N.Y. Comp. Codes R. & Regs. tit. 3 § 420.20

Current through Register Vol. 46, No. 45, November 2, 2024

Section 420.20 - Prohibited conduct

(a) No MLO shall:

(1) engage in conduct prohibited under section 38.7 of this Title, as applicable;

(2) continue to engage in mortgage loan originating after receiving notice of the denial of his or her application for a license or notice of the revocation, suspension or termination of his or her license;

(3) misrepresent his or her license status, or persuade or induce a borrower to apply for a mortgage loan under the belief that such MLO is duly licensed as a mortgage banker or registered as a mortgage broker pursuant to article 12-D of the Banking Law or an entity exempt from the licensing provisions of article 12-D;

(4) publish, advertise or display his or her MLO license in any manner which implies that the MLO is licensed or registered with the New York State Department of Financial Services to engage in mortgage loan originating activities as a mortgage banker or mortgage broker pursuant to article 12-D of the Banking Law;

(5) conduct business with any entity or individual which he or she knows or should know is an unlicensed mortgage banker or unregistered mortgage broker not otherwise exempt from the licensing, registration and license requirements of articles 12-D and 12-E of the Banking Law;

(6) engage in any transaction, practice, or course of business that is not in good faith or does not constitute fair dealing as required by the character and fitness requirements of section 599-d of the Banking Law and sections 592 and 592-a of the Banking Law;

(7) download or remove borrowers' or mortgage loan applicants' loan files or other information from the premises or automated systems of an originating entity without permission of the originating entity;

(8) publish or advertise its MLO license or unique identifier in any manner which implies that such license or unique identifier can be shared or used by multiple individuals to engage in mortgage loan originating activities in this State;

(9) allow any individual or entity, regardless of whether such individual or entity is registered, or licensed pursuant to article 12-D or 12-E of the Banking Law, to utilize the MLO's license or unique identifier to engage in mortgage loan originating activities; or

(10) except as may be approved in writing by the superintendent, simultaneously work for or be affiliated with more than one originating entity.

(b) No originating entity or exempt organization shall:

(1) permit any MLO who is subject to any education requirement pursuant to article 12-E of the Banking Law that is then required to have been completed to engage in mortgage loan originating until acceptable proof or record of completion has been obtained by such originating entity;

(2) permit any MLO subject to the provisions of this Part and article 12-E of the Banking Law to engage in mortgage loan originating activities when it knows or has reason to know that the MLO's license has been terminated or has been suspended or revoked;

(3) pay compensation for mortgage loan originating activities to an individual who is then required to be licensed as an MLO but has not received such license, or, except as required by law or court order, pay the compensation of a MLO to a individual; other than the individual on the MLO license; or

(4) use the unique identifier of a licensed MLO to process or submit an application taken by any unlicensed individual.

N.Y. Comp. Codes R. & Regs. Tit. 3 § 420.20

Adopted, New York State Register October 1, 2014/Volume XXXVI, Issue 39, eff.10/1/2014