Efficient L.O.E

ACN : Advance Change Notice

Efficient L.O.EDid you know you could potentially lose your mortgage broker license, or mortgage lender license, by improperly changing the address of your mortgage company? In fact, any incorrectly amended material change to the structure of your business, varying from the information registered to the NMLS at the time of your original mortgage license approval, is a violation of statute and regulation. The results of these poorly amended updates could be devastating to your mortgage business. By properly implementing an Advanced Change Notice [ACN], you can avoid a few embarrassing dings on your corporate reputation.

Here are a few tips on how you can avoid future pot holes in your road to success:

Advance Change Notice

Well, first, let’s talk about what specific information requires an Advanced Change Notice [ACN].

If you’re thinking about changing the legal name of your company, or perhaps adding a trade name, be sure to give enough time to submit an ACN before expecting any business to take place under those names. Other changes requiring an ACN are: additions, modifications, and deletions to trade names, the main (corporate) office address [or a branch address], the legal status of your business, changes in affiliates or subsidiaries, changes in direct/indirect owners and executive officers, and any changes in your qualifying individuals.

Revisions, requested by one or more regulators, to any of the afore mentioned items, will require an Advanced Change Notice. In fact, any time information in your business record changes, such as when an owner or officer leaves your company, etc., the states will require a submission of an ACN. Even simple changes, such as updates to your disclosure questions, could have devastating results if a prior ACN has not been submitted with ample time given for approval.

When does my ACN need to be submitted?

If you haven’t joined MLG’s reliable team of License Specialists this year, an ACN could definitely be a new reason to fix your business, by becoming a part of our exclusive licensing services. Instead of doing all the research yourself, or failing to update your address out of fear of losing your license, join MLG!

Notify your Company License Specialist 90 – 120 days before the expected dates of change, and let them know what you’d like to do with your business. By giving enough notice to your specialist, regarding your address/officer changes, you are saving your company from many disruptions in the pipeline, as well as saving a long conversation with regulatory agencies. Our team works together to be sure you have everything you need for any and all changes you’d like to make to your company.

What happens if I don’t use an ACN?

Failing to give a proper notice of change to the structure of your Mortgage Company, or branch, could result in a catastrophe. Failing to provide an ACN is a violation of statute and regulation. Any violation has the potential to cost your company fines, reportable disclosures, and even the possibilities of revocation of your mortgage license(s). Not only would this put a halt on the achievement of your goals, the inconvenience of being restricted from profits driven by the potential of your own company is maddening. After all, a reputation can take years to refine and only 1 second to completely destroy.

What are some examples?

It’s easy to list items requiring an ACN, but what about the details? If you’re planning on moving suite locations for a branch, and expect to move into the suite by a given date, failure to let your team know you’re moving will have your paying rent for 2-3 months, without being able to do any business in your new suite. Who wants to waste anything on empty space when you have borrowers to satisfy? You can definitely count an MLG client, with a proper ACN, out!

Typically, anyone who owns more than 10% of your company must be disclosed on the NMLS. Well, if your company has 5 owners who own 9% of your company and decide to sell the combined portions to one person, this person now owns 45% of your company. Now, this new owner must be disclosed as a partial owner prior to the transaction. Failure to notify regulators of such a drastic update will definitely have an impact on your mortgage license(s), as well as your mortgage company’s reputation over all.

Background checks and credit reports are key factors in determining character and fitness for an officer. A proper ACN for any changes in owners and officers helps the regulators protect your borrowers. The regulator may find hidden details about the additional partner you may be trusting to handle half of your company’s assets. Given state specific regulatory guidelines, the regulators will thoroughly examine each ACN, and determine whether the change will keep your company compliant with the laws and assure the safety of your borrowers.

The Mortgage Licensing Group, Inc. is a full-service mortgage licensing firm headquartered in Southern California that is recognized throughout the industry as an experienced and reliable service provider. Established in 2006, our company has been on the forefront of the ever-changing rules and regulations, helping alleviate the often daunting task of meeting the diverse state licensing requirements for our clientele.