July 31, 2009 - Secure and Fair Enforcement (SAFE) Mortgage Licensing Act

Policy Name: Secure and Fair Enforcement (SAFE) Mortgage Licensing Act

Date: July 31, 2009 (signed and effective)

Code Location: Session Law 2009-374, House Bill 1523


Enacted to ensure compliance with the federal Home Economic Recovery Act of 2008 (HERA), the Secure and Fair Enforcement (SAFE) Mortgage Licensing Act sought to protect homeowners by strengthening the existing North Carolina regulations on the mortgage lending industry. The SAFE Act repealed and replaced the North Carolina MLA passed in 2001, but kept many of the MLA’s protections intact.

The SAFE Act amended Chapter 53 to add Article 19B, which included many protections for homeowners. Article 19B requires individuals who engage in mortgage businesses to be licensed by the North Carolina Commissioner of Banks, and the law provides the Commissioner of Banks the authority to conduct national background checks on applicants before granting such licenses. The SAFE Act also requires the Commissioner of Banks to participate in the National Mortgage Licensing System and Registry, a nationwide repository of licensures of individuals and companies in the mortgage industry. The law also imposes duties on mortgage businesses, such as reporting fees and servicing cost schedules to the Commissioner of Banks.

The SAFE Act expanded the power of the Commissioner of Banks by granting the office the ability to “adopt any rules that the Commissioner deems necessary … to provide for the protection of the borrowing public.” Since the law’s enactment, the Commissioner of Banks has relied on the SAFE Act to perform audits on licensed individuals and companies to ensure compliance with North Carolina General Statutes.