North Dakota Revises Licensing for Lenders; Adds Licensing Requirement for Servicers

North Dakota has revised its licensing laws to change the license type required for residential mortgage lenders and has added a licensing requirement for residential mortgage servicers.

Residential mortgage lenders will no longer be licensed under the North Dakota Money Brokers Act but will instead be required to hold a Residential Mortgage Lender License. The new law also added a limitation on late charges for loans of $50,000 or less.

In addition, North Dakota created a licensing requirement for mortgage loan servicers. Until recently, North Dakota was one of only a handful of states that did not require residential mortgage loan servicers to obtain a license. The law will require not only servicers and subservicers to be licensed, but also holders of mortgage servicing rights as well as mortgage servicing rights investors.

The Department of Financial Institutions will issue and regulate both Residential Mortgage Lender Licenses and Residential Mortgage Servicer Licenses. Residential mortgage lenders with an active North Dakota Money Broker license will have until December 31, 2023 to transition to the new Residential Mortgage Lender license in NMLS while servicers were required to be licensed beginning August 1, 2023.

To read the residential mortgage lender licensing bill in its entirety, please visit ND Senate Bill 2090.

To read the residential mortgage lender servicing bill in its entirety, please visit ND House Bill 1068.