Mortgage Lender Licensing Requirements
New: Administrative Rules - Notice of Public Hearing on Proposed Adoption (Updated 5/8/2008)
Residential mortgage lenders doing business in Montana are required to be licensed by the Division of Banking and Financial Institutions (Division) as of October 1, 2008. This new licensing requirement was created by the Montana Residential Mortgage Lender Licensing Act (Act) that was signed into law by Governor Brian Schweitzer on May 3, 2007 as part of House Bill 69 (HB 69). Additional information related to this Act, including administrative rule notices and application forms will be posted by the Division on this webpage as they become available. Mortgage Lender Licensing Press Release
The State of Montana does not require licensure of first lien mortgage lenders at this time (licensing required under HB 69 as of October 1, 2008). This applies to both wholesale and retail lending in Montana. Second lien mortgage lenders that exceed the usury as outlined in Section 31-1-107, MCA are required to obtain consumer loan licenses. The current usury is 15% interest. Therefore, any lender making second lien mortgage loan at an interest rate, which exceeds 15% is required to be licensed in accordance with the Montana Consumer Loan Act. The State of Montana does not require a license for second lien mortgage lenders that make loans under this usury at this time (licensing required under HB 69 as of October 1, 2008).
Mortgage lenders are encouraged to complete the mortgage lender questionnaire relative to their Montana business activity. The Division will review this information and will issue a position letter regarding the applicable licensing requirements. This quesionnaire must be mailed to the Division at the address identified on the questionnaire cover letter. This information will also be maintained on file in the event that there is a change in any licensing requirements that may apply to residential mortgage lenders.
Mortgage lenders engaged in mortgage broker activity are required to be licensed in accordance with the Montana Mortgage Broker and Loan Originator Licensing Act (Act). Mortgage broker activity includes transactions in which a person or entity provides services for a fee as an intermediary between a borrower and lender in obtaining financing for the borrower that is to be secured by a residential dwelling on real property with a loan provided by the lender. Montana law also requires licensure of any mortgage lender that engages in table funding. Table funding is defined in ARM 2.59.1702 as the closing of a loan naming a mortgage broker, a mortgage broker's business entity or a loan originator as the lender on the mortgage loan note, which note is then sold within three business days of closing to another party. ARM 2.59.1708 sets forth that table funding does require mortgage broker licensure. A physical office in Montana staffed by a designated manager (individual mortgage broker licensee) is required under the Act. The licensure of individual loan originators engaged in mortgage broker activity is also required under this Act. Please be advised that the Division of Banking and Financial Institutions (Division) cannot issue exemptions to licensure under the Act. Exemptions are specifically outlined under Section 32-9-104, MCA . The Division has determined that the co-brokering of a Montana residential mortgage loan is only permitted between Montana licensed mortgage broker licensees or entities otherwise exempt from the licensing requirement.
The State of Montana does not regulate entities solely enagaged in the servicing of mortgage loans or the purchasing of closed mortgage loans on the secondary market. In addition, commercial mortgage lending and brokering are also not regulated in Montana. Commercial mortgage transactions are subject to the usury as outlined in Section 31-1-107, MCA .
Questions?
Division of Banking and Financial Institutions
301 South Park, Suite 316, PO Box 200546, Helena, MT 59620
Phone: (406) 841-2920 Fax: (406) 841-2930
