Previously, mortgage professionals, such as brokers or lenders, were required to become licensed and were subject to guidelines established by the Nevada Mortgage Lending and Related Professions Act. However, Nevada mortgage servicers were not subject to these licensing requirements until recently, when the Nevada Division of Mortgage Lending amended the Act in order to more closely supervise mortgage servicers by requiring them to become licensed, which includes obtaining a surety bond.
Who are Nevada Mortgage Servicers?
Because there are multiple mortgage professionals, it can become to difficult to differentiate between them. For example, a mortgage broker refers to someone who works with the the borrower and lender to help negotiate a mortgage, whereas a mortgage lender, as the name implies, originates the loan.
A person is considered to be a mortgage servicer if they conduct either of the following activities, as established by the NV Mortgage Servicer License New Application Checklist:
- directly services a mortgage loan secured by real property located in Nevada
- responsible for interacting with a borrower or managing a Nevada mortgage loan account on a daily basis (e.g., collecting and crediting periodic loan payments, managing any escrow account), or enforcing the note and security instrument
Surety Bond Requirement
As of January 1, 2016, the licensing process for all Nevada mortgage servicers requires them to provide the Commissioner of Mortgage Lending with a surety bond made out to the state of Nevada to protect against damages resulting from a violation of any provisions of Chapter 645F of NRS. The amount of the bond—to be determined by the commissioner—varies and is based on the annual mortgage loan servicing volume:
- Less than $50,000 = $100,000
- $50,000 – $499,999 = $200,000
- $500,000+ = $300,000
The bond may be canceled by the surety by giving the commissioner at least 60 days’ advance notice by certified mail, at which point the commissioner will notify the principal of their cancellation date. When the surety opts to cancel the bond, the principal’s license will be suspended immediately. If the principal fails to obtain a new surety bond by the proposed date of cancellation, their license will be revoked pursuant to Nevada Mortgage Servicer Regulations and the requirements of chapter 233B of NRS.