Kansas State Mortgage Law and Regulation: OSBC Supervision
Kansas state mortgage law and regulation (OSBC supervision)
Kansas regulates mortgage businesses and mortgage loan originators under the Kansas Mortgage Business Act, administered by the Office of the State Bank Commissioner (OSBC). The exam tests licensing, OSBC examination and enforcement, records and reports, bonding and net-worth requirements, and prohibited conduct. NMLS is the application and licensing system; OSBC is the decision-maker.
Core rules
- A mortgage company must hold a Kansas mortgage business license before conducting business; individual originators must hold a Kansas MLO license and be sponsored by a licensed company.
- Licensing is not portable. When an MLO changes sponsoring company, the MLO must update the NMLS record and the new company must sponsor; origination activity before the license is active is unlicensed activity.
- OSBC may examine books and records, require annual reports, investigate complaints, deny, suspend, or revoke licenses, impose fines, and issue cease-and-desist orders.
- Kansas law prohibits fraud, misrepresentation, false advertising, unlicensed activity, and failure to account for funds. Records must be maintained and made available to OSBC.
- Advertisements and business names must be accurate and consistent with the license; using an unapproved name or implying a government affiliation is a violation.
Worked example
An MLO licensed in Kansas leaves Company A on Friday and starts at Company B on Monday. She takes an application Monday before Company B's sponsorship is active in NMLS. Even though her background check and test are valid, she is not licensed to originate for Company B. The correct step is to wait for the sponsorship and license status to show active; the file should not be taken until then.
Traps
Assuming a Kansas license automatically follows the originator to any employer; treating NMLS as the regulator; forgetting to update address, name, or business name; and ignoring state-specific continuing-education or reporting deadlines.