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Mortgage Loan Servicer Change of Control Application

General Instructions

  1. Section 594-b of the New York Banking Law, makes it unlawful, except with the prior approval of the Superintendent for any action to be taken which results in the change of control of a registrant.  Change of Control means the power, directly or indirectly, to direct the management or policies of a registrant through ownership or otherwise.

Note: Changes in officers or directors are not considered change of control; however, may require formal notification and approval (see instructions for Changes in Officers, Directors and Qualifier).

  1. Given the requirements of Section 594-b, an application for change of control cannot be filed through Nationwide Mortgage Licensing System (NMLS). Changes in control require the prior approval of the Superintendent.

  2. Applicants for a Change of Control are required to pay the following non-refundable fees: investigation fee - $3,000 payable to the Superintendent of Banks; and fingerprint processing fee- $105.00 (see fingerprint instructions).

  3. Foreign corporations must obtain authority from the Secretary of State to conduct business in the State of New York prior to submitting a change of control application.

  4. Background information is required for each control person that directly or indirectly owns 10 percent or more of the voting stock of the registrant, or possesses the power to direct or cause the direction of the management and policies of the registrant. Form MU2 must be completed for each control person, three most senior executive officers and directors

Jurisdiction Specific Requirements

Change of control applicants must submit documentation directly to the New York State Department of Financial Services at the following address:

New York State Department of Financial Services
One State Street
New York, NY 10004
Attention: Mortgage Banking-Applications Unit

  1. FINANCIAL STATEMENT. Corporate applicants must provide audited financial statements for the past two years prepared by a Certified Public Accountant in accordance with Generally Accepted Accounting Principles.  Also provide unaudited financial statement for the most recent quarter signed and affirmed by an executive officer of the corporate applicant.  Financials must be provided for all direct and indirect corporate owners of the applicant.  Financial statements should include a Balance Sheet, Income Statement and Statement of Cash Flows and all relevant notes thereto.

  2. SURETY BOND. Submit a letter from the Surety provider confirming that the surety bond remains in effect after the change of control.

  3. FIDELITY BOND AND ERRORS & OMISSIONS COVERAGE. Submit a letter from the insurance provider confirming that the bond and E&O coverage remains in effect after the change of control.

  4. SECRETARY OF STATE DOCUMENTATION.

Domestic Companies (entities incorporated or chartered in the State of New York) provide the following:

    • Certificate of Good Standing, if the applicant has been incorporated for more than six months and one of the following:

    • Certified copy certificate of incorporation and filing receipt (if a corporation);or

    • The Articles of Organization and Operating Agreement (if a Limited Liability Company); or

    • Partnership Agreement or Trust Agreement (if a partnership or established pursuant to a trust);

Foreign Companies (entities incorporated or chartered outside the State of New York) provide the following:

    • Certificate of Good Standing from the New York Secretary of State if the authority to conduct business in New York is more than six months old;

    • Copy of filing receipt and certified copy of Application for Authority from the New York Secretary of State; or

    • Copy of filing receipt and certified Certificate of Fictitious name from the New York Secretary of State if you file for a Fictitious name;

Also provide one of the following:

  1. CHANGE IN OWNERSHIP LEGAL DOCUMENTS.  Provide certified copies of all legal documents executed and associated with the change in ownership, including any applicable purchase and sales agreements, merger agreements, or consent to change in ownership agreements.

  2. CORPORATE/PARTNERSHIP/TRUST RESOLUTION For corporate entities, provide a corporate resolution, authorizing officer to execute the application on the entity’s behalf.  Resolution must be signed by the corporate secretary and bear the seal of the corporation.  For partnership or trust entities, provide an authorization signed by a managing member, general partner or trustee authorizing an amendment to the existing agreement.

  3. STATEMENT OF PROPOSED OWNERSHIP.  The applicant must indicate percentage ownership after the proposed change in control. 

  4. DESCRIPTION OF ACQUISITION.  Submit a brief description of the acquisition indicating purpose, source of funds and financing terms, if applicable, and ability of the proposed owners to weather financial adversities.  Describe changes in the corporate or entity structure, managerial and/or staffing changes contemplated.

  5. OWNERSHIP STRUCTURE AND ORGANIZATION CHART.  For corporate applicants, submit an organizational chart, detailing ownership structure and operating management structure.  Reporting lines of executive officers and operating committees should be clearly delineated.

  6. BUSINESS PLAN. Provide a business plan or statement outlining the impact, if any, of the proposed change of control on the registrant’s marketing strategy, products and services, operational structure and geographical services areas.

  7. CERTIFICATE OF COMPLIANCE. All applicants must certify that it is in compliance with Section 296-a of the Executive Law.

  8. BACKGROUND REPORTS AND BACKGROUND REPORT CERTIFICATION. In connection with the change of control application for a registered mortgage loan servicer supervised by the Department, an investigative background report is required. Reports are required for all direct or indirect owners, owning 10 percent or more of the voting stock of the entity, three senior most executive officers, directors and qualifiers. Background investigation reports must be provided directly to the Department of Financial Services by the private investigation company.
  9. PERSONAL QUESTIONNAIRE. All direct and indirect owners, owning 10% or more of the voting stock of the applicant, three most senior executive officers, directors and qualifiers must submit Personal Questionnaire.
  10. PERSONAL FINANCIAL STATEMENTS. All direct and indirect owners, owning 10 percent or more of the voting stock of the applicant, three most senior executive officers, directors and qualifiers must submit a Personal Financial Statement for the most recent quarter and year end.
  11. DISCLOSURE QUESTIONS. Provide complete details of all events or proceedings for any “Yes” answer to any of the Disclosure questions in the respective Application Form and Questionnaire for the individual or entity or any new Control Person or any new senior executive officer or directors.
  12. LITIGATION AFFIDAVIT. All direct and indirect owners, owning 10% or more of the voting stock of the applicant, three most senior executive officers, directors and qualifiers must submit a Litigation Affidavit. If applicable, also provide a letter from applicant attorney detailing any pending litigation and the most likely outcome.
  13. FINGERPRINTS. Each control person, three most senior executive officers, directors and qualifiers must provide fingerprints to the Department of Financial Services.
  14. AFFIRMATION. Provide an Affirmation stating that the applicant will immediately notify the superintendent of any changes to the information furnished in the application and that designated officer has reviewed the application and certifies that the application does not contain any untrue statement or omission of material facts.
  15. RESUME. Submit the resume of each individual applicant or corporate principal.
  16. BANKRUPTCY. Provide a copy of the Certificate of Discharge and schedules of debts that were discharged from the appropriate Court.  Note: The Department will not accept an application with an open bankruptcy case.
  17. JUDGEMENTS. Provide a copy of the Satisfaction of Judgment from the appropriate court where the judgment was filed.  Note: The Department will not accept an application with an open judgment.

CONTACT

If you require assistance in using the NMLS database or logging into the system, please contact the NMLS Call Center at (240) 386-4444

For New York State Jurisdiction specific requirements contact the Department the via e-mail at mbbdenovo@dfs.ny.gov

YOU ARE NOT AUTHORIZED TO ACQUIRE CONTROL OF A NEW YORK REGULATED MORTGAGE SERVICER UNTIL YOU HAVE RECEIVED APPROVAL FROM THE SUPERINTENDENT OF FINANCIAL SERVICES OF THE STATE OF NEW YORK.