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 on any ground on which it might refuse to issue an original license 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: Laws, Regulations, Rulings, and Publications

 

Law or RegulationSummary
Covered employee background checks (O.C.G.A. Section 7-1-1004)Mortgage broker and mortgage lender licensees 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.

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 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.
Failure to comply with the Bank Secrecy Act (Department Rule 80-11-1-.06)The Rule requires every loan or finance company to develop and implement a written anti-money laundering program and comply with the filing requirements, recordkeeping requirements, currency transaction reporting, suspicious activity reporting, and other requirements set forth in the Bank Secrecy Act.
Failure to File Timely or Accurate Call Reports (O.C.G.A. 7-1-1004.1 and Department Rule 80-11-3-.01(28))Each mortgage broker and mortgage lender licensee is required to submit to the Department reports of condition via the mortgage call report in the NMLS, including the licensee's financial condition, quarterly or annually, as provided for in the statute. The information submitted should be accurate and timely. Please do not file all zeros in the financial condition section of the call report.