16 Aug South Carolina Legislative Update
The South Carolina legislature recently amended its state laws relating to mortgage lending definitions, effective September 16, 2017.
South Carolina Senate Bill 366
“Loan Correspondent” means a person engaged in the business of making mortgage loans as a third party originator and who does not engage in all three of the following activities with respect to each mortgage loan:
- underwrite the mortgage loan written by their employees;
- approve the mortgage loan; and
- fund the mortgage loan utilizing an unrestricted warehouse or credit line.
A loan correspondent is not a mortgage lender.
“Commissioner” is the designee of the State Board of Financial Institutions for purposes of licensing and regulation of mortgage lenders and mortgage loan originators.
“Administrator” is the Administrator of the Department of Consumer Affairs or his designee(s).
The requirements for obtaining a license from the Commissioner (for mortgage lender, mortgage broker, or loan originator) have changed as follows:
- Deleted requirement for state fingerprint-based criminal history record check (including all fees and state action related thereto);
- Prelicensing education of at least 20 hours must now include at least 3 hours on South Carolina laws and regulations.
The Commissioner may license a personal residence of a loan originator as a branch office (of a mortgage lender or a mortgage broker) if it is located more than 75 miles from a commercial branch office location.
A person who obtains a license as a mortgage lender, upon notice to the Commissioner on a prescribed form, may act as a mortgage broker. The Commissioner shall provide to the Administrator notification of which mortgage lenders are also acting as brokers. A mortgage lender who also acts as a mortgage broker is not required to obtain a license as a mortgage broker unless the person acts as a mortgage broker with regard to the majority of mortgage loans reported on the person’s Mortgage Call Report filed during the last 2 quarters of the previous calendar year and the first 2 quarters of the current calendar year.
Transitional licenses will be granted as authorized by and pursuant to the SAFE Act.
For license renewal, a licensee must complete at least 8 hours of continuing professional education annually, which must now include at least 1 hour on South Carolina laws and regulations.
Requirements for a licensed mortgage broker have changed as follows:
- Must continue to maintain at the mortgage broker’s usual place of business all books and records pertaining to the business conducted; however, a mortgage broker is no longer required to maintain a physical presence in the state of South Carolina for maintenance of such records; also deleted is the requirement for that place of business to be open during regular business hours (8:30 a.m. to 5:00 p.m. Monday through Friday), staffed by one or more licensees who can contract and accept service on behalf of the broker;
- Even without the requirement of a physical presence in the state of South Carolina, a broker may maintain one or more branch offices if the mortgage broker notifies the Administrator in writing 7 days before the opening of a branch office and indicates the branch location, the branch manager, the location of all records pertaining to business transacted in that branch, and the branch hours.