W. Va. Code R. § 106-19-4

Current through Register Vol. XLI, No. 36, September 6, 2024

Section 106-19-4 - Approval for Mortgage Bankers and Other Entities to Make Reverse. Mortgage Loans

4.1. Approval Requirements. -- In addition to any other requirements of West Virginia law, authorized lenders must comply with the following requirements before offering reverse mortgage loans.

4.1.a. Every reverse mortgage lender authorized under this rule shall maintain a bond in favor of the Commissioner of Banking in an amount necessary to fund all reverse mortgage loan requirements anticipated over the next twelve months for loans then on the lender's books and those expected to be made over the next twelve months or three million dollars ($3,000,000), whichever is greater. The terms of the bond shall be stated in a manner acceptable to the Commissioner of Banking. The initial term of the bond shall be at least two years; and

4.1.b. The company that provides the bond as required in subdivision 4.1.a of this section may not be affiliated with the lender and shall be authorized to make surety bonds in the state of West Virginia.

4.2. Minimum Capital Requirement. -- The lender shall maintain a minimum capital of five million dollars ($5,000,000).

4.3. Parent Lender Capital Alternative Requirement. -- A lender may rely on the capital of its parent company or institution to satisfy the requirements of subsection 4.2 of this rule. Provided That for any year in which a lender seeks to rely on the capital of its parent company or institution, it shall provide to the Division of Banking a certified financial statement of the parent company or institution showing a net worth of at least fifty million dollars ($50,000,000) as of the close of its most recent fiscal year and a binding written commitment from the parent company or institution to the lender to make a minimum of five million dollars ($5,000,000) available to the lender as a capital contribution in connection with its reverse mortgage lending program.

4.4. Exceptions. B The bonding and minimum capital requirements set forth in subsections 4.1 and 4.2 of this section shall not apply to a lender that:

4.4.a. only originates reverse mortgage loans the proceeds of which are fully disbursed at the loan closing; or

4.4.b. only originates reverse mortgage loans which are structured to provide for the purchase of an annuity with payments made to the mortgagor(s) where:

4.4.b.1. the payments are funded solely by the annuity;

4.4.b.2. the payments commence no more than thirty days after the loan closing; and

4.4.b.3. the reverse mortgage loan principal is comprised only of the cost of the annuity or the payments made to the mortgagor(s) that are funded by the annuity and any financed fees, costs and payments permitted pursuant to section 10 of this rule.

4.5. Application for Authorization-- In addition to the financial requirements set forth in this section, lenders that seek to originate reverse mortgage loans shall apply by letter with return receipt requested together with all required documents to the Commissioner of Banking for authorization to make these loans. In the absence of an adverse notice or a request for supplementary information to the lender by the Division of Banking within sixty days of receipt by the Division of Banking of its letter application and accompanying documents, the lender may commence originating reverse mortgage loans.

This letter application in order to confer valid authorization shall contain the following information and documents as applicable:

4.5.a. the name, address, telephone number, and principal place of business of the lender;

4.5.b. the name of an executive officer responsible for the lender's reverse mortgage loan program;

4.5.c. the basis for any exemptions from the financial requirements set forth in subsections 4.1 and 4.2 of this rule and documentation to support these exemptions;

4.5.d. if no exemption is claimed from subsection 4.1 of this rule, a copy of the bond agreement together with the actual bond;

4.5.e. if no exemption is claimed from subsection 4.2 of this rule, an audited financial statement for the fiscal year most recently ended;

4.5.f. a copy of the report issued by A. M. Best Company for the underwriter of any bond or anticipated annuity;

4.5.g. the designation of the Secretary of State, or where the institution is chartered under federal law, the designation of its primary federal regulatory agency as agent for service of process for any communication concerning a reverse mortgage loan made to a West Virginia resident;

4.5.h. a copy of any trust agreement entered into between the lender and a trustee pursuant to subsection 6.17 of this rule, prior to the trustee holding an annuity which funds any reverse mortgage loan;

4.5.i. the name, address, telephone number, and principal place of business of any trustee and a designation by any trustee of the Secretary of State, or where the trustee institution is chartered under federal law, the designation of its primary federal regulatory agency as agent for service of process for any communication concerning a reverse mortgage loan made to a West Virginia resident; and

4.5.j. any other information and documents as may be requested by the Commissioner of Banking.

W. Va. Code R. § 106-19-4