North Carolina’s Secure and Fair Enforcement (S.A.F.E.) Mortgage Licensing Act (“SAFE Act”) governs licensing and conduct of mortgage originators, brokers, and lenders operating in the state and applies statutory caps on lender origination fees.
On July 1, 2025, North Carolina enacted changes to the SAFE Act with the passage of House Bill 762. The bill makes many notable changes that are effective as of October 1, 2025, including:
- New standards for mortgage servicers with portfolios of 2,000 or more residential loans, including a change to capital, governance, and audit requirements.
- Definition of “residential mortgage loan” is expanded encompass reverse mortgages and contracts for deed.
- To be exempt from the SAFE Act as a seller-financer, the maximum number of loans that can be originated per year has been reduced from 5 to 3 or fewer.
- Applicants for a license or registration must now have a principal office in the United States, including branch offices.
- All mortgage lenders and brokers will be required to include a link to NMLS Consumer Access on their websites.
HB 762 also changes the permissible lender fees for subordinate liens under $300,000. Prior to the bill, lender fees on subordinate liens were capped at 1-2% depending on the loan type, for loans under $300,000. This flat percentage cap has been replaced with a new structure. Effective January 2026, for loans with a principal amount under $300,000, the 2% lender fee cap will not apply to a subordinate loan if the total points and fees charged by a lender related to the loan does not exceed:
- The federal points and fees threshold for Qualified Mortgages in Regulation Z; or
- 3% of the total loan amount, whichever is less.
With the changes under North Carolina’s HB 762, the SAFE Act and its permissible fees will more closely align with national lending standards.