Do you remember when you incorporated or created your limited liability company (LLC)? You did a filing with your state’s Secretary of State (some states use other agencies for this filing). If you expanded your territory to include other states, you needed to file for a Certificate of Authority to Transact Business as a foreign corporation or LLC (or a similar name for this document).
Most states have a requirement that you file an annual report with the Secretary of State’s Office or maybe the Franchise Tax Board. The filing times vary by state. The annual reports are designed to let the state know that you are still in existence, that you haven’t changed your registered agent, that you haven’t moved your offices, and that your officers, directors and/or members are still the same. Usually, there is a small fee to be paid. If there are changes, you are supposed to notify the state of those changes. Franchise board filings tend to be just a requirement to send a franchise fee to that state.
The consequences of not filing the annual report can be that you may eventually lose the right to legally transact business in that state and that the fees that are owed will continue to be owed and may incur interest and penalties. This is true even if you have stopped transacting business. it can also jeopardize your ability to renew your licenses.
You must file your annual reports on a timely basis. If you are not sure when you need to file, contact the Secretary of State (or whichever agency is in charge of corporate and LLC filings) or hire an outside company to do the filings for you (either a law firm or company that provides this service). If you have stopped doing business in that state, make sure the proper withdrawal documents are filed with that agency and pay the required fee. If you fail to do this, it could get quite expensive for your company.
Monday, March 28, 2011
Tuesday, March 22, 2011
Getting Annual Report Correspondence to The Right Person
I’ve been writing a lot recently about the annual reports that are due at the beginning of the year. A whole bunch are due at the end of March. This is in addition to or instead of the Mortgage Call Report that will start becoming required at the end of April.
Some states send letters in January or February with log-in information for their online reports. These letters typically go to one of the owners in the mortgage company. Unless the owner is the one who will be preparing the Annual Report or inputting the Annual Report, my experience is that this letter will likely get mislaid. If you are receiving a letter from a banking department about the Annual Report, and you have either appointed someone in your company to prepare and input the Report or are using an outside company or law firm for Annual Report submissions, please forward these letters immediately to that person. If you are now scrambling to find that letter, have your outside company or law firm call the banking department to get them to re-send the letter. Then, send a letter to the banking department, on company letterhead and signed by an owner of the company, requesting that the banking department send all correspondence in the future to your outside company or law firm. It will save you a lot of aggravation and time that you won’t need to spend looking for a letter that you may not understand that you need.
Some states send letters in January or February with log-in information for their online reports. These letters typically go to one of the owners in the mortgage company. Unless the owner is the one who will be preparing the Annual Report or inputting the Annual Report, my experience is that this letter will likely get mislaid. If you are receiving a letter from a banking department about the Annual Report, and you have either appointed someone in your company to prepare and input the Report or are using an outside company or law firm for Annual Report submissions, please forward these letters immediately to that person. If you are now scrambling to find that letter, have your outside company or law firm call the banking department to get them to re-send the letter. Then, send a letter to the banking department, on company letterhead and signed by an owner of the company, requesting that the banking department send all correspondence in the future to your outside company or law firm. It will save you a lot of aggravation and time that you won’t need to spend looking for a letter that you may not understand that you need.
Tuesday, March 15, 2011
What Does a Mortgage Loan Originator Do If He Has a Criminal Conviction in His Past?
I’ve been receiving phone calls from mortgage loan originators from different states, asking what they should do if they have a criminal conviction in their past. The federal SAFE Act, enacted in 2008, provided minimum standards for the licensing of mortgage loan originators. Included in those requirements is a blanket prohibition on applicants who have been convicted of, pled guilty, or pled nolo contendere (no contest) to a felony if the felony was a crime involving fraud, dishonesty, breach of trust, or money laundering. There is a seven-year disqualification if the felony conviction was for any other type of crime.
If you have been denied approval of your mortgage loan originator license application because of a criminal conviction in your past, you have a couple of options. The first is that you can challenge your denial. Each state agency who issues decisions on license application has a set of procedures for challenging these decisions. Usually, it involves a hearing before someone else in the same agency or perhaps a hearing in front of an administrative judge. The procedures differ for each state. If you wish to challenge the denial of your license application, you must follow the rules for that agency. If you will be hiring a lawyer to represent you, you want to hire a lawyer who practices administrative law in the state in which the licensing agency exists. If your license was denied by the Massachusetts Division of Banks, you need a Massachusetts-licensed attorney. If your license was denied by the Illinois Department of Financial and Professional Regulation, you must hire an Illinois-licensed lawyer. If there are time limits for filing a challenge, you must not delay filing the challenge. If your challenge is filed too late, it is barred forever.
Your other choice is to try to find employment with a depository institution as the SAFE Act has different rules for mortgage loan originators employed by banks. If your felony conviction is for a dishonesty crime, you may never be a loan originator again.
If you have been denied approval of your mortgage loan originator license application because of a criminal conviction in your past, you have a couple of options. The first is that you can challenge your denial. Each state agency who issues decisions on license application has a set of procedures for challenging these decisions. Usually, it involves a hearing before someone else in the same agency or perhaps a hearing in front of an administrative judge. The procedures differ for each state. If you wish to challenge the denial of your license application, you must follow the rules for that agency. If you will be hiring a lawyer to represent you, you want to hire a lawyer who practices administrative law in the state in which the licensing agency exists. If your license was denied by the Massachusetts Division of Banks, you need a Massachusetts-licensed attorney. If your license was denied by the Illinois Department of Financial and Professional Regulation, you must hire an Illinois-licensed lawyer. If there are time limits for filing a challenge, you must not delay filing the challenge. If your challenge is filed too late, it is barred forever.
Your other choice is to try to find employment with a depository institution as the SAFE Act has different rules for mortgage loan originators employed by banks. If your felony conviction is for a dishonesty crime, you may never be a loan originator again.
Monday, March 7, 2011
Do You Still Need to File an Annual Report?
Once upon a time, just about every state required its own form of Annual Report. Most of them were due in the first 4 months of each year. Recently, the Nationwide Mortgage Licensing System sent out an email that functionality for a Mortgage Call Report that would be required quarterly, starting in April, 2011. Does this mean that you are not required to file an Annual Report?
The short answer is that it depends on in which state you are licensed. Most states which had required annual report filing still have the same requirements as in previous years. Some of the questions have changed but most of the reports that I have seen so far look quite similar to past years’ reports.
The Mortgage Call Report is required by the SAFE Act and will be a report that is in addition to the Annual Report that may still be required. All states will be requiring that you complete the Mortgage Call Report. But not all states require an Annual Report. You must check with your state agency that oversees your license if you are not sure that you need to file an Annual Report. Be aware that most Annual Reports also require financial statement reporting so you may need to get your accountant on top of this requirement immediately. You should also be aware that one (1) Mortgage Call Report will be sufficient for all states in which you are licensed.
There is plenty of aid out there to help you get your information organized and inputted on the Annual Report form so that your filing is timely. You really do not want to be late. The penalty may exceed the cost of hiring someone to help you.
The short answer is that it depends on in which state you are licensed. Most states which had required annual report filing still have the same requirements as in previous years. Some of the questions have changed but most of the reports that I have seen so far look quite similar to past years’ reports.
The Mortgage Call Report is required by the SAFE Act and will be a report that is in addition to the Annual Report that may still be required. All states will be requiring that you complete the Mortgage Call Report. But not all states require an Annual Report. You must check with your state agency that oversees your license if you are not sure that you need to file an Annual Report. Be aware that most Annual Reports also require financial statement reporting so you may need to get your accountant on top of this requirement immediately. You should also be aware that one (1) Mortgage Call Report will be sufficient for all states in which you are licensed.
There is plenty of aid out there to help you get your information organized and inputted on the Annual Report form so that your filing is timely. You really do not want to be late. The penalty may exceed the cost of hiring someone to help you.
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