Commissioner approval is required when more than 25% ownership of a licensed or registered entity is conveyed.  Ownership here refers to both direct ownership, and indirect ownership up to two tiers.  More than 25% of the outstanding voting stock of a company includes accumulation of all changes that have been made to ownership since the license or registration was issued, based upon the information provided in the original application, or since the last transfer.  For example, separate changes of 10%, then 15%, then 5% would require consent when the cumulative total is expected to total more than 25%.  In this example, approval must be obtained before the last 5% change is transacted.  When change in ownership is expected to occur, persons in the company can determine appropriate actions by reviewing the law under which the license or registration is authorized.

A transfer of a license or registration requires the approval of the Office of Financial and Insurance Regulation Commissioner.  Follow procedures according to the situation and authorizing statute.

First Mortgage License:  Section 9 of the Mortgage Brokers, Lenders and Servicers Licensing Act, Public Act 173 of 1987 requires prior approval by the Commissioner for transfer of a license.  A registration is not transferable.  That section states:

“A license shall not be transferred or assigned without the consent of the commissioner.  The sale, transfer, assignment, or conveyance of more than 25% of the outstanding voting stock of a licensee which is a corporation, or more than 25% of the interest in a licensee which is a partnership or other unincorporated association, shall be considered to a transfer of the license.  A registration shall not be transferred or assigned.”

First Mortgage Registration:  A registration issued under the authority of this act is not transferable.  A new registration must be obtained when more than 25% of the ownership is conveyed for any reason by providing a registration application with appropriate fees. (Refer to the statute quoted above.)

Second Mortgage License and Registration:  Section 13 of the Secondary Mortgage Loan Act, Public Act 125 of 1981 requires the Commissioner’s approval prior to transfer of a license or registration.  The pertinent portion of Section 13 states:

“(2) A person shall not transfer or assign a license or registration without the consent of the commissioner.  The sale, transfer, assignment, or conveyance of more than 25% of the outstanding voting stock of a licensee or registrant that is a corporation, or more than 25% of the interest in a licensee or registrant that is a limited liability company or partnership or other unincorporated legal entity is considered a transfer of the license or registration for purposed of this subsection.”

Transfer Instructions

Pre-notification is necessary for the purpose of requesting the commissioner’s approval of a direct or indirect change in ownership.  File transfer requests on Pre-Notification Forms MU1 and MU2 with the proposed new owners and information. These forms are located on the OFIR website www.michigan.gov/ofir  Licensing>Mortgage Brokers, Lenders, and Servicers>Once You Are Licensed.  After the pre-notification is approved, you will record changes on NMLS to the Direct Owners and Executive Officers section and Indirect Owners section of MU1 and the individual owner records on the MU2, as applicable.  More detailed information is provided below.

When is an Investigation Required?

• If licensee proposes to transfer voting stock or other types of ownership to new persons or companies, an investigation of these persons is required.
• If licensee proposes an internal change of persons presently holding ownership in the company, which do not include new persons, there is no investigation.
• An investigation is not made of on a registration.

Proposed New Owners Forms

For the transfer of a first mortgage license, second mortgage license, or second mortgage registration to new ownership, the company completes applicable pages of Pre-Notification Form MU1 and each proposed new owner completes Pre-Notification Form MU2, which is located on the OFIR website www.michigan.gov/ofir. 

Resignation of Shareholders

If a transfer is the result of a resigning shareholder, and there are no other changes to the first mortgage license, second mortgage license, or second mortgage registration, a written request to transfer is sent directly to OFIR with copies of the resignation, cancelled stock certificates, or other form of evidence of the change.

Cost to Transfer

The following fees are sent directly to OFIR along with the Pre-Notification Forms.

• $450.00 investigation fee when there are new owners for a first or second mortgage licensee who will be investigated;
• $50.00 transfer fee for each certificate when there are no new owners for a first or second mortgage licensee;
• $50.00 transfer fee for a second mortgage registration;
• First mortgage registrants submit a new registration application and fees directly to OFIR, because a first mortgage registration is not transferable.

Return License/Registration Certificate

Return the license and/or registration certificate containing the Commissioner’s signature, and the gold seal or watermark directly to OFIR.

Publicly Held Companies

provide information that will assist in the investigation, such as, a statement describing the nature of the business, financial information such as an audited financial statement, and a 10-K or an annual report, plus a listing of persons holding 20% or more total ownership.  Send this information directly to OFIR.

Evidence of New Ownership

OFIR will notify licensee or registrant of approval.  Send evidence of the new ownership, such as a copy of the amended operating agreement, cancelled and new stock certificate(s), or purchase agreements directly to OFIR when the transaction is completed.  When the Pre-Notification is approved by OFIR, file the new ownership information as well as any other change in control persons through the NMLS system.  No fee will be collected for these changes through NMLS.  A new license or registration certificate will be issued and mailed to the licensee or registrant.

Filing a transfer through NMLS does not authorize you to conduct business with the changes(s) requested.  You will receive authorization from the Consumer Finance Licensing Unit before the business is authorized to operate with the change(s) requested.  A new certificate will be issued and mailed to the licensee or registrant.

Items are sent to OFIR at the address below:
Office of Financial and Insurance Regulation
Consumer Finance Licensing Unit
PO Box 30220
Lansing, MI 48909-7720
Or for overnight delivery:
Office of Financial and Insurance Regulation
Consumer Finance Licensing Unit
611 W. Ottawa Street – 3rd floor
Lansing, MI 48933
Questions pertaining to the completion of a transfer request may be directed to the Consumer Finance Licensing Unit at (877) 999-6442.