Mortgage FAQ for Consumers

Who should I contact if the Arkansas Securities Department does not regulate my mortgage company?

 "Helpful  Links" .  These links will assist you in determining who regulates your mortgage company.

I think that my mortgage company may be exempt from the Fair Mortgage Lending Act, how do I make sure?

The  Fair Mortgage Lending Act ,"Ark. Code Ann. § 23-39-502(9)(B) "refers to exemptions.

What laws generally govern mortgage activity regulated by the Arkansas Securities Department?

The Fair Mortgage Lending Act found at "Ark. Code Ann. § 23-59-501 " .

Where may I obtain a copy of the relevant statutes and rules?

 The "Legal"  section of the website has these documents available electronically .

My lender has raised my payments even though I have a fixed rate mortgage.  Can the lender do that?

Your original loan note determines the circumstances under which your lender can make changes to your payment.  Many times the change in payment amount comes from the escrow of your yearly homeowner's insurance premium or property tax , not the interest rate. Check with your servicer to determine the specific reason for the increase.

I have received notice that my homeowner's insurance was not paid this year, but my mortgage company pays it from my escrow account.  Do I need to do anything?

Yes.  Even though your mortgage company is responsible for paying the insurance premium, the homeowner is ultimately responsible for making sure that you have homeowner's insurance.  You should contact your insurance company immediately regarding this situation and the lender of your loan.  If your insurance gets cancelled or your policy expires, your lender can purchase insurance on the property on your behalf.  This is called "Forced-Placed Insurance" and the premiums are usually much higher than what you would normally pay. 

How do I know if the interest rate on my mortgage is too high?  From what I understand, there is no rate limit imposed by Arkansas statute.

The Arkansas Securities Department does not attempt to regulate the interest rates charged on loans unless a court finds that the loan is usurious or it appears that the rate charged on the loan violates either federal or state law or rule.  See Ark. Code Ann §§ 23-39-514(a)(2)(G) and 23-39-513(11).  The Department suggests that you contact office of the Arkansas Attorney General or a private attorney for more information on usury provisions.

I want to refinance my loan; however, I was told that the Fair Mortgage Lending Act specifies that a lender cannot refinance a loan that has not yet been seasoned for 12 months unless tangible net benefits to the borrower can be demonstrated.  How can I find out what those benefits are?

There are no definite tests as to what constitutes a tangible net benefit due to the fact-intensive nature of the inquiry and the numberous variables that may be involved. 

What is PMI?

PMI stands for Purchase Money Insurance.  PMI is usually required when you purchase a loan with less than a 20% down payment.  This is a type of guarantee that helps protect lenders against the costs of foreclosure.  In effect, mortgage insurance pays the lender a certain percentage of your original purchase price to cover a lender's loss in the unfortunate event of foreclosure.

What relevant documents are needed when filing a complaint?

"How to File a Complaint" refers that financial documents are important to the investigation of your complaint.  Please provide any legible copies of documents that support your claim.  Especially important are any documents that relate to any disclosure or written statements you may have received.  Please only send copies.  If the originals are needed, the Department will specifically request these from you.

What information should I include in my complaint?

"How to File A Complaint". You should provide any clarifying facts.  The who, what, when, where, why, and how of the transaction occurred.   The most important information is the DATES. 

What is a right of rescission and when does it apply?

Notice of the Right of Rescission (sometimes called, the right to cancel) which states the applicant has the right to cancel the transaction, how to cancel, the effects of canceling, and the date the right to cancel expires.  The transaction must be exercised within three business days of the closing of the loan. Notice of cancellation may be given by mail, telegram, or other written communications.

What functions does your Department perform with respect to the mortgage industry?

The Arkansas Securities Department works to insure that the citizens of Arkansas have access to well-managed and properly operated mortgage providers.  The Department supervises those who are licensed  to conduct business in the residential mortgage industry in Arkansas. Mortgage Brokers, Mortgage Bankers, Mortgage Servicers as well as Loan Officers must apply to the Department and meet certain licensing standards before they legally offer their services to the public.  The Securities Department has the authority to levy monetary and civil sanctions against a person or company if they are operating in Arkansas without being properly licensed.  The Department conducts compliance exams on the licensee's operations to monitor operating standards with the Arkansas Fair Mortgage Lending Act.  The Department  investigates complaints and alleged violations brought by consumers.

How do I file a complaint with the Arkansas Securities Department?

"How to File A Complaint" give you the information on filing your complaint.

Can you find an attorney to represent me?

No.  Arkansas Securities Department cannot recommend individual attorneys.  You should talk with your friends and family or contact the Arkansas Bar Association.

Where may I obtain a copy of the relevant statutes and rules?

The "Legal"  section of the Department's website contains the relevant statutes and rules.

 I think that I am exempt from the Fair Mortgage Lending Act. How do I make sure?

The "Fair Mortgage Lending Act" , Ark. Code Ann. § 23-39-502(9)(B), refers to exemptions.

What are the types of licenses are required in Arkansas?

The "Fair Mortgage Lending Act ", Ark. Code Ann. § 23-39-502(10)(11(14)(15)(17) and Ark. Code Ann. § 23-39-503 contain the definitions and license requirements.  The types of licenses available in Arkansas include Mortgage Broker, Mortgage Banker, Mortgage Servicer, and Mortgage Loan Officer.

What financial statements do I need to submit?

The "Fair Mortgage Lending Act ", Ark. Code Ann. § 23-39-505(g), requires audited financial statements for Mortgage Banker, and Mortgage Servicer.  Pursuant to Rule 5005-2(b), a mortgage broker shall provide financial statements reflecting the financial conditions of the applicant.  The financial statements must be submitted through NMLS.

What are the Mortgage Broker,Mortgage Banker, and Mortgage Servicer license fee(s)?

Initial licensing fee is $750 for a Mortgage Broker, Mortgage Banker, and Mortgage Servicer plus $100 for each branch location to be licensed.  Annual licensing fees are $350 for the main office and $100 for each branch location, as long as the renewal application is submitted in a timely manner.  NMLS will assess additional fees for using the NMLS system.

I have a license for my main office.  How do I register a branch office?

To apply for an branch office location, submit the MU3 forms and fees through NMLS.

Am I required to have a physical office in Arkansas?

No, Arkansas is not a "brick and mortar" state. 

Am I required to pay my employee by W-2 or 1099?

No, the "Fair Mortgage Lending Act", Ark. Code Ann. § 23-39-502(8), does not regulate how you compensate your employee as long as you comply with the federal income tax law.

Do I need to be employed with a mortgage company to become licensed as a loan officer?

Yes, you must be affiliated with a Mortgage Broker, Mortgage Banker, Mortgage Servicer before you can become licensed with the Department.

How do I get my Loan Officer's license?

The "Fair Mortgage Lending Act", Ark. Code Ann. § 23-39-502(11), defines Loan Officer.  Ark. Code Ann. § 23-39-505 states the Qualifications for licensure - Issuance.  All applications for licensure should be submitted throught NMLS.

I have completed an application and submitted it to the NMLS to obtain a license in Arkansas.  How long will it take to become licensed?

Assuming that all information is contained in the application and no additional information is needed, the Department will complete the review of your application within 30 days of receipt.

I need to renew my Loan Officer license.  What process do I need to complete for my renewal?

The "Fair Mortgage Lending Act", Ark. Code Ann. § 23-39-506 defines the  renewal process.  Ark. Code Ann. § 23-39-507 defines the Continuing education requirements.  Renewals must be processed through the NMLS system.

My Loan Officer license has expired.  What are my options?

The "Rules Of The Fair Mortgage Lending Act", Rule 5006-1(d) and  "Fair Mortgage Lending Act", Ark. Code Ann. § 23-39-506 defines the process for license renewal  and penalties for late renewal.  The appropriate form and fees must be submitted to the NMLS in order to obtain a license.

Can I originate loans while my application is "pending-incomplete" and pending-review" status?

No, the "Fair Mortgage Lending Act", Ark. Code Ann. § 23-39-503(f) states that  you are required to be approved and licensed before conducting any mortgage loan activity in the State.  Unlicensed loan origination activity may be subject to disciplinary action.

Can I do one loan as an exception without having a license?

No, the "Fair Mortgage Lending Act", Ark. Code Ann. § 23-39-503 states that it is unlawful for any person other than an exempt person to act or attempt to act as a mortgage broker, mortgage banker, mortgage servicer, or loan officer in Arkansas without first obtaining a license under this Act.   Unlicensed loan origination activity may be subject to disciplinary action.

Can I originate loans for more than one company?

No, the "Fair Mortgage Lending Act", Ark. Code Ann. § 23-39-503(d)(4) states that a Loan Officer shall not be employed simultaneously by more than one (1) mortgage broker or mortgage banker licensed under this Act.

What if I change employers, can my license be transferred?

No, the "Fair Mortgage Lending Act", Ark. Code Ann. § 23-39-505(k) states that licenses issued under this Act are not transferable.

I have a felony conviction.  Will the conviction prevent me from getting a license?

Yes, Ark. Code Ann. Section 23-39-505(o) provides that the commissioner shall find that the applicant has not been found guilty of  or pleaded guilty or nolo contendere to any felony before issuing a loan officer license.

Does Arkansas require any educational requirements or testing to become licensed?

"Fair Mortgage Lending Act", Ark. Code Ann. § 23-39-505(b)(2).  A high school diploma or a GED is required.  Pursuant "Rules Of The Fair Mortgage Lending Act" Rule 5005-5, a person applying to be licensed as a loan officer shall complete at least 20 hours of education, which shall include:

1.  3 hours of federal law and regulations;

2.  3 hours of ethics, which shall include instruction on fraud, consumer protection, and fair lending issuers; and

3.  2 hours of training related to lending standards for the nontraditional mortgage product marketplace.

Pursuant to Rule 5005-6, a person applying to be licensed as a loan officer shall pass a qualified written national test developed by NMLS and a qualified written state test developed by the Commissioner.  Both the national test and the state test shall be administered by a test provider approved by NMLS.

Is there a continuing education requirement?

Under the "Fair Mortgage Lending Act", Ark. Code Ann. § 23-39-507 and pursuant to the "Rules of the Fair Mortgage Lending Act", Rule 5007-1, a licensed loan officer shall complete at least 8 hours of education each calendar year. The "Education" page of the NMLS&R website provides a list of approved providers.

How do I locate a continuing education class?

The "Education" page of the NMLS website provides a list of approved providers.

What happens if I do not get the required 8 hours of Continuing Education by December 31st?

Pursuant to the "Rules of the Fair Mortgage Lending Act", Rule 5007-1(k), upon written request and receipt of an extension fee of $50, the Commissioner may allow an extension of up to 30 days beyond December 31 of the present calendar year in order to allow a loan officer to obtain continuing education hours and meet the requirements of these Rules.

I have over 8 hours of Continuing Education hours.  Will I lose those extra hours?

Pursuant to the "Rules Of The Fair Mortgage Lending Act", Rule 5007-1(f), a licensed loan officer may only receive credit for a continuing education course in the year in which the course is taken.

What is the disciplinary authority of the Arkansas Securities Department?

"Fair Mortgage Lending Act", Ark. Code Ann. § 23-39-514.  The Department has the authority to deny, suspend, revoke, or refuse to issue or renew a license of a licensee or applicant.


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