STATE OF SOUTH DAKOTA

Is a license required?

Yes.  A loan modification service must be licensed as a mortgage broker

South Dakota Code 54-14(Attached as Schedule A)-13 states that “License required for mortgage lenders, mortgage brokerage, mortgage brokers, and mortgage loan originators--Identification through nationwide mortgage licensing system and registry. No person may act as a mortgage lender, mortgage brokerage, mortgage broker, or mortgage loan originator in this state or use the title, mortgage lender, mortgage brokerage, mortgage broker, or mortgage loan originator with respect to any property located in South Dakota without first obtaining and maintaining a license according to the requirements of this chapter. Each person shall be licensed or registered, and maintain a unique identifier through the nationwide mortgage licensing system and registry.”

SDCL 54-14-12 states that a mortgage broker is  “any person who, for compensation or gain, acts as an intermediary between borrower and lender to assist a person in obtaining or applying to obtain a mortgage loan or holds himself, herself, or itself out as being able to assist a person in obtaining or applying to obtain a mortgage loan.”

State specific loan modification law?

None.

Advantages of becoming a licensed Mortgage Broker?

None.  It is required.

Penalties for operating in the state without a license:

54-14-25.1 states that “The director may impose a civil penalty in an amount not to exceed one thousand dollars upon any person acting as a mortgage lender, mortgage brokerage, mortgage broker, or mortgage loan originator in this state without the required license or registration. Each instance of operating without a license, or holding oneself out as being authorized to conduct the business authorized by this chapter, constitutes a separate violation of this chapter and subjects any such person to a civil penalty for each violation. A civil penalty for a series of violations may not exceed twenty-five thousand dollars.”

Is an advanced fee permitted?

There is no explicit prohibition on charging advance fees.

Is a written agreement required?

There is no explicit requirement for a written contract, however the law makes reference to requirements for the contract, implying that one is needed.

Other noteworthy information?

South Dakota Code

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South Dakota Code 54-14:                               Ctrl + Click Here

License application:                                         Ctrl + Click Here