N.Y. Comp. Codes R. & Regs. tit. 3 § 418.9

Current through Register Vol. 46, No. 25, June 18, 2024

Section 418.9 - Revocation, suspension, termination and surrender of registration

(a)Grounds for revocation. The Superintendent may revoke any registration to engage in the business of servicing mortgage loans issued pursuant to this Part if he or she shall find that:

1. The MLS has violated any applicable provision of Article 12-D of the Banking Law, any applicable rule or regulation promulgated under Article 12-D of the Banking Law or any other law, rule or regulation of New York State or the federal government pertaining to Servicing Mortgage Loans;

2. Any fact or condition exists which, if it had existed at the time of the original application for such registration, would have warranted the Superintendent in refusing originally to issue such registration; or

3. The MLS has committed a crime under the laws of New York or any other state or of the United States involving moral turpitude or fraudulent or dishonest dealing, or a final judgment has been entered against the MLS in a civil action on grounds of fraud, misrepresentation or deceit.

(b)Suspension without hearing; termination.

1. The Superintendent may, without notice or a hearing, for good cause or where there is a substantial risk of public harm, issue an order suspending any registration or delete the name of any registrant for a period not exceeding thirty days, pending investigation. ''Good cause'', as used in this subdivision, shall exist when the registrant has defaulted or is likely to default in performing its financial engagements or engages in dishonest or inequitable practices which may cause substantial harm to the Persons afforded the protection of article 12-D of the Banking Law.

2. Any mortgage servicing registration may be suspended by order of the Superintendent, without notice or a hearing, upon the registrant's failure to pay the required assessment charged pursuant to Section 17 of the Banking Law upon the date or dates such payment or payments are due. Such registration shall be reinstated if the registrant pays such assessment charged and any applicable late fees.

3. The Superintendent, in his or her sole discretion, without notice or a hearing, may issue an order suspending any registration issued pursuant to this Part:

(i) thirty days after the date the registrant fails to file any report required to be filed by it with the Superintendent pursuant to the authority provide by this Part;

(ii) immediately upon any required surety or other bond being canceled or expiring, if the registrant has not provided the Superintendent with proof of a replacement bond satisfactory to the Superintendent;

(iii) immediately upon filing by the registrant of a petition in bankruptcy; or

(iv) thirty days after the registrant has had filed against it a petition in bankruptcy.

If the Superintendent has issued an order suspending a registration pursuant to this subparagraph (b)(3), such registration may be reinstated, if the Superintendent determines, in his or her sole discretion, that the registrant has cured all deficiencies set forth in such order.

(c)Suspension after hearing; revocation. Except as provided in paragraph (b) of this subpart, a registration of an MLS may be revoked or suspended only after notice and a hearing as provided in Supervisory Procedure G 111. Any hearing held pursuant to the provisions of this Part shall be noticed, conducted and administered in compliance with the State Administrative Procedure Act. Any order of suspension issued after notice and a hearing may include as a condition of reinstatement that the MLS make restitution of fees or other charges which have been improperly charged or collected, and of any funds that have been received by the MLS and not been properly and timely paid or credited to the proper Person, as determined by the Superintendent.

(d)Surrender of registration. With the prior approval of the Superintendent, any MLS may surrender its registration by delivering to the Superintendent written notice that it thereby surrenders such registration, but such surrender shall not affect the civil or criminal liability of an MLS for acts committed prior to such surrender.

(e)Effect of suspension, revocation, etc. No revocation, termination, suspension or surrender of any registration shall impair or affect the obligation of any pre-existing lawful contract between the MLS and any Person.

(f)Duration of registration. Every registration issued pursuant to this Part shall remain in force and effect until the same shall have been surrendered, revoked, terminated or suspended in accordance with any other provisions of this Part, but the Superintendent shall have authority to reinstate a suspended registration or to issue a new registration to an MLS whose registration shall have been revoked if no fact or condition then exists which would have warranted the Superintendent in refusing originally to issue such registration under this Part.

(g)Order revoking or suspending registration. Whenever the Superintendent shall revoke or suspend a registration, he or she shall forthwith execute in duplicate a written order to that effect. The Superintendent shall file one copy of such order in the office of the Department and shall serve the other copy upon the MLS.

(h) In the event that the registration of an MLS shall be suspended, revoked, terminated or surrendered, such MLS shall immediately cease accepting any additional New York Mortgage Loan Servicing business. In the event of any revocation, termination or surrender, such MLS shall within ninety days thereof transfer its New York Mortgage Loan Servicing business to a successor MLS reasonably acceptable to the Superintendent.

N.Y. Comp. Codes R. & Regs. Tit. 3 § 418.9

Adopted New York State Register July 17, 2019/Volume XLI, Issue 29, eff. 7/17/2019