NAC645B.038. Insider loans: Limitations and conditions.


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  •      1. Insider loans made or arranged by a mortgage broker are subject to the following limitations and conditions:

         (a) The lending limit must not exceed 25 percent of the total dollar amount of the outstanding balances of investor-funded loans which were made or arranged by the mortgage broker or 100 percent of the mortgage broker’s net worth as described in NAC 645B.095, whichever is greater.

         (b) An investor, other than a financial or institutional investor, who funds an insider loan may not waive the provisions of subsection 1 of NAC 645B.080.

         (c) If the investor is a company, the information required by subsection 1 of NAC 645B.080 must be provided to the investor for distribution to any person who has control of the company. For purposes of this paragraph, a person shall be deemed to have control of the company if the person:

              (1) Is an executive officer or director of the company;

              (2) Directly or indirectly owns or controls more than 25 percent of any voting shares; or

              (3) Exercises a controlling influence over the management or policies of the company.

         (d) The mortgage broker shall specifically identify on each monthly report required by NRS 645B.080 any insider loan made by the mortgage broker.

         2. As used in this section:

         (a) “Company” means any form of business entity other than a natural person.

         (b) “Financial or institutional investor” has the meaning ascribed to it in NRS 90.240.

         (c) “Insider” means a director, officer, mortgage agent or employee of a mortgage broker.

         (d) “Insider loan” means an extension of credit to an insider. For purposes of this paragraph, “extension of credit” includes, without limitation, a new loan or a loan renewal, a line of credit or any other financial right structured in any manner and arranged by a mortgage broker as a means for the borrower to defer payment on an existing debt or to incur a debt and defer immediate payment.

         (e) “Lending limit” means the maximum dollar amount permitted for the aggregate of insider loans arranged by a mortgage broker.

     (Added to NAC by Comm’r of Mortgage Lending by R056-08, eff. 4-23-2009)