32-9-171. Mortgage servicer capital requirements. (1) The following definitions apply to this section:
(a) "Liquidity" means unrestricted cash and cash equivalents, investment grade securities that are available for sale or held for trade, and unused and available portion of committed servicing advance lines.
(b) "Operating reserves" are funds set aside in anticipation of future payments or obligations and are included in liquidity.
(c) "Tangible net worth" means total equity minus receivables due from affiliated entities, minus goodwill and other intangible assets, and minus the carrying value of pledged assets net of the associated liabilities of the pledged assets. Tangible net worth does not include money held in borrower escrow accounts.
(2) A mortgage servicer operating as an approved servicer by a government-sponsored enterprise shall maintain liquidity, operating reserves, and tangible net worth that meet the standards set by the government-sponsored enterprise. If approved by more than one government-sponsored enterprise, the mortgage servicer must meet the highest standard of the government-sponsored enterprises for which it is approved. The department may define by rule the list of government-sponsored enterprises.
(3) (a) A mortgage servicer with a portfolio of only nongovernment-sponsored enterprise loans shall maintain a minimum tangible net worth of $1 million or maintain a $1 million surety bond.
(b) A mortgage servicer with a portfolio of nongovernment-sponsored enterprise loans shall maintain liquidity, including operating reserves, of 0.00035 times the unpaid principal balance of the portfolio.
(4) A mortgage servicer with 25 or fewer loans, a mortgage servicer that is wholly owned and controlled by one or more depository institutions regulated by a state or federal banking agency, or a mortgage servicer that is also licensed as an escrow business may apply to the department to waive or adjust one or more of the capital requirements in subsections (2) and (3). In considering such a request, the department will consider whether the mortgage servicer has a positive net worth and adequate operating reserves.
(5) The continuous maintenance of the minimum liquidity, operating reserves, and tangible net worth required under this section is necessary for continued licensure under this part. Failure to meet or maintain these minimum standards may constitute grounds for denial of an application, issuance of a cease and desist order, license suspension, or license revocation.
History: En. Sec. 1, Ch. 65, L. 2019.
Structure Montana Code Annotated
Title 32. Financial Institutions
Chapter 9. Residential Mortgage Brokers, Lenders, Servicers, and Loan Originators
32-9-101. Short title and purpose
32-9-102. License requirement -- registration
32-9-104. Exemptions -- proof of exemption
32-9-106. Simultaneous licensure
32-9-107. Prelicensing education requirements for mortgage loan originators
32-9-109. Experience requirements
32-9-110. Examination requirements for mortgage loan originators
32-9-113. Control persons -- application for license -- renewal
32-9-116. Employment of mortgage loan originator
32-9-117. Fees -- disposition of fees -- rulemaking
32-9-118. Continuing education requirements for mortgage loan originators
32-9-122. Designated manager and branch office license requirements
32-9-123. Surety bond requirement -- notice of legal action
32-9-124. Prohibitions -- required disclosure
32-9-126. Revocation, suspension, conditioning, and reinstatement of licenses
32-9-128. Registration and registered agent of foreign entities -- service of process -- venue
32-9-129. Loan processors and underwriters
32-9-130. Department authority -- rulemaking
32-9-132. Injunctions -- receivers
32-9-133. Penalties -- restitution
32-9-134. License renewal -- rulemaking
32-9-135. Independent contractor entity -- responsible individual -- loan processor or underwriter
32-9-136. through 32-9-140 reserved
32-9-142. Cease and desist orders
32-9-143. and 32-9-144 reserved
32-9-146. and 32-9-147 reserved
32-9-148. Disclosure of mortgage costs by mortgage lender
32-9-149. Use of name -- advertising
32-9-151. Mortgage call reports
32-9-152. Electronic record as original document
32-9-153. and 32-9-154 reserved
32-9-155. Nationwide mortgage licensing system information challenge process
32-9-156. through 32-9-159 reserved
32-9-161. through 32-9-164 reserved
32-9-168. Mortgage lender prohibitions
32-9-169. Mortgage servicer prohibitions
32-9-170. Mortgage servicer duties