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Yes: 252 • No: 0
North CarolinaHB 7622025-2026 SessionHouseWALLET
AN ACT TO MODERNIZE THE NORTH CAROLINA SECURE AND FAIR ENFORCEMENT (S.A.F.E) MORTGAGE LICENSING ACT.
Sponsored By: Dean Arp (Republican), Neal Jackson (Republican), Stephen M. Ross (Republican), Mitchell S. Setzer (Republican)
Signed by Governor
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Bill Overview
Analyzed Economic Effects
28 provisions identified: 5 benefits, 9 costs, 14 mixed.
Stronger protections for mortgage borrowers
The law requires lenders, brokers, and servicers to keep your money in separate, federally insured escrow or trust accounts. Brokers must act in your interest, follow your lawful instructions, and disclose their total expected pay for each loan option at the first RESPA disclosures. Servicers must act in good faith with delinquent borrowers, and give at least 45 days’ notice before starting foreclosure. You may reinstate a loan no more than two times in 24 months. If your servicer force-placed insurance and you prove within 12 months there was no lapse, they must refund unearned premiums. Prepayment penalties are banned on loans of $150,000 or less and on rate‑spread home loans.
New fee cap on second mortgages
Beginning July 1, 2025, certain lenders making second or junior‑lien loans may charge up to 2% in aggregate fees. The 2% cap does not apply if total points and fees from all lenders are at or below the smaller of the federal amount in 12 C.F.R. § 1026.43(e)(3) or 3% of the total loan amount. This can change what you pay for some second‑lien loans.
Higher capital rules for mortgage firms
Mortgage lenders must keep at least $100,000 in net worth and show $1,000,000 in liquidity, documented by an unqualified audit. Mortgage servicers must keep at least $100,000 in net worth, not counting escrow funds, also shown in an unqualified audit. Mortgage brokers must keep $25,000 in net worth and show $10,000 in liquidity in a certified statement.
Higher bonds and strict upkeep for mortgage firms
The law sets surety bonds by North Carolina volume. Brokers need at least $75,000; lenders and servicers at least $150,000. If NC volume is $10 million–$49,999,999.99, brokers need $125,000 and lenders/servicers $250,000. At $50 million or more, brokers need $250,000 and lenders/servicers $500,000. You must file any higher bond by May 31 for the prior year’s volume. Each employed loan originator must be covered by an employer bond. If an action starts on a bond, you must replace it within 30 days; after any recovery, replace it right away. The Commissioner can waive the bond if you have a 3‑year clean record and net worth at least 4 times the bond and you agree to keep it and notify if it drops. The Commissioner can reinstate the bond at any time, and you must file it within 30 days or face summary suspension.
Ban unfair mortgage practices for borrowers
The Commissioner can ban acts by mortgage licensees that are unfair, deceptive, designed to evade State law, or not in borrowers’ best interest. This helps protect people taking out or paying a home loan.
Transparency and data security for mortgages
Mortgage originators must show their NMLS ID on forms, ads, and websites, and lenders and brokers must link to NMLS Consumer Access. Companies meet this law’s security rules by following the FTC Safeguards Rule and keeping a written security plan. Firms cannot file false reports and must fix errors within 30 days. They must keep business addresses current and report changes within 15 days. Lenders, brokers, servicers, and registrants must also file required condition reports with the Commissioner and NMLS.
Training, testing, and job limits for loan originators
To get licensed, a mortgage loan originator must complete at least 24 hours of prelicensing education, including 3 hours federal law, 3 hours ethics, 2 hours on nontraditional loans, and 4 hours on North Carolina rules. You must pass an NMLS test with a score of at least 75%. You cannot work for more than one licensed lender, broker, servicer, or origination support registrant at the same time. You also cannot reuse the same continuing education course in the same or the next year to renew your license.
Annual assessments based on mortgage volume
Licensees pay an annual assessment. It starts with $2,000 for up to $1.5 million in reported volume. You then pay extra using per‑thousand rates that get smaller at higher volumes. The Commissioner can collect yearly or in installments if approved, and can reduce assessments under G.S. 53C‑8‑2.
Stronger oversight for large mortgage servicers
A covered institution is a servicer with 2,000+ one‑to‑four‑unit loans serviced or subserviced for others, excluding whole loans owned and interim pre‑sale loans. These rules apply to covered institutions; they do not cover holding companies unless they qualify, and they exclude certain nonprofits and housing finance agencies. Covered servicers must keep capital and liquidity under GAAP and FHFA standards and tell the Commissioner within 15 days if they fall short or a waiver changes. They must keep written policies and liquidity plans. Beginning October 1, 2025, they must have board oversight, run internal audits sized to their risk, and get an annual independent external audit with financials, control testing, tangible net worth, MSR valuation checks, and insurance verification.
More loans covered by mortgage rules
The law expands what counts as a residential mortgage loan. It covers loans to people for personal or household use secured by a home in North Carolina, including reverse mortgages and contracts for deed. A ‘dwelling’ includes 1–4 unit homes, condos, co‑ops, manufactured or mobile homes, and trailers used as a residence. This brings more loans under state licensing and consumer‑protection rules.
New roles for support staff and brokers
The law creates a registration path for people who only process or underwrite loans, and defines those support roles under supervision. It clarifies who can register as a mortgage loan originator when employed by banks or Farm Credit institutions, and that NMLS assigns the unique ID. It defines an ‘exclusive mortgage broker’ who works for a single firm. A branch manager must be a licensed loan originator with at least three years of residential mortgage lending experience and be in charge of branch operations.
More work now counts as mortgage business
The law adds more tasks that count as doing mortgage business for pay, such as taking applications, negotiating terms, making loans, tablefunding, and servicing. Tablefunded loans must be assigned to the funder within one business day after funding. More companies count as mortgage servicers, including master servicers and those who service indirectly. It defines a loss mitigation specialist who can collect payments, change loan terms, or move to foreclosure when default is near. Any mortgage other than a 30‑year fixed rate is labeled a nontraditional mortgage product.
Mortgage offices and managers required
Branch offices must be open to the public, in a permanent building, and separate from the main office. Principal offices must be in a permanent building, allow private loan talks, and keep North Carolina loan records on site. Homes cannot be used as principal or branch offices. Lenders, brokers, servicers, and registrants must name a qualifying individual and keep a branch manager for each branch. You must file the designation in NMLS and tell the Commissioner within 15 days if it changes.
New registrant role and exclusive broker
Origination support companies must register before doing processing or underwriting for North Carolina loans. Registrants may sponsor licensed originators to supervise processors and underwriters but cannot do mortgage business themselves. The law creates an exclusive mortgage broker license for certain licensed originators. Exclusive brokers must act for only one supervising lender or broker, be paid without tying pay to loan terms, and may offer only fixed‑rate, fully amortizing loans with no prepayment penalty unless approved. They cannot handle borrower funds and must meet surety bond rules, or be covered by a supervising entity’s bond of up to $5 million (or the sum of bond amounts for supervised exclusive brokers, if lower).
Stricter licensing and checks for originators
The law requires a state license to originate loans on North Carolina homes and a valid NMLS ID. Applicants must have a U.S. principal office and apply through NMLS with contact and ID details. Applicants and control persons must give fingerprints, consent to criminal checks, and submit an independent credit report. You must respond to the Commissioner within 20 days or risk suspension or denial. North Carolina honors federal temporary authority to originate, and pardoned or expunged convictions do not count. Licenses can be denied for poor financial responsibility, such as current judgments, tax liens, a foreclosure in the past 3 years, or a pattern of serious delinquencies.
Tougher oversight and fines for mortgage firms
The Commissioner can examine books and records, interview staff and customers, subpoena documents, and take temporary control of records. Licensees must provide data and reports like Annual Reports, Servicer Activity Reports, fee schedules, financial statements, and quarterly origination reports. The Commissioner can hire outside experts, share information with other agencies, and rely on other exams and audits. These powers apply even if a person claims another license or tries to avoid the law; civil penalties can reach $25,000 per violation. The Commissioner can order repayment to borrowers for unlawful charges. People who surrender a license with consent can be barred from reapplying for a period the Commissioner sets. The law uses NMLS for licensing processes and makes public the NMLS employment history and adjudicated disciplinary records. The Commissioner keeps a public list of applicants and a roster of licensees, and exempt persons must file a claim‑of‑exemption form.
Shorter lookback for licensing misdemeanors
Applicants now disclose the listed misdemeanors from the last 5 years, not 10. This can help workers with older convictions qualify for a license.
New mortgage license types and roles
The law sets five licenses: broker, lender (which may also service on notice), servicer, exclusive broker (an individual for one lender), and loan originator. Each license has clear allowed activities.
Branch limits and qualified managers for lenders
Lenders and brokers may run branch offices only as the law allows, and branches must be in the United States. Each office must have a branch manager who meets experience rules. If you have no branches, the qualifying individual may serve as manager and must be a licensed originator to oversee origination. You must register each branch through NMLS and pay the branch manager’s credit report, criminal checks, and NMLS fees. You must also update branch manager changes within 15 days.
Employer reports and checks for originators
When a loan originator leaves, both the originator and employer must notify the Commissioner within 30 days. The employer must state the reason for termination. Employers must keep a current list of employed originators on file with the Commissioner. When required, individuals must consent to criminal history checks and give fingerprints; refusal can lead to denial of their renewal and, in some cases, the employer’s license.
Mortgage firms must keep and store records
Mortgage lenders, brokers, servicers, and registrants must keep required records and tell the Commissioner where they are stored. Keep records for three years unless the Commissioner sets a different time.
Mortgage license fees and renewal deadlines
Initial filing fees are $1,250 for brokers, lenders, and servicers; $300 for exclusive brokers; $125 for loan originators. Origination support registrants pay $250 (under 5 staff), $1,000 (5–30), or $2,000 (over 30). All applicants also pay actual costs for credit reports, criminal checks, and NMLS processing. Licenses expire each December 31 and can be renewed on or after November 1. To renew, you must still meet minimum standards, complete required education, and pay all fees and assessments. Renewal fees: originators pay $125 plus background/NMLS costs; origination support registrants pay $125/$500/$1,000 by headcount plus those costs. Late fees apply if you miss renewal: $250 for lenders/brokers/servicers, $100 for originators, and $62.50/$250/$500 for processing registrants. If you are not reinstated by March 1, you must meet initial issuance requirements again.
Licensing checks, privacy, and penalties
The Commissioner may use NMLS to handle background checks and share licensing information. The SBI may charge fees for criminal record checks. Licensing records filed with the Commissioner are confidential and not public records. For good cause, the Commissioner may accept equivalent information for certain control persons. Working in the mortgage business without a required license is a Class 3 misdemeanor, and each unlicensed deal is a separate offense.
Loan originator education rules and credits
Loan originators must complete 8 hours of continuing education each year: 3 federal, 2 ethics, 2 nontraditional lending, and 1 State rules. The NMLS reviews and approves CE courses and providers. Approved instructors get 2 hours of CE credit for each hour taught. North Carolina accepts certain NMLS‑approved out‑of‑state CE toward NC requirements.
Simpler mortgage education and testing rules
NMLS approves prelicensing courses and providers. Employers may offer NMLS‑approved classes, and approved test providers may give exams at employer or licensed sites. North Carolina gives credit for NMLS‑approved courses from other states and for out‑of‑state licenses if last year’s continuing education is complete; NC‑specific hours still must be taken. This credit does not apply to a qualifying individual for a mortgage servicer. If you fail the test, you must wait at least 30 days between tries and 6 months after three failures. If your license has been expired for 5 years or more, you must retake the test. For late renewal, you must prove you finished last year’s continuing education.
Regulator data sharing and NMLS flexibility
The Commissioner may contract with the NMLS to collect fees and keep records and may adjust rules to enable NMLS use. The Commissioner must report enforcement actions to NMLS and can share supervisory data with other agencies under written confidentiality agreements. During emergencies, the Commissioner can temporarily waive or suspend compliance. The state may license its supervisory software to other states.
Stronger enforcement and clear appeal rights
The Commissioner can deny, suspend, revoke, or restrict licenses when it serves the public interest and certain problems exist. The Commissioner can issue summary cease‑and‑desist orders or suspend licenses quickly. Notices are served to the last address on file; you have 20 days to request a hearing, which must be set within 15 days. You can appeal the Commissioner’s actions to the Banking Commission with written notice within 20 days.
Who is exempt from mortgage licensing
The law updates who is exempt, including some seller‑financed deals (for example, no more than three in a year for sellers, and one for an estate or trust), certain nonprofits, and government agencies. Some exempt groups must file a notice with the Commissioner. State or federal credit unions can claim an exemption by notifying the Credit Union Division. These changes lower burdens for some organizations but narrow formal oversight for a small slice of loans.
Sponsors & Cosponsors
Sponsors
Dean Arp
Republican • House
Neal Jackson
Republican • House
Stephen M. Ross
Republican • House
Mitchell S. Setzer
Republican • House
Cosponsors
Jerry "Alan" Branson
Republican • House
Ben T. Moss, Jr.
Republican • House
Paul Scott
Republican • House
Shelly Willingham
Democratic • House
Roll Call Votes
House vote • 6/24/2025
HB 762: Modernize NC Secure and Fair Enforcement (S.A.F.E.) Act/Second Mortgage Fe
Yes: 112 • No: 0 • Other: 8
Senate vote • 6/19/2025
HB 762: Modernize NC S.A.F.E. Act/2d Mortgage Fee Act.
Yes: 41 • No: 0 • Other: 9
House vote • 4/30/2025
HB 762: Modernize NC Secure and Fair Enforcement (S.A.F.E.) Act.
Yes: 99 • No: 0 • Other: 13
Actions Timeline
Ch. SL 2025-43
7/1/2025HouseSigned by Gov. 7/1/2025
7/1/2025HousePres. To Gov. 6/26/2025
6/26/2025HouseRatified
6/25/2025HouseOrdered Enrolled
6/24/2025HouseConcurred In S Com Sub
6/24/2025HousePlaced On Cal For 06/24/2025
6/23/2025HouseCal Pursuant 36(b)
6/19/2025HouseSpecial Message Received For Concurrence in S Com Sub
6/19/2025HouseSpecial Message Sent To House
6/19/2025SenatePassed 3rd Reading
6/19/2025SenatePassed 2nd Reading
6/19/2025SenateReptd Fav
6/18/2025SenateRe-ref Com On Rules and Operations of the Senate
6/17/2025SenateReptd Fav
6/17/2025SenateRe-ref Com On Finance
6/10/2025SenateCom Substitute Adopted
6/10/2025SenateReptd Fav Com Substitute
6/10/2025SenateRe-ref to Commerce and Insurance. If fav, re-ref to Finance. If fav, re-ref to Rules and Operations of the Senate
6/10/2025SenateWithdrawn From Com
6/10/2025SenateRef To Com On Rules and Operations of the Senate
5/1/2025SenatePassed 1st Reading
5/1/2025SenateRegular Message Received From House
5/1/2025SenateRegular Message Sent To Senate
5/1/2025HousePassed 3rd Reading
4/30/2025House
Bill Text
Edition 1
Edition 2
Edition 3
Edition 4
Filed
Latest Edition
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