The Commissioner of the Nevada Division of Mortgage Lending addressed the licensing obligations of wholesale lenders under the Nevada Mortgage Brokers and Mortgage Agents Act in an August 20, 2012, memorandum. The Commissioner takes the position that a wholesale lender that only provides a funding source for a licensed (or exempt) mortgage broker to fund and close a loan secured by real property in Nevada in the licensed (or exempt) broker’s name is exempt from licensure requirements.
In order for the exemption to apply, the loan must be funded and closed in the licensed or exempt broker’s name as the lender of record. Accordingly, any wholesale lender that closes or funds a loan in its own name as the lender of record is required to be licensed. Note that this represents a change in long-standing Division policy.
The Commissioner also takes the position that a wholesale lender that buys a loan secured by Nevada real property from a mortgage broker after closing must be licensed since it is holding itself out as “being able to buy or sell notes secured by liens on real property.” As a result of this clarification, wholesale lenders that now must be licensed have until October 1, 2012, to apply for a license. If they fail to apply for licensure by December 31, 2012, and continue to conduct wholesale lender activity after that date, they will be subject to administrative disciplinary action.