Section 58-21B-13 - Enforcement; violations; penalties.
58-21B-13. Enforcement; violations; penalties.
A. In order to ensure the effective supervision and enforcement of the New Mexico Mortgage Loan Originator Licensing Act, the director may:
(1) deny, suspend, revoke or decline to renew a license for a violation of the New Mexico Mortgage Loan Originator Licensing Act or rules issued pursuant to that act or an order or a directive entered pursuant to that act;
(2) deny, suspend, revoke or decline to renew a license if an applicant or licensed mortgage loan originator:
(a) fails at any time to meet the requirements of Section 6 [58-21B-6 NMSA 1978] or 9 [58-21B-9 NMSA 1978] of the New Mexico Mortgage Loan Originator Licensing Act; or
(b) withholds information or makes a material misstatement in an application for a license or renewal of a license;
(3) order restitution against mortgage loan originators for violations of that act;
(4) impose fines on mortgage loan originators pursuant to Subsections C through E of this section;
(5) order or direct such other affirmative action as the director deems necessary;
(6) bar or suspend a mortgage loan originator from licensure in New Mexico as a mortgage loan originator; and
(7) issue orders or directives pursuant to the New Mexico Mortgage Loan Originator Licensing Act as follows:
(a) order or direct mortgage loan originators to cease and desist from conducting business, including issuing an immediate temporary order to cease and desist;
(b) order or direct mortgage loan originators to cease any harmful activities or violations of that act, including issuing an immediate temporary order to cease and desist; and
(c) enter immediate temporary orders to cease business pursuant to a license issued pursuant to the authority granted pursuant to Section 4 of the New Mexico Mortgage Loan Originator Licensing Act if the director determines that the license was erroneously granted or the licensed mortgage loan originator is currently in violation of that act.
B. The director may initiate one or more of the actions set forth in Section 15 [58-21B-15 NMSA 1978] of the New Mexico Mortgage Loan Originator Licensing Act.
C. It is a violation of the New Mexico Mortgage Loan Originator Licensing Act for a mortgage loan originator to:
(1) directly or indirectly employ any scheme, device or artifice to defraud or mislead borrowers or lenders or to defraud any person;
(2) engage in any unfair or deceptive practice toward any person;
(3) obtain property by fraud or misrepresentation;
(4) solicit or enter into a contract with a borrower that provides in substance that the mortgage loan originator may earn a fee or commission through "best efforts" to obtain a loan even though no loan is actually obtained for the borrower;
(5) solicit, advertise or enter into a contract for specific interest rates, points or other financing terms unless the terms are actually available at the time of soliciting, advertising or contracting;
(6) conduct any business covered by the New Mexico Mortgage Loan Originator Licensing Act without holding a valid license as required pursuant to that act, or assist or aid and abet any person in the conduct of business pursuant to that act without a valid license as required pursuant to that act;
(7) fail to make disclosures as required by the New Mexico Mortgage Loan Originator Licensing Act and any other applicable state or federal law, including rules and regulations thereunder;
(8) fail to comply with the provisions of the New Mexico Mortgage Loan Originator Licensing Act or rules or regulations promulgated pursuant to that act, or fail to comply with any other state or federal law, including rules and regulations thereunder, applicable to any business authorized or conducted pursuant to the New Mexico Mortgage Loan Originator Licensing Act;
(9) make, in any manner, a false or deceptive statement or representation, including, with regard to the rates, points or other financing terms or conditions for a residential mortgage loan, engaging in bait-and-switch advertising;
(10) negligently make any false statement or knowingly and willfully make any omission of material fact in connection with any information or reports filed with a governmental agency or the nationwide mortgage licensing system and registry or in connection with any investigation conducted by the director or another governmental agency;
(11) make any payment, threat or promise, directly or indirectly, to any person for the purposes of influencing the independent judgment of the person in connection with a residential mortgage loan or make any payment, threat or promise, directly or indirectly, to any appraiser of a property for the purposes of influencing the independent judgment of the appraiser with respect to the value of the property. Nothing in this paragraph shall be construed to prohibit a mortgage loan originator from asking the appraiser to consider additional appropriate property information or provide further detail, substantiation or explanation for the appraiser's value conclusion;
(12) collect, charge, attempt to collect or charge, or to use or propose any agreement purporting to collect or charge, any fee prohibited by the New Mexico Mortgage Loan Originator Licensing Act;
(13) cause or require a borrower to obtain property insurance coverage in an amount that exceeds the replacement cost of the improvements as established by the director and the property insurer;
(14) fail to account truthfully for money belonging to a party to a residential mortgage loan transaction;
(15) engage in mortgage loan origination on behalf of more than one mortgage loan company;
(16) pay, receive or collect in whole or in part any commission, fee or other compensation for originating a mortgage loan in violation of the New Mexico Mortgage Loan Originator Licensing Act, including a mortgage loan originated by any unlicensed person other than an exempt person;
(17) charge or collect any fee, commission or rate of interest or make or originate any mortgage loan with terms or conditions or in a manner contrary to other applicable federal and state laws;
(18) advertise mortgage loans, including rates, margins, discounts, points, fees, commission or other material information, including material limitations on the loans, unless the person is able to make the mortgage loans available to a reasonable number of qualified applicants;
(19) coerce, extort, induce, bribe or intimidate or attempt to coerce, extort, induce, bribe or intimidate an appraiser to value property in excess of its fair market value;
(20) originate a mortgage loan that contains a pre-payment penalty;
(21) misrepresent a borrower's credit rating;
(22) misrepresent, inflate or fabricate, or encourage a borrower to misrepresent, inflate or fabricate, the source or amount of a borrower's actual income or assets, other than allowable grossed-up income not to exceed twenty-five percent per current agency guidelines as set by the director, in the application or underwriting process for a residential mortgage loan;
(23) originate a residential mortgage loan when the terms of that loan are in violation of the Home Loan Protection Act [58-21A-1 NMSA 1978];
(24) originate a residential mortgage loan that does not require documentation and consideration of the borrower's reasonable ability to repay that loan pursuant to its terms. The borrower's ability to repay shall be demonstrated through reasonably reliable documentation that may include payroll receipts, tax returns, bank records, asset and credit evaluations, mortgage payment history or other similar reliable documentation. The provisions of this paragraph shall not apply to a residential mortgage loan originated pursuant to a government streamline program or a streamline program administered by a government-sponsored enterprise, to a reverse mortgage insured as part of a government program or to loss mitigation activities of a mortgage loan servicer or lender with which the borrower has a current relationship, so long as each of these exceptions, as applicable, provides the borrower with a reasonable, tangible net benefit; or
(25) originate a residential mortgage loan that does not require a determination of the borrower's reasonable ability to pay the costs set forth in this paragraph. In the case of an adjustable rate residential mortgage loan, the reasonable ability to pay shall be determined based on a fully indexed rate and repayment schedule that achieves full amortization over the life of the mortgage loan. The costs, as applicable, to be used in determining the borrower's reasonable ability to pay include principal, interest, real estate taxes, property insurance, property assessments, mortgage insurance premiums and other scheduled long-term monthly debt payments.
D. The director may impose a civil penalty on a mortgage loan originator if the director finds, on the record after notice and opportunity for hearing, that the mortgage loan originator has violated or failed to comply with any requirement of the Mortgage Loan Originator Licensing Act [New Mexico Mortgage Loan Originator Licensing Act] or any rule promulgated by the director pursuant to that act or any order issued pursuant to authority of that act.
E. The maximum amount of penalty for each act or omission described in Subsection C of this section shall be twenty-five thousand dollars ($25,000).
F. Each violation or failure to comply with any directive or order of the director is a separate and distinct violation or failure.