the Secretary of the United States Department of Housing and Urban Development pursuant to the provisions of section 1508 of the federal "Secure and Fair Enforcement for Mortgage Licensing Act of 2008," Pub.L.110-289 (12 U.S.C. s.5107), the commissioner shall begin issuing licenses for individual licensees under this act, utilizing the Nationwide Mortgage Licensing System and Registry, or other entity designated by that nationwide system and registry, as required or permitted by the federal "Secure and Fair Enforcement for Mortgage Licensing Act of 2008" and as otherwise deemed appropriate by the commissioner to carry out the provisions of this act, if the following conditions are met:

a. For mortgage loan originators and transitional mortgage loan originators:

(1) A completed application for a new license or for a renewal of a license, submitted to the commissioner on the form, in the manner, and with appropriate evidence in support of the application, as required by this act and as may be prescribed by the commissioner.

(2) A background check in connection with an application, based upon information provided to and received from the Division of State Police, and provided to and received from or through the Nationwide Mortgage Licensing System and Registry, which does not contain any disqualifying information as set forth in this paragraph. The background check shall include a State criminal history record background check based upon an exchange of fingerprint data with the State Bureau of Identification in the Division of State Police, for which the division shall promptly notify the commissioner if the subject of the original criminal history record background check is arrested for a crime or offense in this State after the date the background check was performed, and a check of both criminal and non-criminal information as requested from and distributed to the Federal Bureau of Investigation and any other governmental agency through the Nationwide Mortgage Licensing System and Registry as follows:

(a) fingerprints, for submission to the Federal Bureau of Investigation and any other governmental agency authorized to receive this information for a state, federal, and international criminal history record background check, to determine whether the individual has been convicted of, or pled guilty or nolo contendere to, a felony in a domestic court, which in this State includes any crime of the fourth degree or higher punishable by a term of imprisonment of more than one year, or in a foreign or military court:

(i) during the seven-year period preceding the filing of the application, except that a conviction under this sub-subparagraph which is pardoned or expunged shall not be considered disqualifying information; or

(ii) at any time preceding the filing of the application, if the felony involved an act of fraud, dishonesty, a breach of trust, or money laundering, except that a conviction under this sub-subparagraph which is pardoned or expunged shall not be considered disqualifying information; and

(b) personal history and experience, collected in a form prescribed by the Nationwide Mortgage Licensing System and Registry, and with the permission of the applicant, in order for that nationwide system and registry and the commissioner to obtain:

(i) an independent credit report from a consumer reporting agency described in section 603(p) of the Fair Credit Reporting Act, Pub.L.91-508 (15 U.S.C.s.1681a(p)), for use in making a determination of character and fitness pursuant to paragraph (3) of this subsection; and

(ii) information related to any administrative, civil or criminal findings by any governmental jurisdiction, to determine whether the individual had a mortgage loan originator license revoked in any governmental jurisdiction, except that a subsequent, formal vacation of a revocation shall not be considered disqualifying information.

(3) A determination of character and fitness, based upon the information related to personal history and experience obtained pursuant to subparagraph (b) of paragraph (2) of this subsection and other available sources, whereby the applicant has demonstrated financial responsibility, character, and general fitness as to command the confidence of the community and to warrant a determination that as a mortgage loan originator the applicant will operate honestly, fairly, and efficiently within the purposes of this act. For the purposes of this paragraph, a determination by the National Mortgage Licensing System and Registry that the applicant cheated or attempted to cheat on an examination required for licensure or for continued licensure under P.L.2009, c.53 (C.17:11C-51 et seq.) shall be evidence that the applicant lacks the requisite character and fitness for licensure. For purposes of this paragraph, an applicant has demonstrated not to be financially responsible if the applicant has shown a disregard in the management of the applicant's own financial condition, which may include, but is not limited to:

(a) current outstanding judgments, except judgments solely as a result of medical expenses;

(b) current outstanding tax liens or other government liens and filings;

(c) foreclosures during the three-year period preceding the filing of the application; or

(d) a pattern of seriously delinquent accounts during the three-year period preceding the filing of the application.

(4) A demonstration of employment by one, and not more than one, business licensee as required by paragraph (1) of subsection c. of section 4 of this act.

(5) The completion of any pre-licensing education requirements as set forth in section 9 of this act.

(6) The successful passage of a qualified written test based upon the testing requirements as set forth in section 10 of this act.

(7) The completion of any continuing education requirements, if applicable, as set forth in section 11 of this act.

(8) A registration with the Nationwide Mortgage Licensing System and Registry as required by section 12 of this act.

(9) A demonstration of coverage by a surety bond as required by section 13 of this act.

(10) The payment of any required fees under this act, as established by the commissioner by regulation and payable to the commissioner or, by arrangement of the commissioner, to the Nationwide Mortgage Licensing System and Registry on behalf of the commissioner, or as set forth by the nationwide system and registry and payable to that nationwide system and registry.

b. For qualified individual licensees:

(1) A completed application for a new license or for a renewal of a license as a qualified licensed individual for a residential mortgage lender or broker, submitted to the commissioner on the form, in the manner, and with appropriate evidence in support of the application, whereby the applicant follows the licensing procedure and meets the licensing criteria applicable to a mortgage loan originator, as set forth in subsection a. of this section, except that the applicant shall not request or be issued a separate license as a mortgage loan originator under that subsection.

(2) A determination with respect to any stricter or additional licensing requirements that the commissioner may, by regulation, establish.

(3) The payment of any required fees under this act, as established by the commissioner by regulation and payable to the commissioner or, by arrangement of the commissioner, to the Nationwide Mortgage Licensing System and Registry on behalf of the commissioner, or as set forth by the nationwide system and registry and payable to that nationwide system and registry.

c. For individuals, the following provisions shall also apply:

(1) An applicant for a mortgage loan originator license who has met all the requirements for licensure except the demonstration of employment referenced in paragraph (4) of subsection a. of this section shall be considered to be in approved inactive status and designated as such in the Nationwide Mortgage Licensing System and Registry and may remain in that status for as long as the applicant renews the approved inactive status annually and meets the continuing education requirements as required by section 11 of P.L.2009, c.53 (C.17:11C-61).

(2) An applicant for licensure as an individual licensee who has unresolved credit issues but who demonstrates to the satisfaction of the commissioner a good faith effort to achieve the level of financial responsibility required by paragraph (3) of subsection a. of section 7 of P.L.2009, c.53 (C.17:11C-57) may be deemed in approved conditional status and be designated as such in the Nationwide Mortgage Licensing System and Registry. The applicant may remain in approved conditional status so long as the applicant continues to demonstrate substantial progress toward the achievement of financial responsibility, renews the applicant's mortgage loan originator license or qualified individual license annually, and meets the continuing education requirements established by section 11 of P.L.2009, c.53 (C.17:11C-61). Upon demonstration to the satisfaction of the commissioner that the applicant has achieved financial responsibility, and predicated on the applicant continuing to fulfill all other applicable requirements for such status, the license status of the individual shall be revised to approved. While the applicant's license is in approved conditional status, an individual may engage in activity as a mortgage loan originator or a qualified individual licensee in accordance with the provisions of P.L.2009, c.53 (C.17:11C-51 et seq.) and all applicable rules.

(3) For applicants as individual licensees, an offense that was the subject of an order granting the individual admission to the New Jersey Pre-trial Intervention Program pursuant to the provisions of N.J.S. 2C:43-12 through 22, and such offense having been dismissed with prejudice in accordance with subsection d. of N.J.S. 2C:43-13, or the applicant having been admitted to a functionally equivalent program of another state or of the United Stated whereby an offense was dismissed or a felony conviction was avoided or eliminated from the record upon the applicant having successfully completed the program as established by the submission of confirming documentation, shall not be considered disqualifying information for purposes of subsection a. of this section.

(4) The commissioner may deem abandoned an application for licensure as a mortgage loan originator, transitional mortgage loan originator, or a qualified individual licensee if the application fails to meet all of the requirements of a complete application within 90 days of the date on which the application was initially submitted. A person whose application is deemed abandoned shall be required to submit a new application in order to pursue licensure as a mortgage loan originator, transitional mortgage loan originator, or a qualified individual licensee. The commissioner may adopt rules addressing notices of abandonment and the subsequent submission of new applications.

L.2009, c.53, s.7; amended 2018, c.108, s.5.