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Important Definitions:
Am I subject to continuing education requirements?
Yes. All mortgage lenders, mortgage brokers, and mortgage loan originators shall complete and submit to the Division evidence of at least 9 hours of continuing education every year at the time they submit their license renewal application. For the 2008 renewal period, approved courses that are successfully completed after July 1, 2007, through the time for renewal in 2008, will count towards fulfilling this requirement.
Definition of Mortgage Lender: Mortgage lender means any person who, for valuable consideration, originates, sells, or services mortgages, or holds himself, herself, or itself out as a person who, for valuable consideration, originates, sells or services mortgages.
Definition of a Mortgage Broker: Mortgage broker means any person who, for compensation or gain, acts as an intermediary between borrower and lender to assist a person in obtaining or applying to obtain a mortgage loan or holds himself, herself, or it self out as being able to assist a person in obtaining or applying to obtain a mortgage loan.
Definition of a Mortgage Loan Originator: Mortgage loan originator means any person acting under the supervision of a licensee and who, for compensation or gain, takes or receives a mortgage application, assembles information, and prepares paperwork and documentation necessary for obtaining a mortgage loan or arranges for a conditional mortgage loan commitment between a borrower and a lender, or arranges for a loan commitment for a lender. The term, mortgage loan originator, does not include an employee of a licensee whose job responsibilities are limited to clerical tasks that do not include processing of mortgage loans.
Exemptions: The following entities and their employees and exclusive agents are exempt from the provisions of this Act:
- Any state bank and its subsidiary;
- Any national bank and its subsidiary;
- Any bank holding company and its subsidiary;
- Any other federally insured financial institution, and its holding company and subsidiary;
- Any South Dakota chartered trust company;
- Any real estate broker licensed pursuant to chapter 36-21A; and
- Any insurance company or any person acting as an intermediary thereto, if participating in mortgage lending activities solely with its own assets and for its own portfolio.
Where can the application forms be found?
Application packets must be requesting in writing from the South Dakota Division of Banking. You can request the packets by email (mortgageinfo@state.sd.us), fax (605-773-5367) or mail to 217 ½ W Missouri Avenue, Pierre, SD 57501.
In your request be sure to include the type of application you are requesting; the name and mailing address to send the packet to; and if the applicant is a mortgage lending entity, the number of individuals who will need to complete background checks.
What is the initial cost of my license/registration?
The original, non-refundable, license/registration fee is as follows:
- Mortgage lender $750
- Mortgage broker $500
- Mortgage loan originator $150
What are the renewal fees of my license/registration?
The annual renewal fee is as follows:
-
Mortgage lender $500
- Mortgage broker $350
- Mortgage loan originator $75
How do I license my mortgage broker company?
Mortgage broker companies are unable to apply for licensure. SDCL 54-14 requires individual brokers to become licensed. Each requirement of the act is specific to the individual: application and background investigation, work experience, surety bond, and continuing education. Therefore, each broker will need his or her own license, bond, background investigation, and continuing education, in addition to meeting the other requirements in SDCL 54-14.
How long will my license be valid?
Each license and registration will expire annually on December 31.
What is the filing deadline for renewal applications?
Any application for renewal of a license or registration under this Act must be postmarked to the director no later than December 1st and must be accompanied by the renewal fee. Any application filed with the
Division after December 1st but before January 1st will incur a 20 percent late fee in addition to the renewal fee. Any renewal application after December 31st will be treated as a new application and will require the new license fee.
Is there any experience requirements needed to obtain a license?
The equivalent of two years of service under the supervision and direction of a licensed mortgage broker or mortgage lender, or another jurisdiction’s equivalent thereof, is required before that person is eligible to apply for a license.
In the case of a mortgage lender, where the applicant is an entity, the person(s) responsible for conduct of business will need to meet the minimum experience requirement.
Anyone licensed as a mortgage lender or broker with the South Dakota Division of Banking prior to July 1, 2007, is exempt from this requirement.
What is a satisfactory proof of experience?
Satisfactory proof of experience as required by SDCL 54-14 may include but is not limited to:
- valid copies of W-2 or 1099 tax forms verifying employment; or
- valid copies of form 1120, 1120S, or 1065 corporate tax returns signed by the broker or
manager as owner of the business;
AND
- a signed letter from the lender or broker who employed the applicant, on the lender’s or
broker’s letterhead, identifying the applicant’s job duties and verifying that the individual has
competently performed his or her duties for the required time period; or
- such other information that the Director finds satisfactory to verify that an applicant has
satisfied the experience requirement in SDCL 54-14-22.
As a Loan Originator am I required to register in the State of South Dakota?
Yes. All mortgage loan originators must be registered with the Division and must undergo a background investigation.
How do I become registered as a loan originator in the State of South Dakota?
Application packets must be requesting in writing from the South Dakota Division of Banking. You can request the packets by email (mortgageinfo@state.sd.us), fax (605-773-5367) or mail to 217 ½ W Missouri Avenue, Pierre, SD 57501.
As a loan originator am I required to notify the Division of Banking when I change employment?
Yes. A new application must be completed which will identify the name and business address of the licensee that you are working for.
Am I subject to the new application fee each time I change employment?
Yes, SDCL 54-14 does not provide for the transfer of loan originator registrations.
Can I work as a loan originator for more than one licensee?
Yes, however, a separate registration is required for each employment relationship.
What is a surety bond?
A surety bond is a contract among at least three parties: (i) the principal, (ii) the obligee, and (iii) the surety. The principal would be the licensed company or individual, the obligee would be the State of South Dakota and the surety would be the company providing the insurance. In this contract, the surety agrees to make the obligee whole (usually by payment of money) if the principal defaults in the performance of its promise to the obligee. The contract is formed so as to induce the obligee to contract with the principal, i.e., to demonstrate the credibility of the principal.
Who is required to obtain a surety bond?
Any mortgage lender or broker who applies for a license from the Division is required to obtain a surety bond.
How do I obtain a surety bond?
A bond is a form of insurance. The bond shall be issued by a surety company qualified to do business as a surety in the state of South Dakota. The Division will provide a surety bond form along with each application packet.
What is the amount of the surety bond?
Any applicant for a license needs to maintain a bond in the amount of $25,000.00.
Am I required to send my surety bond to the Division of Banking?
Yes. The original bond should be filed at the Division of Banking office. For all new licensees, the bond must accompany your application for licensure.
Who is the obligee on the surety bond?
The obligee shall be the “State of South Dakota.”
When did the requirement for background checks become effective?
As of July 1, 2007, all mortgage lender and broker applicants and all loan originator registrants are required to undergo a background investigation at the time of application or renewal.
Who will be required to have a background check?
Each applicant for licensure and registration under the Act shall submit to a state and federal criminal background investigation by means of fingerprint checks by the South Dakota Division of Criminal Investigation (DCI) and the Federal Bureau of Investigation (FBI).
In the case of a mortgage lending applicant that is a corporation, partnership, limited liability company, association, or trust, each individual who has control of or involvement in the day to day operations of the applicant entity or who is the principal or manager shall consent to a state and federal background investigation.
How do I get a fingerprint packet?
The Division of Banking will provide fingerprint cards along with each application packet. Application packets must be requesting in writing from the South Dakota Division of Banking. You can request the packets by email (mortgageinfo@state.sd.us), fax (605-773-5367) or mail to 217 ½ W Missouri Avenue, Pierre, SD 57501.
In your request be sure to include the type of application you are requesting; the name and mailing address to send the packet to; and if the applicant is a mortgage lending entity, the number of individuals who will need to complete background checks.
How many sets of fingerprint cards will I need to submit?
Each individual will be required to submit two sets of fingerprints on the forms provided by the Division of Banking, taken by a law enforcement agency. The fingerprint cards must be attached to the application.
What happens with my fingerprint cards when it is received by the Division?
If completed properly, the Division of Banking will forward the fingerprint card to the South Dakota Division of Criminal Investigation. The DCI will conduct the state background investigation and will forward the information to the FBI for the national check. The results of both the state and national criminal background checks are then sent to the Division of Banking. The results of each background investigation will be reviewed before final approval is granted to an applicant.
Will background check be completed on current licensees?
Yes, at renewal time, prior to December 31, 2007.
How much does the background check process cost?
As of October 1, 2007, the cost is $39.25 per person. Checks should be made payable to the South Dakota Division of Criminal Investigation. Be sure to include a separate check or money order for each person.
Can the information found on either the DCI or FBI reports be shared with anyone?
No. The information is confidential and will be used by the Division of Banking only for the purpose of the license and registration process. It is also possible that this information could be used in a hearing initiated as a result of the Division denying an application.
Is it true that the results from the FBI fingerprints may take four to six weeks?
Yes. In some instances, it may take longer. Once the fingerprint cards have been delivered to the DCI and FBI, we cannot check on status of an individual’s background check.
Why might an applicant be denied?
Some reasons are:
- Refusal to consent to a background investigation
- The applicant has been convicted of forgery, embezzlement, obtaining money under false pretenses, theft, extortion, conspiracy to defraud, or other similar offenses, or of any crime involving moral turpitude in a court of competent jurisdiction in this state, or, in any other state, territory, or district of the United State, or in any foreign jurisdiction
- Failure to provide all required information and documentation
Where can I obtain continuing education?
The Division will be approving continuing education providers as we move forward. The Division has posted the name and contact information for each training organization that is approved in South Dakota on our website.
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