Section II
Examinations
Fees
Fines
Private Mortgage Insurance (PMI)
Real Estate Settlement and Procedures Act (RESPA)
Renewal Process & Continuing Education
Reports
Internet & Telemarketing Applications
General Questions Regarding Mortgage Operations
Q: I hold a mortgage license. How often can I expect to have my operations examined by your Department?
A: Most examinations conducted by the Department are done so on a "targeted" basis. Targeted examinations result from any number of reasons, but are often scheduled as a result of information provided to the Department from a consumer complaint, a company insider indicating operational or problematic issues, or other industry insiders reporting questionable operations. If any of these reasons exist, you can expect to see us at any time, and as often as every 90 days. We will monitor your operations to ensure that they are conducted in a manner that protects the contractual and property rights of the citizens of Georgia.
Q: What is a "Transaction Journal"?
A: A Mortgage Loan Transaction Journal is essentially a list of the mortgage applications that you have had. Rule 80-11-2-.03 establishes what must be on this list, including the names of the borrower and co-borrower, last four digits of their social security number(s), date the borrower applied for the mortgage loan, name of the loan officer and their Nationwide Mortgage Licensing System and Registry (NMLSR) unique identifier, disposition of the mortgage loan application, and date of disposition.
Q: For examination purposes, do I need to maintain all canceled checks?
A: Yes. Rules 80-11-2-.01 (4) and 80-11-2-.02 (1)(h) specify that all canceled checks be kept for a period of five years.
Q: Where can I find a copy of the current Georgia Residential Mortgage Act and the Rules and Regulations of the Department?
A: Click on the link below. Listed there are options to download the Act and the Regulations in either Word or Adobe PDF formats.
Georgia Residential Mortgage Act - Code and Regulations
Q: I want to become a mortgage licensee. What fees are charged by your Department?
A: Annual licensing/renewal fees are as follows:
- $1,000 per year for Mortgage Lenders required to be licensed; $1,000 per year for Mortgage Lenders required to be registered; $500 per year for Mortgage Brokers/Processors required to be licensed;
- $500 per year for Mortgage Brokers/Processors required to be registered.
- Mortgage Loan Originators - The initial and renewal application and license fee for mortgage loan originators shall be $100, due on or before November 30th of each year.
In addition, a $250 non-refundable initial Investigation Fee for a Mortgage License or Registration is charged when the initial application is filed, but is not charged for renewals.
Other Fees:
- Applications requiring fingerprint card submissions for individuals require a $40 fee per person to run the background checks;
- Branch Application - $350;
- Change-in-Control Application - $500;
- GRMA Per Loan Fee - Each licensee who closes a loan in their name is required to collect a $6.50 "per loan" fee from the borrower on each loan. These fees are aggregated and remitted twice each year to the Department (See "Reports" below). On-line reporting is available at: https://bkgfin.dbf.state.ga.us/GRMAFee.html.
All branch applications require the payment of a $350 application fee per branch. Only the Main Office location is included with and paid for with the initial license application fee.
Q: Does your Department ever fine its licensees?
A: Yes. Fines are imposed to insure that licensees operate as specified by the GRMA and the rules promulgated by the Department (the Code and Regulations). Fines provide the Department an option other than license REVOCATION OR SUSPENSION in order to insure compliance with GRMA. Those licensees who operate in a professional manner and strictly observe the provisions of the Code will probably never be fined. Those who ignore the provisions of the Code or who commit prohibited acts will likely pay thousands in fines.
PRIVATE MORTGAGE INSURANCE (PMI)
Q: My lender has required that I obtain PMI. What is PMI? How can I eliminate this expense?
A: Mortgage insurance is a type of guarantee to protect lenders against the costs of foreclosure. The protection is provided by private mortgage-insurance companies. Private Mortgage Insurance (PMI) allows lenders to accept a lower down payment than usual and is often required when you buy a house with less than 20% down. The insurance provides the assurance of repayment that a higher down payment would provide to cover a lender's losses in the event of foreclosure. Without mortgage insurance coverage, you might not be able to buy a home without at least a 20% down payment. The cost of PMI increases as your down payment decreases. For instance: the cost of PMI on a 7% down payment is less than the cost of PMI on a 5% down payment. Your PMI premium is normally added to your monthly mortgage payment.
For loans originated before July 29, 1999, the decision on when you may cancel your private insurance coverage does not always depend solely on the degree of your equity in the home. Sometimes, the final say on terminating a private mortgage-insurance policy is reserved jointly for the lender and any investor who may have purchased an interest in the mortgage. However, PMI can and should be terminated if certain conditions are met. The borrower may cancel PMI on the cancellation date (when equity reaches 20%) if the borrower: Submits a written request to the servicer, has a good payment history as defined in the law, and has satisfied the holder of the mortgage with evidence that the value of the property securing the mortgage has not declined below the original value and certifies that there is not a subordinate lien. If you want to request cancellation of PMI on your loan, contact your lender. In most cases, an appraisal will be required to determine the value of your property, and you will probably be required to pay for the cost of this appraisal. Another way of canceling the PMI on your loan is to refinance and get a new loan without PMI. For loans originating after July 29, 1999, the new Homeowner's Protection Act of 1998 applies. This law enables homeowners who meet certain criteria to have their PMI canceled. The law provides for two situations when the borrower-paid PMI may be canceled - it can be automatic or by request. Lender-paid PMI is excluded from these mandates but requires an up front disclosure to the borrower about lender-paid PMI.
Automatic Cancellation: In general and unless specific exceptions exist, when the homeowner's equity position reaches 22 percent of the original value of the property, the mortgage servicer must terminate collection of PMI charges.
REAL ESTATE SETTLEMENT AND PROCEDURES ACT (RESPA)
Q: Where can I obtain additional information about the provisions of compliance with RESPA?
A: Click here to access information regarding RESPA.
RENEWAL PROCESS & CONTINUING EDUCATION
Q: I already have a mortgage license. What will happen when it is time to renew my license?
A: Renewals are submitted through the Nationwide Mortgage Licensing System (NMLS). Notices for license renewal application submissions are usually sent in October. Applications must be filed NO LATER than November 30th of each year. There is a substantial fine for late filing of a renewal application, and renewal of a license will not occur until all outstanding fines are paid. Applicants complete the application and pay all outstanding fees and fines via the Internet, and in order to avoid being fined for late renewal, licensees must complete their application and payment by the November 30th deadline. Licenses expire annually on December 31st.
All other outstanding business or administrative issues with our licensees will be settled at renewal time. No renewal applications will be approved until all outstanding issues have been resolved.
Q: Are there any continuing education requirements in Georgia in order to maintain a Broker/Processor license?
A: Yes. Brokers and processors must have obtained 8 hours of continuing education within the appropriate 12 month period in order to renew their license. A mortgage broker that is also a mortgage loan originator may apply the 8 hours of annual continuing education required by O.C.G.A. 7-1-1004(g) to the continuing education requirement.
Read more about continuing education requirements here.
Q: I am a mortgage licensee. What reports must I file with the Department each year?
A: License Renewal Applications must be filed no later than November 30th each year.
The "$6.50 Fee statement" is due twice each year: one report is due September 1 (covers all residential mortgage activity from January 1 through June 30 of that year); the second report is due March 1 (covers the period of July 1 through December 31 of the previous year).
"Letter Form" reports must be made anytime an employee is suspected of criminal activity or when the licensee is sued or relocates the business.
Amendments to the existing record of the licensee must be posted through the Nationwide Mortgage Licensing System (NMLS). Frequent changes requiring reporting include the following, and additional information and links may be found on the Mortgage Forms & Applications page.
- Change in Control - File for approval and pay applicable fees before acquisition;
- Changes in Management - File for approval prior to placement;
- Change in Business Structure - (generally involves change in control or new EIN);
- Establishment of a new in-state Georgia Branch Office & Manager - Prior approval & fee payment required;
- Change in approved Branch location's Manager - File for approval within 15 days of placement;
- Material change in the financial statement - File notice within 30 days of change;
- Main office or an approved branch relocation - File notice within 30 days of change;
- Mailing address change;
- Closing of a branch office;
- Changes in company contact information (company or complaint contact);
- Changes in registered agent;
- D/B/A changes or additions.
INTERNET & TELEMARKETING APPLICATIONS
Q: What telemarketing activities require a license for a company that solicits and sells mortgage leads?
A: The requirement for a license depends on the information taken, which might be an "application" for state licensing purposes. The following information applies to "telemarketing" - whether the information is obtained via standard phone solicitations, or through internet lead generation.
- Telemarketers who accept applications for loans on their own initiative from consumers and without a contract from a licensee for sale of the contact to licensees are required to be licensed under the Act.
- Telemarketers who contact Georgia consumers and generate a list of potential residential mortgage contracts under a written contract from a licensee are not required to be licensed, provided:
- The telemarketer makes it clear that they are contacting the consumer on behalf of (a) specific licensee(s);
- The fee for the service is on a "flat-fee" basis, not a "per-loan" basis or a closed loan fee basis;
- The company must be in the telemarketing business and not perform other mortgage related functions for the licensee; and
- The company may only gather minimal contact and non-specific property or income information. Information gathered which is sufficient to verify credit, employment, income, date of birth etc. cannot be gathered. This is considered application information and the telemarketer must then have their own license.
GENERAL QUESTIONS REGARDING MORTGAGE OPERATIONS
Q: Can I work for more than one licensee as a loan originator?
A: No. As of July 1, 1999, the law requires that a loan originator work for only ONE licensee.
Q: I am an originator and have changed employers. Can I still be compensated for loans that were in the pipeline when I left my previous employer.
A: The Georgia Department of Banking and Finance will interpose no objection to originators who have left the employment of a lender or broker being compensated for the work that they performed before changing jobs. Consequently, unless your employment contract contains language to the contrary, it is permitted for an originator to be compensated for these loans. As a practical matter, however, many brokers or lenders will not continue to compensate individuals who have left their employment. You should remember that the loan files remain the property of the employer and taking those files to a new employer may be considered theft. To avoid any misunderstanding on this issue, make sure that you operate with an employment agreement which specifies your rights and responsibilities as an employee. Should your borrowing customer wish to follow you to your new employer, they would have to contact your former employer and request a withdrawal of that application. They would then be free to apply elsewhere.
Q: I know that referral fees are prohibited; however, I want to give a gift to a customer who provided me with a list of friends who might need a loan. Is this considered a referral fee?
A: Yes. For more information regarding RESPA and a list of frequently asked questions, please go to the U.S. Department of Housing and Urban Development