EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).

1-1 Section 1. Chapter 627 of NRS is hereby amended by adding thereto a new section to read as 1-2 follows:

1-3 1. A person may not conduct business as or hold a controlling interest or position in a 1-4 construction control if the person or a relative of the person is licensed as, conducts business as or 1-5 holds a controlling interest or position in:

1-6 (a) A mortgage company or mortgage agent that is subject to the provisions of chapter 645B of 1-7 NRS; or

2-1 (b) Any other legal entity, regardless of its purpose, if the legal entity holds a controlling interest 2-2 or position in a mortgage company or mortgage agent that is subject to the provisions of chapter 2-3 645B of NRS.

2-4 2. For the purposes of this section, a person shall be deemed to hold a controlling interest or 2-5 position if the person:

2-6 (a) Owns or controls a majority of the voting stock or holds any other controlling interest, directly 2-7 or indirectly, that gives him the power to direct management or determine policy; or

2-8 (b) Is a partner, officer, director or trustee.

2-9 3. As used in this section, "relative" means a spouse or any other person who is related within 2-10 the second degree by blood or marriage.

2-11 Sec. 2. NRS 627.180 is hereby amended to read as follows:

2-12 627.180 1. Except for savings and loan associations, state banks and national banking 2-13 associations, licensed to do business in the State of Nevada, under the laws of the State of Nevada or 2-14 under the laws of the United States, title insurers or underwritten title insurance companies authorized 2-15 to do business in the State of Nevada, or lenders of construction loan money for dwelling units who 2-16 are approved by the Federal Housing Administration or Department of Veterans Affairs and who have 2-17 been licensed and authorized to do business in the State of Nevada, every construction control , 2-18 before doing business in the State of Nevada , shall [, within 30 days immediately following July 1, 2-19 1965,] file with the state contractors’ board a bond, executed by some corporation authorized to issue 2-20 surety bonds in this state, in [a penal sum equal to 1 1/4 times] the amount of [capital in the business 2-21 but in no event less than $20,000, and such] $250,000. The bond must be kept in full force and effect or 2-22 replaced by a like bond as a condition to continuing to do business as a construction control in the 2-23 State of Nevada.

2-28 That I, ................................, having a principal place of business in ...................................................., 2-29 Nevada, as principal, and ................................, a corporation licensed to execute surety bonds under 2-30 the provisions of the Nevada Insurance Code, as surety, are held and firmly bound to the State of 2-31 Nevada, for the use of any person by whom funds are entrusted to the principal or to whom funds are 2-32 payable by the principal, in the sum of ................ Dollars, lawful money of the United States of 2-33 America, to be paid to the State of Nevada, for which payment well and

3-1 truly to be made we bind ourselves, our heirs, executors and successors, jointly and severally, firmly 3-2 by these presents:

3-3 The Condition of the Above Obligation Is Such That:

3-4 Whereas, Under the Construction Control Law, certain duties,

3-5 obligations and requirements are imposed upon all persons, copartnerships,

3-6 associations or corporations acting as construction controls;

3-7 Now, Therefore, If the principal and its agents and employees shall

3-8 faithfully and in all respects conduct business as a construction control in

3-9 accordance with the provisions of the Construction Control Law, this

3-10 obligation shall be void, otherwise to remain in full force and effect;

3-11 Provided, However, That the surety or sureties may cancel this bond

3-12 and be relieved of further liability hereunder by delivering 30 days’ written

3-13 notice of cancellation to the principal; however, such cancellation shall not

3-14 affect any liability incurred or accrued hereunder prior to the termination

3-15 of such 30-day period;

3-16 Provided Further, That the total aggregate liability of the surety or

3-17 sureties herein for all claims which may arise under this bond shall be

3-18 limited to the payment of ................ Dollars.

3-19 In Witness Whereof, The principal and surety have hereunto set their

3-20 hands this ................................ day of ................................, 19.....

3-21

3-22 By

3-23 Principal

3-24 (Surety)

3-25 By

3-26 Attorney

3-27 Sec. 3. NRS 627.210 is hereby amended to read as follows:

3-28 627.210 The [following shall not be a construction control or subject

3-41 than a mortgage company that is subject to the provisions of chapter

4-1 645B of NRS, if he disburses the [funds] money directly to a contractor

4-2 authorized by the borrower to do the work, or disburses the [funds] money

4-3 directly to the owner of the premises.

4-4 5. A lender of construction loan [moneys,] money, to an owner of a

4-5 residential property or to an owner of not more than four units if the loan is

4-6 made to repair or improve such property and the construction costs are

4-7 $10,000 or less, or 35 percent of the appraised value of the improvements

4-8 and repairs, whichever is greater.

4-9 Sec. 4. Chapter 645A of NRS is hereby amended by adding thereto a

4-10 new section to read as follows:

4-11 1. A person may not be licensed as, conduct business as or hold a

4-12 controlling interest or position in an escrow agency or escrow agent if the

4-13 person or a relative of the person is licensed as, conducts business as or

4-14 holds a controlling interest or position in:

4-15 (a) A mortgage company or mortgage agent that is subject to the

4-16 provisions of chapter 645B of NRS; or

4-17 (b) Any other legal entity, regardless of its purpose, if the legal entity

4-18 holds a controlling interest or position in a mortgage company or

4-19 mortgage agent that is subject to the provisions of chapter 645B of NRS.

4-20 2. For the purposes of this section, a person shall be deemed to hold

4-21 a controlling interest or position if the person:

4-22 (a) Owns or controls a majority of the voting stock or holds any other

4-23 controlling interest, directly or indirectly, that gives him the power to

4-24 direct management or determine policy; or

4-25 (b) Is a partner, officer, director or trustee.

4-26 3. As used in this section, "relative" means a spouse or any other

4-27 person who is related within the second degree by blood or marriage.

4-28 Sec. 5. NRS 645A.020 is hereby amended to read as follows:

4-29 645A.020 1. A person who wishes to be licensed as an escrow agent

4-43 (g) Indicate the general plan and character of the business.

5-1 (h) State the length of time the applicant has been engaged in the

5-2 escrow business.

5-3 (i) Require a financial statement of the applicant.

5-4 (j) Require such other information as the commissioner determines

5-5 necessary.

5-6 (k) If for an escrow agency, designate a natural person to receive

5-7 service of process in this state for the agency.

5-8 3. [If] Except as otherwise provided by specific statute, if the

5-9 commissioner determines, after investigation, that the experience,

5-10 character, financial condition, business reputation and general fitness of the

5-11 applicant are such as to command the confidence of the public and to

5-12 warrant the belief that the business conducted will protect and safeguard

5-13 the public, he shall issue a license to the applicant as an escrow agent or

5-14 agency.

5-15 4. The commissioner may waive the investigation required by

5-16 subsection 3 if the applicant submits with his application satisfactory proof

5-17 that he, in good standing, currently holds a license, or held a license, within

5-18 1 year before the date he submits his application, which was issued

5-19 pursuant to the provisions of NRS 692A.103.

5-20 5. An escrow agent or agency shall immediately notify the division of

5-21 any material change in the information contained in the application.

5-22 6. A person may not be licensed as an escrow agent or agency or be a

5-23 principal officer, director or trustee of an escrow agency if he is the holder

5-24 of an active license issued pursuant to chapter 645 of NRS.

5-25 Sec. 6. NRS 645A.030 is hereby amended to read as follows:

5-26 645A.030 1. Except as otherwise authorized by NRS 645A.031, at

5-42 of a violation of any of the provisions of chapter 645A of NRS, in the sum

6-1 of ............, lawful money of the United States, to be paid to the State of

6-2 Nevada for such use and benefit, for which payment well and truly to be

6-3 made, we bind ourselves, our heirs, executors, administrators, successors

6-4 and assigns, jointly and severally, firmly by these presents.

6-5 The condition of that obligation is such that: Whereas, the principal has

6-6 made an application to the commissioner of financial institutions of the

6-7 department of business and industry of the State of Nevada for a license as

6-8 an escrow agent or agency and is required to furnish a bond in the amount

6-9 of [$50,000] $250,000 conditioned as set forth in this bond:

6-10 Now, therefore, if the principal, his agents and employees, strictly,

6-11 honestly and faithfully comply with the provisions of chapter 645A of

6-12 NRS, and pay all damages suffered by any person because of a violation of

6-13 any of the provisions of chapter 645A of NRS, or by reason of any fraud,

6-14 dishonesty, misrepresentation or concealment of material facts growing out

6-15 of any transaction governed by the provisions of chapter 645A of NRS,

6-16 then this obligation is void; otherwise it remains in full force.

6-17 This bond becomes effective on the .......... day of ................, 19......, and

6-18 remains in force until the surety is released from liability by the

6-19 commissioner of financial institutions or until this bond is canceled by the

6-20 surety. The surety may cancel this bond and be relieved of further liability

6-21 hereunder by giving 60 days’ written notice to the principal and to the

6-22 commissioner of financial institutions of the department of business and

6-23 industry of the State of Nevada.

6-24 In Witness Whereof, the seal and signature of the principal hereto is

6-25 affixed, and the corporate seal and the name of the surety hereto is affixed

6-26 and attested by its authorized officers at ........................, Nevada, this

6-27 ................ day of ................, 19......

6-28 (Seal)

6-29 Principal

6-30 (Seal)

6-31 Surety

6-32 By

6-33 Attorney in fact

6-34

6-35 Licensed resident agent

6-36 Sec. 7. NRS 645A.037 is hereby amended to read as follows:

6-37 645A.037 [1. Except as otherwise provided in subsection 2, no

6-40 business in which any other business is solicited or engaged in, except a

7-1 notary public, or in association or conjunction with any other business,

7-2 unless authority to do so is given by the commissioner.

7-3 [2. A licensee may conduct the business of administering escrows

7-4 pursuant to this chapter in the same office or place of business as a

7-5 mortgage company if:

7-6 (a) The licensee and the mortgage company:

7-7 (1) Operate as separate legal entities;

7-8 (2) Maintain separate accounts, books and records;

7-9 (3) Are subsidiaries of the same parent corporation; and

7-10 (4) Maintain separate licenses; and

7-11 (b) The mortgage company is licensed by this state and does not receive

7-12 money to acquire or repay loans or maintain trust accounts as provided by

7-13 NRS 645B.175.]

7-14 Sec. 8. Chapter 645B of NRS is hereby amended by adding thereto

7-15 the provisions set forth as sections 9 to 25, inclusive, of this act.

7-16 Sec. 9. 1. A person may not be licensed as, conduct business as or

7-17 hold a controlling interest or position in a mortgage company or

7-18 mortgage agent if the person or a relative of the person is licensed as,

7-19 conducts business as or holds a controlling interest or position in:

7-20 (a) A construction control, as defined in NRS 627.050;

7-21 (b) An escrow agency or escrow agent, as defined in NRS 645A.010;

7-22 (c) An escrow officer, title agent or title insurer, as defined in NRS

7-23 692A.028, 692A.060 and 692A.070; or

7-24 (d) Any other legal entity, regardless of its purpose, if the legal entity

7-25 holds a controlling interest or position in a legal entity described in

7-26 paragraph (a), (b) or (c).

7-27 2. For the purposes of this section, a person shall be deemed to hold

7-28 a controlling interest or position if the person:

7-29 (a) Owns or controls a majority of the voting stock or holds any other

7-30 controlling interest, directly or indirectly, that gives him the power to

7-31 direct management or determine policy; or

7-32 (b) Is a partner, officer, director or trustee.

7-33 3. As used in this section, "relative" means a spouse or any other

7-34 person who is related within the second degree by blood or marriage.

7-35 Sec. 10. Except as otherwise provided in this chapter:

7-36 1. A person who claims an exemption from the provisions of this

7-37 chapter pursuant to NRS 645B.015 must file a written application for a

7-38 certificate of exemption with the office of the commissioner and pay the

7-39 fee required pursuant to NRS 645B.050.

7-40 2. An application for a certificate of exemption must include

7-41 sufficient evidence to establish that the person meets the requirements of

7-42 at least one exemption set forth in the provisions of NRS 645B.015.

8-1 3. The commissioner shall issue a certificate of exemption to a

8-2 person who:

8-3 (a) Meets the requirements of at least one exemption set forth in the

8-4 provisions of NRS 645B.015; and

8-5 (b) Complies with the provisions of this section and NRS 645B.050.

8-6 4. A certificate of exemption expires automatically if, at any time, the

8-7 person who claims the exemption no longer meets the requirements of at

8-8 least one exemption set forth in the provisions of NRS 645B.015.

8-9 5. If a certificate of exemption expires automatically pursuant to this

8-10 section, the person shall not provide any services of a mortgage company

8-11 or mortgage agent or otherwise engage in, carry on or hold himself out

8-12 as engaging in or carrying on the business of a mortgage company or

8-13 mortgage agent, unless the person applies for and is issued:

8-14 (a) A license as a mortgage company or mortgage agent pursuant to

8-15 this chapter; or

8-16 (b) Another certificate of exemption.

8-17 6. The commissioner may impose upon a person who is required to

8-18 apply for a certificate of exemption or who holds a certificate of

8-19 exemption an administrative fine of not more than $10,000 for each

8-20 violation that he commits, if the person:

8-21 (a) Has knowingly made or caused to be made to the commissioner

8-22 any false representation of material fact;

8-23 (b) Has suppressed or withheld from the commissioner any

8-24 information which the person possesses and which, if submitted by him,

8-25 would have rendered the person ineligible to hold a certificate of

8-26 exemption; or

8-27 (c) Has violated any provision of this chapter, a regulation adopted

8-28 pursuant to this chapter or an order of the commissioner that applies to a

8-29 person who is required to apply for a certificate of exemption or who

8-30 holds a certificate of exemption.

8-31 Sec. 11. 1. Except as otherwise provided in this section, if a

8-32 mortgage company:

8-33 (a) Is required to maintain any accounts described in NRS 645B.175,

8-34 the mortgage company and its mortgage agents shall not engage in any

8-35 activity that is authorized pursuant to this chapter, unless the mortgage

8-36 company maintains continuously a net worth of at least $250,000.

8-37 (b) Is not required to maintain any accounts described in NRS

8-38 645B.175, the mortgage company and its mortgage agents shall not

8-39 engage in any activity that is authorized pursuant to this chapter, unless

8-40 the mortgage company maintains continuously:

8-41 (1) Beginning on October 1, 1999, through September 30, 2000,

8-42 inclusive, a net worth of at least $25,000;

9-1 (2) Beginning on October 1, 2000, through September 30, 2001,

9-2 inclusive, a net worth of at least $50,000;

9-3 (3) Beginning on October 1, 2001, through September 30, 2002,

9-4 inclusive, a net worth of at least $75,000; and

9-5 (4) On or after October 1, 2002, a net worth of at least $100,000.

9-6 2. If a mortgage company cannot maintain continuously the net

9-7 worth required pursuant to subsection 1, the commissioner may allow the

9-8 mortgage company and its mortgage agents to engage in activities that

9-9 are authorized pursuant to this chapter, if the mortgage company

9-10 remedies the deficiency in its net worth by depositing with the

9-11 commissioner cash, a corporate surety bond or an irrevocable letter of

9-12 credit, or any combination thereof, in an aggregate amount that is equal

9-13 to or exceeds the deficiency in the net worth of the mortgage company.

9-14 3. If requested by the commissioner, a mortgage company and its

9-15 mortgage agents shall submit to the commissioner or allow the

9-16 commissioner to examine any documentation or other evidence that is

9-17 related to determining the net worth of the mortgage company.

9-18 4. The commissioner:

9-19 (a) Shall adopt regulations prescribing standards for determining the

9-20 net worth of a mortgage company; and

9-21 (b) May adopt any other regulations that are necessary to carry out

9-22 the provisions of this section.

9-23 Sec. 12. 1. If a mortgage agent terminates his association or

9-24 employment with a mortgage company for any reason, the mortgage

9-25 company shall, not later than the end of the next business day following

9-26 the date of termination:

9-27 (a) Deliver to the mortgage agent or send by certified mail to the last

9-28 known residence address of the mortgage agent a written statement

9-29 which advises him that his license is being delivered or mailed to the

9-30 division; and

9-31 (b) Deliver or send by certified mail to the division:

9-32 (1) The license of the mortgage agent;

9-33 (2) A written statement of the circumstances surrounding the

9-34 termination; and

9-35 (3) A copy of the written statement that the mortgage company

9-36 delivers or mails to the mortgage agent pursuant to paragraph (a).

9-37 2. A mortgage agent who terminates his association or employment

9-38 with a mortgage company shall not, on or after the date on which the

9-39 division receives his license from the mortgage company, engage in any

9-40 activity, directly or indirectly, for which a license as a mortgage agent is

9-41 required pursuant to this chapter, unless the mortgage agent is

10-1 specifically authorized by the commissioner to transfer his license to

10-2 another mortgage company or he otherwise obtains a new license

10-3 pursuant to this chapter.

10-4 Sec. 13. 1. Except as otherwise provided in this section, not later

10-5 than 60 days after the last day of each fiscal year for a mortgage

10-6 company, the mortgage company shall submit to the commissioner a

10-7 financial statement that:

10-8 (a) Is dated not earlier than the last day of the fiscal year; and

10-9 (b) Has been prepared from the books and records of the mortgage

10-10 company by an independent public accountant who holds a permit to

10-11 engage in the practice of public accounting in this state that has not been

10-12 revoked or suspended.

10-13 2. The commissioner may grant a reasonable extension for the

10-14 submission of a financial statement pursuant to this section if a mortgage

10-15 company requests such an extension before the date on which the

10-16 financial statement is due.

10-17 3. If a mortgage company maintains any accounts described in

10-18 subsection 1 of NRS 645B.175, the financial statement submitted

10-19 pursuant to this section must be audited. If a mortgage company

10-20 maintains any accounts described in subsection 4 of NRS 645B.175,

10-21 those accounts must be audited. The public accountant who prepares the

10-22 report of an audit shall submit a copy of the report to the commissioner

10-23 at the same time that he submits the report to the mortgage company.

10-24 4. The commissioner shall adopt regulations prescribing the scope of

10-25 an audit conducted pursuant to subsection 3.

10-26 Sec. 14. 1. If money from an investor is released to a debtor or his

10-27 designee pursuant to subsection 2 of NRS 645B.175 upon completion of

10-28 a loan secured by a lien on real property, the mortgage company that

10-29 arranged the loan shall, not later than 5 p.m. on the next business day

10-30 following the date on which the deed of trust for the real property is

10-31 recorded, mail to the last known address of each investor who owns a

10-32 beneficial interest in the loan a copy of the recorded deed of trust that

10-33 includes, in bold-faced and conspicuous print:

10-34 (a) The date on which the deed of trust was recorded; and

10-35 (b) The priority of the deed of trust on that date with regard to any

10-36 other liens encumbering the real property.

10-37 2. If a deed of trust is recorded in connection with a loan that has

10-38 been funded, in whole or in part, by money from an investor, the

10-39 mortgage company that arranged the loan and its mortgage agents shall

10-40 not engage in any act or transaction that subordinates the priority of the

10-41 deed of trust, as recorded, unless the mortgage company, before such an

10-42 act or transaction:

11-1 (a) Obtains written approval for the subordination from each investor

11-2 who owns a beneficial interest in the loan; and

11-3 (b) Submits a copy of each such written approval to the commissioner.

11-4 Sec. 15. If a mortgage company maintains any accounts described

11-5 in subsection 4 of NRS 645B.175 in which it deposits payments from a

11-6 debtor on a loan secured by a lien on real property and, on the last day of

11-7 any month, the debtor has failed to make two or more consecutive

11-8 payments in accordance with the terms of the loan, the mortgage

11-9 company shall:

11-10 1. Include in the report that the mortgage company submits to the

11-11 commissioner pursuant to subsection 2 of NRS 645B.080:

11-12 (a) The name, address and telephone number of the debtor;

11-13 (b) The total number of months and days that the debtor has failed to

11-14 make a payment;

11-15 (c) The outstanding balance of the loan and any accrued interest on

11-16 the last day of the month for which the report is submitted;

11-17 (d) A statement of whether the loan has been declared to be in default

11-18 and, if so, the nature of any actions that have been taken because of the

11-19 default; and

11-20 (e) Any other information required pursuant to the regulations

11-21 adopted by the commissioner;

11-22 2. Not later than 15 days after the last day of each such month, mail

11-23 a notice containing the information set forth in subsection 1 to the last

11-24 known address of each investor who owns a beneficial interest in the

11-25 loan; and

11-26 3. Comply with the provisions of this section each month on a

11-27 continuing basis until:

11-28 (a) The debtor or his designee remedies the delinquency in payments

11-29 and any default; or

11-30 (b) The lien securing the loan is extinguished.

11-31 Sec. 16. 1. If a person is required to make a payment to a

11-32 mortgage company pursuant to the terms of a loan secured by a lien on

11-33 real property, the mortgage company may not charge the person a late

11-34 fee, an additional amount of interest or any other penalty in connection

11-35 with that payment if the payment is delivered to the mortgage company

11-36 before 5 p.m. on:

11-37 (a) The day that the payment is due pursuant to the terms of the loan,

11-38 if an office of the mortgage company is open to customers until 5 p.m. on

11-39 that day; or

11-40 (b) The next day that an office of the mortgage company is open to

11-41 customers until 5 p.m., if the provisions of paragraph (a) do not

11-42 otherwise apply.

12-1 2. A mortgage company or a person may not agree to alter or waive

12-2 the provisions of this section by contract or other agreement, and any

12-3 such contract or agreement is void and must not be given effect to the

12-4 extent that it violates the provisions of this section.

12-5 Sec. 17. 1. A mortgage company or mortgage agent shall not

12-6 engage in any act or transaction on behalf of an investor pursuant to a

12-7 power of attorney unless:

12-8 (a) The power of attorney is executed for the sole purpose of providing

12-9 services for not more than one loan in which the investor owns a

12-10 beneficial interest; and

12-11 (b) The provisions of the power of attorney:

12-12 (1) Have been approved by the commissioner; and

12-13 (2) Expressly prohibit the mortgage company and its mortgage

12-14 agents from using or releasing any money in which the investor owns a

12-15 beneficial interest with regard to that loan for a purpose that is not

12-16 directly related to providing services for the loan or in any manner that

12-17 violates the provisions of NRS 645B.175.

12-18 2. A power of attorney which designates a mortgage company or

12-19 mortgage agent as the attorney in fact or the agent of an investor and

12-20 which violates the provisions of this section is void and must not be given

12-21 effect with regard to any act or transaction that occurs on or after

12-22 October 1, 1999, whether or not the power of attorney is or has been

12-23 executed by the investor before, on or after October 1, 1999.

12-24 Sec. 18. 1. A person may, in accordance with the regulations

12-25 adopted pursuant to subsection 2, file a complaint with the

12-26 commissioner, alleging that another person has violated a provision of

12-27 this chapter, a regulation adopted pursuant to this chapter or an order of

12-28 the commissioner.

12-29 2. The commissioner shall adopt regulations prescribing:

12-30 (a) The form that such a complaint must take;

12-31 (b) The information that must be included in such a complaint; and

12-32 (c) The procedures that a person must follow to file such a complaint.

12-33 Sec. 19. 1. If a person properly files a complaint with the

12-34 commissioner pursuant to section 18 of this act, the commissioner shall

12-35 investigate each violation alleged in the complaint, unless the

12-36 commissioner has previously investigated the alleged violation.

12-37 2. Except as otherwise provided in subsection 2 of NRS 645B.090, if

12-38 the commissioner does not conduct an investigation of an alleged

12-39 violation pursuant to subsection 1 because he previously has investigated

12-40 the alleged violation, the commissioner shall provide to the person who

12-41 filed the complaint a written summary of the previous investigation and

12-42 the nature of any disciplinary action that was taken as a result of the

12-43 previous investigation.

13-1 3. If the commissioner conducts an investigation of an alleged

13-2 violation pursuant to subsection 1, the commissioner shall determine

13-3 from the investigation whether there is reasonable cause to believe that

13-4 the person committed the alleged violation.

13-5 4. If, upon investigation, the commissioner determines that there is

13-6 not reasonable cause to believe that the person committed the alleged

13-7 violation, the commissioner shall provide the reason for his

13-8 determination, in writing, to the person who filed the complaint and to

13-9 the person alleged to have committed the violation.

13-10 5. If, upon investigation, the commissioner determines that there is

13-11 reasonable cause to believe that the person committed the alleged

13-12 violation, the commissioner shall:

13-13 (a) Schedule a hearing concerning the alleged violation;

13-14 (b) Mail to the last known address of the person who filed the

13-15 complaint written notice that must include, without limitation:

13-16 (1) The date, time and place of the hearing; and

13-17 (2) A statement of each alleged violation that will be considered at

13-18 the hearing; and

13-19 (c) By personal service in accordance with the Nevada Rules of Civil

13-20 Procedure and any applicable provision of NRS, serve written notice of

13-21 the hearing to the person alleged to have committed the violation. The

13-22 written notice that is served pursuant to this paragraph must include,

13-23 without limitation:

13-24 (1) The date, time and place of the hearing;

13-25 (2) A copy of the complaint and a statement of each alleged

13-26 violation that will be considered at the hearing; and

13-27 (3) A statement informing the person that, pursuant to section 23 of

13-28 this act, if he fails to appear, without reasonable cause, at the hearing:

13-29 (I) He is guilty of a misdemeanor;

13-30 (II) A warrant will be issued for his arrest; and

13-31 (III) The commissioner is authorized to conduct the hearing in

13-32 his absence, draw any conclusions that the commissioner deems

13-33 appropriate from his failure to appear and render a decision concerning

13-34 each alleged violation.

13-35 6. The commissioner may investigate and conduct a hearing

13-36 concerning any alleged violation, whether or not a complaint has been

13-37 filed.

13-38 7. The commissioner may hear and consider more than one alleged

13-39 violation against a person at the same hearing.

13-40 8. Except as otherwise provided by specific statute, if the

13-41 commissioner conducts a hearing concerning an alleged violation

13-42 without a complaint having been filed, the commissioner shall serve

14-1 written notice of the hearing, pursuant to paragraph (c) of subsection 5,

14-2 to the person alleged to have committed the violation.

14-3 Sec. 20. 1. If a person offers or provides any services of a

14-4 mortgage company or mortgage agent or otherwise engages in, carries

14-5 on or holds himself out as engaging in or carrying on the business of a

14-6 mortgage company or mortgage agent and, at the time:

14-7 (a) The person was required to have a license pursuant to this chapter

14-8 and the person did not have such a license; or

14-9 (b) The person’s license was suspended or revoked pursuant to this

14-10 chapter,

14-11 the commissioner shall impose upon the person an administrative fine of

14-12 not more than $10,000 for each violation and, if the person has a license,

14-13 the commissioner shall revoke it.

14-14 2. If a person is exempt from the provisions of this chapter pursuant

14-15 to subsection 6 of NRS 645B.015 and the person, while exempt,

14-16 maintains, offers to maintain or holds himself out as maintaining any

14-17 accounts described in subsection 1 of NRS 645B.175 or otherwise

14-18 engages in, offers to engage in or holds himself out as engaging in any

14-19 activity that would remove the person from the exemption set forth in

14-20 subsection 6 of NRS 645B.015, the commissioner shall impose upon the

14-21 person an administrative fine of not more than $10,000 for each

14-22 violation and the commissioner shall revoke the person’s exemption. If

14-23 the commissioner revokes an exemption pursuant to this subsection, the

14-24 person may not again be granted the same or a similar exemption from

14-25 the provisions of this chapter. The person may apply for a license

14-26 pursuant to this chapter unless otherwise prohibited by specific statute.

14-27 3. If a mortgage company or mortgage agent violates any provision

14-28 of NRS 645B.175, the commissioner shall impose upon the mortgage

14-29 company or mortgage agent, or both, an administrative fine of not more

14-30 than $10,000 for each violation and the commissioner shall revoke the

14-31 license of the mortgage company or mortgage agent, or both.

14-32 4. If a mortgage company or mortgage agent violates any provision

14-33 of subsection 1 of NRS 645B.080 and the mortgage company or

14-34 mortgage agent fails, without reasonable cause, to remedy the violation

14-35 within 10 days after being ordered by the commissioner to do so, or if the

14-36 commissioner orders a mortgage company or mortgage agent to provide

14-37 information, make a report or permit an examination of his books or

14-38 affairs pursuant to this chapter and the mortgage company or mortgage

14-39 agent fails, without reasonable cause, to comply with the order within 10

14-40 days:

14-41 (a) The commissioner shall impose upon the mortgage company or

14-42 mortgage agent, or both, an administrative fine of not more than $10,000

15-1 for each violation and the commissioner shall suspend or revoke the

15-2 license of the mortgage company or mortgage agent, or both; and

15-3 (b) If the violation is committed by a mortgage company, the mortgage

15-4 company shall be deemed to be conducting its business in an unsafe and

15-5 injurious manner that may result in danger to the public, and the

15-6 commissioner shall immediately take possession of the property of the

15-7 mortgage company pursuant to NRS 645B.150.

15-8 5. For each violation that may be committed by a person pursuant to

15-9 this chapter or the regulations adopted pursuant to this chapter, other

15-10 than a violation described in this section, the commissioner shall adopt

15-11 regulations:

15-12 (a) Categorizing the violation as a major violation or a minor

15-13 violation; and

15-14 (b) Specifying the disciplinary action that will be taken by the

15-15 commissioner pursuant to this chapter against a person who commits:

15-16 (1) A major violation. The disciplinary action taken by the

15-17 commissioner for a major violation must include, without limitation,

15-18 suspension or revocation of the person’s license.

15-19 (2) More than two minor violations. The commissioner may

15-20 establish graduated sanctions for a person who commits more than two

15-21 minor violations based upon the number, the frequency and the severity

15-22 of the minor violations and whether the person previously has committed

15-23 any major violations.

15-24 Sec. 21. If a person or licensee is a partnership, corporation or

15-25 unincorporated association, the commissioner shall take the disciplinary

15-26 action set forth in section 20 of this act and may take any other

15-27 disciplinary action set forth in this chapter against the person or licensee

15-28 if any member of the partnership or any officer or director of the

15-29 corporation or unincorporated association has committed any act or

15-30 omission that would be cause for taking such disciplinary action against

15-31 a natural person.

15-32 Sec. 22. Before conducting a hearing, the commissioner may, to the

15-33 fullest extent permitted by the Constitution of the United States and the

15-34 constitution of this state:

15-35 1. Order a summary suspension of a license pursuant to subsection 3

15-36 of NRS 233B.127; and

15-37 2. Take any other action against a licensee or other person that is

15-38 necessary to protect the health, safety or welfare of the public.

15-39 Sec. 23. If a person is alleged to have engaged in any conduct or

15-40 committed any violation that is described in NRS 645B.100, 645B.120 or

15-41 645B.150 or section 20 of this act or is alleged to have committed a

15-42 violation of any other provision of this chapter, a regulation adopted

15-43 pursuant to this chapter or an order of the commissioner, and the person

16-1 fails to appear, without reasonable cause, at a hearing before the

16-2 commissioner concerning the alleged conduct or violation:

16-3 1. The commissioner shall notify the attorney general that the person

16-4 failed to appear;

16-5 2. The attorney general shall request from the appropriate court a

16-6 warrant for the arrest of the person;

16-7 3. The court shall issue a warrant for the arrest of the person if there

16-8 is probable cause to believe that the person failed to appear without

16-9 reasonable cause;

16-10 4. The person is guilty of a misdemeanor; and

16-11 5. The commissioner may conduct the hearing in the person’s

16-12 absence, draw any conclusions that the commissioner deems appropriate

16-13 from his failure to appear and render a decision concerning the alleged

16-14 conduct or violation.

16-15 Sec. 24. 1. The attorney general has primary jurisdiction for the

16-16 enforcement of this chapter. The attorney general shall investigate and, if

16-17 appropriate, prosecute a person who violates:

16-18 (a) Any provision of this chapter, a regulation adopted pursuant to

16-19 this chapter or an order of the commissioner, including, without

16-20 limitation, a violation of any provision of NRS 645B.100 or 645B.120 or

16-21 section 20 of this act; or

16-22 (b) Any other law or regulation if the person commits the violation in

16-23 the course of offering or providing any services of a mortgage company

16-24 or mortgage agent or while otherwise engaging in, carrying on or

16-25 holding himself out as engaging in or carrying on the business of a

16-26 mortgage company or mortgage agent.

16-27 2. The attorney general shall investigate and, if appropriate,

16-28 prosecute a person who is alleged to have committed a violation

16-29 described in subsection 1 whether or not:

16-30 (a) The commissioner notifies the attorney general of the alleged

16-31 violation;

16-32 (b) The commissioner takes any disciplinary action against the person

16-33 alleged to have committed the violation;

16-34 (c) Any other person files a complaint against the person alleged to

16-35 have committed the violation; or

16-36 (d) A civil action is commenced against the person alleged to have

16-37 committed the violation.

16-38 3. When acting pursuant to this section, the attorney general may

16-39 commence his investigation and file a criminal action without leave of

16-40 court, and the attorney general has exclusive charge of the conduct of

16-41 the prosecution.

16-42 4. Except as otherwise provided by the Constitution of the United

16-43 States, the constitution of this state or a specific statute, a person shall, if

17-1 requested, provide the attorney general with information that would

17-2 assist in the prosecution of any other person who is alleged to have

17-3 committed a violation described in subsection 1. If a person fails, without

17-4 reasonable cause, to provide the attorney general with such information

17-5 upon request, the person is guilty of a misdemeanor.

17-6 Sec. 25. 1. The attorney general may bring any appropriate civil

17-7 action against a person to enforce any provision of this chapter, a

17-8 regulation adopted pursuant to this chapter or an order of the

17-9 commissioner, including, without limitation, an order of the

17-10 commissioner:

17-11 (a) Imposing an administrative fine; or

17-12 (b) Suspending, revoking or placing conditions upon a license.

17-13 2. Whether or not the attorney general brings a civil action against a

17-14 person pursuant to this chapter, the attorney general may prosecute the

17-15 person for a criminal violation pursuant to this chapter.

17-16 Sec. 26. NRS 645B.010 is hereby amended to read as follows:

17-17 645B.010 As used in this chapter, unless the context otherwise

17-42 8. "Mortgage company" means any person who, directly or indirectly:

18-1 (a) Holds himself out for hire to serve as an agent for any person in an

18-2 attempt to obtain a loan which will be secured by a lien on real property;

18-3 (b) Holds himself out for hire to serve as an agent for any person who

18-4 has money to lend, if the loan is or will be secured by a lien on real

18-5 property;

18-6 (c) Holds himself out as being able to make loans secured by liens on

18-7 real property, unless the loans are made pursuant to subsection 8 or 10 of

18-8 NRS 645B.015;

18-9 (d) Holds himself out as being able to buy or sell notes secured by liens

18-10 on real property; or

18-11 (e) Offers for sale in this state any security which is exempt from

18-12 registration under state or federal law and purports to make investments in

18-13 promissory notes secured by liens on real property.

18-14 Sec. 27. NRS 645B.015 is hereby amended to read as follows:

18-15 645B.015 Except as otherwise provided in [subsection 5 of NRS

18-42 and the Department of Veterans Affairs.

19-1 A firm or corporation is not exempt from the provisions of this chapter

19-2 pursuant to this subsection if it maintains any accounts described in

19-3 subsection 1 of NRS 645B.175 or offers for sale in this state any

19-4 unregistered security under state or federal law and purports to make

19-5 investments in promissory notes secured by liens on real property. A firm

19-6 or corporation which is exempted pursuant to this subsection must submit

19-7 annually as a condition of its continued exemption a certified statement by

19-8 an independent certified public accountant that the firm or corporation

19-9 does not maintain any such accounts. This subsection does not prohibit an

19-10 exempt firm or corporation from maintaining accounts described in NRS

19-11 645B.170 and subsection [3] 4 of NRS 645B.175.

19-12 7. Any person doing any act under an order of any court.

19-13 8. Any one natural person, or husband and wife, who provides money

19-14 for investment in loans secured by a lien on real property, on his own

19-15 account.

19-16 9. Agencies of the United States and of this state and its political

19-17 subdivisions, including the public employees’ retirement system.

19-18 10. A seller of real property who offers credit secured by a mortgage

19-19 of the property sold.

19-20 Sec. 28. NRS 645B.020 is hereby amended to read as follows:

19-21 645B.020 1. A [license] person who wishes to be licensed as a

19-42 or is presently licensed as a mortgage agent.

20-1 (e) If the applicant is a natural person, include the social security

20-2 number of the applicant.

20-3 (f) [Indicate the] Include a general business plan and [character of the

20-4 business.] a manual of policies and procedures for the mortgage

20-5 company and its mortgage agents that includes, without limitation, the

20-6 underwriting standards, restrictions and other policies and procedures

20-7 that the mortgage company and its mortgage agents will follow to

20-8 arrange and service loans and to conduct business pursuant to this

20-9 chapter.

20-10 (g) State the length of time the applicant has been engaged in the

20-11 mortgage company business.

20-12 (h) Include a financial statement of the applicant [.

20-13 (i) Include such] and sufficient evidence to establish that the applicant

20-14 will be able to maintain continuously the net worth required pursuant to

20-15 section 11 of this act.

20-16 (i) Include any other information [as] required pursuant to the

20-17 regulations adopted by the commissioner or an order of the commissioner

20-18 . [determines necessary.

20-19 3. The]

20-20 3. An application for a license as a mortgage agent must:

20-21 (a) Be verified.

20-22 (b) State the name, residence address and business address of the

20-23 applicant and the name under which the applicant will conduct business

20-24 as a mortgage agent.

20-25 (c) State the name of the mortgage company with whom the applicant

20-26 will be associated or employed and whether the mortgage company has

20-27 applied for a license or is presently licensed.

20-28 (d) State the location of each office of the mortgage company at which

20-29 the applicant will conduct business.

20-30 (e) If the applicant is not a natural person, list the name, residence

20-31 address and business address of each person who will have an interest in

20-32 the mortgage agent as a principal, partner, officer, director or trustee,

20-33 specifying the capacity and title of each such person.

20-34 (f) If the applicant is a natural person, include the social security

20-35 number of the applicant.

20-36 (g) Include a financial statement of the applicant.

20-37 (h) Include any other information required pursuant to the

20-38 regulations adopted by the commissioner or an order of the

20-39 commissioner.

20-40 4. If a mortgage company will conduct business at one or more

20-41 branch offices within this state, the mortgage company must apply for a

20-42 license for each such branch office. If a mortgage agent will conduct

21-1 business from more than one office of the mortgage company with whom

21-2 he is associated or employed, the mortgage agent must apply for a license

21-3 for each such office.

21-4 5. Except as otherwise provided in this chapter, the commissioner

21-5 shall issue a license to an applicant as a mortgage company or mortgage

21-6 agent if:

21-7 (a) The application complies with the requirements of [subsection 2;]

21-8 this chapter;

21-9 (b) The applicant submits the statement required pursuant to NRS

21-10 645B.023, if the applicant is required to do so; and

21-11 (c) The applicant and each general partner, officer or director of the

21-12 applicant, if the applicant is a partnership, corporation or unincorporated

21-13 association:

21-14 (1) Has a good reputation for honesty, trustworthiness, integrity and

21-15 displays competence to transact the business of a mortgage company or

21-16 mortgage agent in a manner which safeguards the interests of the general

21-17 public. The applicant must submit satisfactory proof of these qualifications

21-18 to the commissioner.

21-19 (2) Has not been convicted of, or entered a plea of nolo contendere

21-20 to, a felony or any crime involving fraud, misrepresentation or moral

21-21 turpitude.

21-22 (3) Has not made a false statement of material fact on his application.

21-23 (4) Has not had a license that was issued pursuant to the provisions of

21-24 this chapter suspended or revoked within the 10 years immediately

21-25 preceding the date of his application.

21-26 (5) Has not had a license that was issued in any other state, district or

21-27 territory of the United States or any foreign country suspended or revoked

21-28 within the 10 years immediately preceding the date of his application.

21-29 (6) Has not violated any [of the provisions] provision of this chapter

21-30 [or any] , a regulation adopted pursuant [thereto.

21-31 4.] to this chapter or an order of the commissioner.

21-32 6. If an applicant is a partnership, corporation or unincorporated

21-33 association, the commissioner may refuse to issue a license to the

21-34 applicant if any member of the partnership or any officer or director of

21-35 the corporation or unincorporated association has committed any act or

21-36 omission that would be cause for refusing to issue a license to a natural

21-37 person.

21-38 7. A license entitles the [holder] licensee to engage only in the

21-39 activities authorized by this chapter.

21-40 [5. A person who claims an exemption from the provisions of this

21-41 chapter must apply to the commissioner for a certificate of exemption and

21-42 pay the fee for application.]

22-1 Sec. 29. NRS 645B.023 is hereby amended to read as follows:

22-2 645B.023 1. A natural person who applies for the issuance or

22-28 arrearage.

22-29 Sec. 30. NRS 645B.025 is hereby amended to read as follows:

22-30 645B.025 1. A [licensee] mortgage agent may not be associated

22-42 commissioner.

23-1 4. A mortgage company shall post [each] its license and the license of

23-2 each of its mortgage agents in a conspicuous place in the office [to which

23-3 it pertains.

23-4 2. A license] for which each license has been issued.

23-5 5. A mortgage company may not [be transferred or assigned] transfer

23-6 or assign a license to another person, unless the commissioner gives his

23-7 written approval.

23-8 6. A mortgage agent may not change the mortgage company with

23-9 whom he is associated or employed, unless the commissioner gives his

23-10 written approval and the mortgage agent pays the fee required pursuant

23-11 to NRS 645B.050.

23-12 Sec. 31. NRS 645B.050 is hereby amended to read as follows:

23-13 645B.050 1. A [mortgage company’s] license issued pursuant to

23-42 thereafter. The commissioner may grant a reasonable extension for the

24-1 submission of the financial statement if requested before the statement is

24-2 due.

24-3 3. If a licensee maintains any accounts described in subsection 1 of

24-4 NRS 645B.175, the financial statement submitted pursuant to this section

24-5 must be audited. If the licensee maintains any accounts described in

24-6 subsection 3 of NRS 645B.175, those accounts must be audited. The public

24-7 accountant who prepares the report of an audit shall submit a copy of the

24-8 report to the commissioner at the same time as he submits the report to the

24-9 company. The commissioner shall, by regulation, prescribe the scope of

24-10 audits conducted pursuant to this subsection.

24-11 4. A]

24-12 3. Except as otherwise provided in section 10 of this act, a certificate

24-13 of exemption issued pursuant to [subsection 5 of NRS 645B.020] this

24-14 chapter expires each year on December 31 [next after the date of issuance

24-15 if it is not renewed. A] , unless it is renewed. To renew a certificate of

24-16 exemption [may be renewed by filing an] , a person must submit to the

24-17 commissioner on or before December 31 of each year:

24-18 (a) An application for renewal [and paying the annual fee for renewal

24-19 of a] that includes sufficient evidence to establish that the person meets

24-20 the requirements of at least one exemption set forth in the provisions of

24-21 NRS 645B.015; and

24-22 (b) The fee required to renew the certificate of exemption . [for the

24-23 succeeding year. The application and payment must be received by the

24-24 commissioner on or before December 31 next preceding the expiration

24-25 date.]

24-26 4. If the [application or payment is not received by] person fails to

24-27 submit any item required pursuant to subsection 3 to the commissioner

24-28 on or before December 31 [,] of any year, the certificate of exemption is