Additional Author: Brenda Robinson
In our April 2023 Licensing Link, we noted that, effective August 1, 2023, North Dakota will require companies servicing residential mortgage loans to obtain a residential mortgage loan servicer license (See North Dakota House Bill 1068). The new servicer license provisions will be located in North Dakota’s statutes under the Residential Mortgage Loan Servicers provisions at North Dakota Century Code §§ 13-13-01 et seq.
According to initial communications we have received from North Dakota regulators regarding the new servicer license requirement, the application for the Residential Mortgage Servicer License will be available through the NMLS on August 1, 2023. While the license application will not be available until August 1, 2023, we understand that the licensing checklist should be available via the NMLS in the next few weeks. This checklist may be used to assist applicants in compiling the required documentation for the application submission. Based on information we received from a regulator with the North Dakota Financial Institutions, please note the following:
- The application will be a stand-alone application, meaning entities currently holding a license in North Dakota to engage in residential mortgage lending activities that also service residential mortgage loans will need to submit a separate residential mortgage servicer license application through the NMLS;
- An entity that obtains a residential mortgage loan servicer license between August 1, 2023 and December 31, 2023 will not need to renew the license until the 2024 license renewal period, which most likely will begin in October 2024; and
- We expect that the North Dakota Department of Financial Institutions will likely delay any enforcement regarding the servicer licensing requirement until 2023 year-end, which would effectively mean that new applicants would be required to obtain the new licenses by December 31, 2023.
We will continue to provide updates on the new North Dakota servicer requirement in future issues.
Our April 2023 Licensing Link also summarized additional amendments to North Dakota law that, effective August 1, 2023, will require entities “engaged in residential mortgage lending” and not otherwise exempt to obtain a license under new provisions set forth in North Dakota Century Code §§ 13-12-01 et seq. (See North Dakota Senate Bill 2090). We continue to engage with North Dakota regulators to clarify their plans for implementing the residential mortgage lender licensing requirement and will provide an update in a future issue.