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The Department of Insurance and Financial Services has issued a new Director’s Order:
Cranbrook Loans Group, Inc 22-16746
Order Accepting Stipulation and Stipulation to Entry of Order Date: 02-07-2023
For a listing of all Director’s Orders visit https://www.michigan.gov/difs/legal/hearings-decisions/directors-orders
Subordinate Mortgage Activity Licensing or Registration Requirements:
In the course of performing our supervisory responsibilities, the Office of Consumer Finance (“OCF”) has noticed a significant increase in subordinate mortgage loan activity, including unlicensed activity. This Notice is intended to inform and remind licensees and registrants under the Mortgage Brokers, Lenders, and Servicers Licensing Act (“MBLSLA”) that a license or registration under the MBLSLA only authorizes the licensee or registrant to engage in first mortgage loan activity. If a person intends to conduct, or is engaged in, subordinate lien mortgage activity, the person is required to obtain a separate license or registration under the Secondary Mortgage Loan Act (“SMLA”).
A secondary (or subordinate) mortgage loan is defined under Section 1(2)(p) of the SMLA, MCL 493.51(2)(p), to include any “loan that has a term of 90 days or more; that is made to a person for personal, family, or household purposes; and that is secured by a mortgage on an interest in real property that is used as a dwelling and is subject to a lien of 1 or more outstanding mortgages.”
If a person engages in secondary mortgage activity without first obtaining and holding the requisite license or registration under the SMLA, the person is subject to investigation and potential sanctions under the SMLA.
Licensees and registrants are advised to review their business activities to determine whether they are engaged in secondary mortgage activity and, if they do not hold the appropriate license or registration under the SMLA, they must immediately discontinue any new activity and contact the OCF Licensing Section within 30 days and, if necessary, apply for the required license or registration. Failure to comply with the licensing or registration requirements under the SMLA within 30 days of this notice will subject a person engaged in unlicensed SMLA activity to applicable penalties under the SMLA.
You may find State Licensing Requirements for Michigan on the Nationwide Multistate Licensing System & Registry (NMLS) Resource Center.
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