Common Violations Cited in Mortgage Broker/Processor and Mortgage Lender Examination Reports

O.C.G.A. Section 7-1-1017 states, in part, that the Department may suspend or revoke an original or renewal license or registration on any ground on which it might refuse to issue an original license or registration or for a violation of any provision of the GRMA or the Georgia Fair Lending Act (GAFLA) or any rule or regulation issued under the GRMA or under the GAFLA.

The following table is a listing of eight of the most common violations cited in mortgage lender and mortgage broker exam reports. The summaries provided are not comprehensive of the GRMA, GAFLA,  or related Department Rules and Regulations.  Georgia Laws and Department Rules, Regulations, and Rulings governing financial institutions and licensees under the regulatory authority of the Department can be found here:


Law or Regulation




Covered employee background checks                                (O.C.G.A. Section 7-1-1004 )

Mortgage broker and mortgage lender licensees and registrants are required to obtain and maintain a G.C.I.C.-handled criminal background check for a covered employee.  The background check must be initiated within 10 days of the date of hire.

Employee files (Department Rule 80-11-2-.02)

Licensees are required to maintain a complete employee file on each employee including:

all documents related to hiring the employee, including criminal background check, date employment began, and a print out or screenshot confirming that the Department's public records were reviewed on NMLS Consumer Access to verify eligibility for employment with such review taking place prior to the date of hire.

The most common item noted missing is the printout or screenshot of the NMLS Consumer Access check.

Dealing with Unlicensed Persons  (O.C.G.A. Section 7-1-1002)

Licensees are prohibited from selling, purchasing, transferring, or otherwise transaction mortgage loan business with a person that is required to be licensed as a mortgage broker or mortgage lender but is not duly licensed or otherwise exempt.  A licensee is required to conduct a sufficient level of due diligence on counterparties to ensure compliance with this statute.

Unlicensed loan origination caused by the forfeiture of the mortgage loan originator exemption.  (O.C.G.A. Section 7-1-1002)

Generally, to qualify for exemption from licensure as a mortgage broker or mortgage lender, employees of the licensee who engage in mortgage brokerage or lending activities must meet all of the following criteria:

  • Work exclusively for one Georgia mortgage lender or mortgage broker licensee.
  • Be properly supervised by the licensee.
  • Cannot be compensated for the performance of mortgage loan activity as an independent contractor or on a 1099 basis.
Mortgage Loan Transaction Journal  (Department Rule 80-11-2-.04)

The Rule requires that licensees keep a complete and accurate journal of mortgage loan transactions.  This journal must be updated no less frequently than every seven days.  Failure to maintain a complete, accurate, and up-to-date journal can be grounds for revocation of the license.

Failure to Report Certain Events (O.C.G.A. 7-1-1007)

A licensee or registrant shall, within ten days after knowledge of the event, report in writing to the department:

  • Any knowledge or discovery of an act prohibited by O.C.G.A. Section 7-1-1013;
  • The discharge of any employee for dishonest or fraudulent acts; and
  • Any administrative, civil, or criminal action initiated against the licensee, registrant, or any of its control persons by any government entity.
Failure to timely update information in NMLS (Department Rule 80-11-4-.11)

Generally, the rule requires the licensee and its control persons to keep current at all times its information in NMLS.  Amendments or changes to NMLS information must be made in within 10 business days of the date of the event necessitating the change.

GAFLA indication (Department Rule 80-11-2-.02)

Licensees must maintain in their books and records an indication of whether or not each loan has points and fees of 5% or more, as calculated under the Georgia Fair Lending Act.  Failure to maintain this indication subjects the licensee to a fine of $1,000 per loan for which the indication has not been maintained.