Contents 454F-1 Definitions 454F-1.5 Registration with NMLS required 454F-1.6 Presumption of control 454F-1.7 Duties of a mortgage loan originator company's qualified individual and branch manager 454F-1.8 Sponsorship by mortgage loan originator company, exempt sponsoring mortgage loan originator company, 454F-2 Exemptions 454F-2.5 Exempt sponsoring mortgage loan originator company; registration 454F-3 Requirement of licensure 454F-4 License and registration; application; issuance 454F-4.5 Automatic secondary review of license application 454F-4.8 Decision denying application subject to administrative hearing 454F-4.9 Abandoned applications 454F-5 Issuance of license 454F-6 Pre-licensing and re-licensing; education of mortgage loan originators 454F-7 Testing of mortgage loan originators 454F-8 Standards for license renewal 454F-8.5 Reinstatement of expired licenses 454F-9 Continuing education; mortgage loan originators 454F-10 Authority to require license 454F-10.5 Authorized places of business; designation of qualified individuals and branch managers; branch offices; 454F-10.6 Voluntary cessation of operation; surrender of license 454F-10.7 Change in control of a licensee; fees 454F-11 NMLS registry information; challenge process 454F-12 Enforcement authorities; violations; penalties 454F-13 Repealed 454F-14 Confidentiality 454F-15 Investigation and examination authority 454F-16 Mortgage call reports 454F-17 Prohibited practices 454F-18 Powers of commissioner 454F-19 Unique identifier shown 454F-20 Report to NMLS 454F-21 Repealed 454F-22 Mortgage loan originator, mortgage loan originator company, exempt sponsoring mortgage loan 454F-23 Payment of fees 454F-24 Mortgage servicer companies; mortgage loan originators 454F-25 Nonprofit organizations; mortgage loan originators 454F-26 Repealed 454F-41 Mortgage loan recovery fund; use of fund; fees 454F-42 Statute of limitation; recovery from fund 454F-43 Management of fund 454F-44 Standing 454F-45 Subrogation of rights 454F-46 Waiver of rights 454F-47 Disciplinary action against licensee



Revision Note


  Sections 454F-1 to 454F-26 designated as Part I pursuant to §23G-15.


     §454F-1  Definitions.  In this chapter, unless the context or subject matter otherwise requires:

     "Advertisement" or "advertising" means:

     (1)  Issuing any card, sign, or device to any person;

     (2)  Causing, permitting, or allowing the placement of any sign or marking on or in any building, vehicle, or structure;

     (3)  Placing an advertisement in any newspaper, magazine, or on the Internet;

     (4)  Listing or advertising in any directory under a classification or heading that includes the words "mortgage loan originator", "mortgage loan originator company", or the like;

     (5)  Broadcasting commercials by airwave or internet transmission; or

     (6)  Transmitting any written communication, including:

         (A)  A letter or a postcard that encourages a person to borrow from or through a mortgage loan originator or a mortgage loan originator company; or

         (B)  A written communication that encourages a person to refinance the person's existing residential mortgage loan and mentions that a new residential mortgage loan will reduce the monthly payment the borrower will pay on the new residential mortgage loan or reduce the interest rate on the borrower's existing residential mortgage loan.

     "Applicant" means a person applying for the issuance of a license or a renewal of a license under this chapter.

     "Borrower" means a person who has applied for or obtained a residential mortgage loan from or through a licensed mortgage loan originator or mortgage loan originator company or from a person required to be licensed as a mortgage loan originator or mortgage loan originator company under this chapter.

     "Branch manager" means an individual who is designated and employed by a mortgage loan originator company to be responsible for the activities in the conduct of business of the licensed mortgage loan originator company's branch office or principal place of business, in conducting the business of that mortgage loan originator company's branch office or principal place of business.

     "Branch office" means any location in this State that is identified by any means to the public or customers as a location at which the licensee holds itself out as a mortgage loan originator company.

     "Clerical or support duties" include the following activities subsequent to the receipt of an application:

     (1)  The receipt, collection, distribution, and analysis of information for the processing or underwriting of a residential mortgage loan; and

     (2)  Communication with a borrower to obtain the information necessary for the processing or underwriting of a loan, to the extent that the communication does not include offering or negotiating loan rates or terms or counseling borrowers about residential mortgage loan rates or terms.

     "Commissioner" means the commissioner of financial institutions.

     "Control" means the power, either directly or indirectly, to direct management or policies of a company, whether through ownership of securities, by contract, or otherwise.

     "Control person" means an individual who directly or indirectly exercises control over a licensee or applicant.

     "Division" means the division of financial institutions of the department of commerce and consumer affairs.

     "Elder" means an individual who is sixty-two years of age or older.

     "Employee" means an individual who is:

     (1)  Hired to provide services for a licensee on a regular basis in exchange for compensation and who does not provide these services as part of the individual's independent business;

     (2)  Subject to tax withholding, the Federal Income Contributions Act, and other lawful deductions by the licensee as a condition of employment; and

     (3)  Subject to the right of the licensee to direct and control the actions of the individual.

     "Exempt registered mortgage loan originator" means any individual who:

     (1)  Meets the definition of mortgage loan originator and is an employee of:

         (A)  An insured depository institution; or

         (B)  An institution regulated by the Farm Credit Administration; and

     (2)  Is registered with, and maintains a unique identifier through, NMLS but is not required to be licensed under this chapter.

     "Exempt sponsoring mortgage loan originator company" means any person exempt from or not included in the licensing requirements of this chapter who registers with NMLS for purposes of sponsoring a mortgage loan originator.

     "Federal banking agencies" means the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Office of Thrift Supervision, the National Credit Union Administration, and the Federal Deposit Insurance Corporation.

     "Housing finance agency" means any authority, including any nonprofit organization:

     (1)  That helps meet the affordable housing needs of the residents of the State;

     (2)  That is supervised directly or indirectly by the State;

     (3)  That is subject to audit and review by the State; and

     (4)  Whose activities make it eligible to be a member of the National Council of State Housing Agencies.

     "Immediate family member" means a spouse, child, sibling, parent, grandparent, grandchild, stepparent, stepchild, stepsibling, and equivalent adoptive relationships.

     "Independent contractor" means any person who has a contractual arrangement to perform mortgage loan originating, underwriting, or loan processing services to a licensee, but is not an employee of a licensee.

     "Individual" means a natural person.

     "Insured depository institution" means the same as in 12 United States Code section 1813(c)(2); provided that it also includes any credit union.

     "License" means a license issued under this chapter.

     "Licensee" means a mortgage loan originator, a mortgage loan originator company, a mortgage servicer company, unless exempt under chapter 454M, or a person who is licensed under this chapter.  Licensee does not include an exempt registered mortgage loan originator, exempt sponsoring mortgage loan originator company, or nonprofit organization as defined by this section.

     "Loan modification" means a temporary or permanent change to the terms of a borrower's existing loan agreement, mutually agreed to between a borrower and a lender.

     "Loan processor or underwriter" means an individual who performs clerical or support duties as an employee at the direction of and subject to the supervision and instruction of a person licensed or exempt from licensing under this chapter.

     "Mortgage call report" means a single report of condition that each licensee may be required to submit to NMLS.

     "Mortgage loan originator":

     (1)  Means an individual who for compensation or gain or in the expectation of compensation or gain:

         (A)  Takes a residential mortgage loan application; or

         (B)  Offers or negotiates terms of a residential mortgage loan; and

     (2)  Includes an independent contractor as defined in this section.

     "Mortgage loan originator company" means:

     (1)  An individual not exempt under section 454F-2 who engages in the business of a mortgage loan originator as a sole proprietorship; or

     (2)  A person not exempt under section 454F-2 who employs or contracts for the services of one or more mortgage loan originators licensed or required to be licensed under this chapter.

     "Mortgage servicer company" means a mortgage servicer company licensed, or required to be licensed, under chapter 454M that conducts mortgage loan origination activity.

     "NMLS" means a mortgage licensing system developed and maintained by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators for the state licensing and registration of state-licensed loan originators and other financial services providers, or any system provided by the Consumer Financial Protection Bureau.

     "Nonprofit organization" means an organization that:

     (1)  Has the status of a tax-exempt organization under section 501(c)(3) of the Internal Revenue Code of 1986, as amended;

     (2)  Promotes affordable housing or provides homeownership education or similar services;

     (3)  Conducts its activities in a manner that serves public or charitable purposes, rather than commercial purposes;

     (4)  Receives funding and revenue and charges fees in a manner that does not incentivize it or its employees to act other than in the best interests of its clients;

     (5)  Compensates its employees in a manner that does not incentivize employees to act other than in the best interests of its clients; and

     (6)  Provides, or identifies for the borrower, residential mortgage loans with terms favorable to the borrower and comparable to mortgage loans and housing assistance provided under government housing assistance programs.

     "Nontraditional mortgage product" means any mortgage product other than a thirty-year fixed rate residential mortgage loan where the interest rate is fixed for the thirty-year term.

     "Offers or negotiates terms of a residential mortgage loan" means:

     (1)  Presents for consideration by a borrower or prospective borrower particular residential mortgage loan terms;

     (2)  Communicates directly or indirectly with a borrower or prospective borrower for the purpose of reaching a mutual understanding about prospective residential mortgage loan terms; or

     (3)  Takes or gathers information from a borrower or prospective borrower for the purpose of recommending, referring, or steering that borrower or prospective borrower directly or indirectly to a particular lender or set of residential mortgage loan terms, in accordance with a duty to or incentive from any person other than the borrower or prospective borrower.

     "Person" means an individual, sole proprietorship, partnership, corporation, limited liability company, limited liability partnership, or other association of individuals, however organized.

     "Principal office" means the office location where the company's core executive and administrative functions are primarily carried out.

     "Principal place of business" means a mortgage loan originator company's main office location in this State that is identified by any means to the public or customers as a location at which the licensee holds itself out as a mortgage loan originator company.

     "Qualified individual" means an individual who is responsible for the oversight of mortgage loan originators that are employed by or contracted to perform work for a mortgage loan originator company.

     "Real estate brokerage activity" means any activity that involves offering or providing real estate brokerage services to the public, including:

     (1)  Acting as a real estate agent or real estate broker for a buyer, seller, lessor, or lessee of real property;

     (2)  Bringing together parties interested in the sale, purchase, lease, rental, or exchange of real property;

     (3)  Negotiating on behalf of any party, any portion of a contract relating to the sale, purchase, lease, rental, or exchange of real property other than in connection with providing financing with respect to any such transaction;

     (4)  Engaging in any activity for which a person is required to be registered or licensed as a real estate agent or real estate broker by the State; and

     (5)  Offering to engage in any activity, or act in any capacity, described in [paragraph] (1), (2), (3), or (4).

     "Regular business hours" means Monday through Friday, between the hours of 8:00 a.m. and 4:30 p.m., excluding state holidays.

     "Residential mortgage loan" or "residential mortgage transaction" means any loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling as defined in section 103(v) of the Truth in Lending Act, 15 United States Code section 1602 or residential real estate.

     "Residential mortgage loan modification" means:

     (1)  Modification of existing residential mortgage loans which generally includes a change in interest, principal, or term of loan; or

     (2)  The processing of the approval of loan assumptions.

"Residential mortgage loan modification" does not include origination of mortgage loans.

     "Residential real estate" means any real property located in this State, upon which a dwelling is constructed or intended to be constructed.

     "Sole proprietorship" means a mortgage loan originator business that is solely and personally owned and operated by an individual mortgage loan originator, and where there is no legal distinction between the individual business owner and the business.

     "Sponsor" means to:

     (1)  Create a relationship through NMLS; and

     (2)  Appropriately supervise a mortgage loan originator's activities.

     "Taking a residential mortgage loan application" means receipt of a request or of a response to a solicitation of an offer from a borrower, either directly or indirectly, for the purpose of deciding whether or not to extend an offer of a loan to the borrower.  Taking a residential mortgage loan application does not include mere physical handling or transmission of a form.

     "Unique identifier" means a number or other identifier assigned by protocols established by NMLS. [L Sp 2009, c 32, pt of §2; am L 2010, c 84, §8; am L 2011, c 194, §2; am L 2012, c 252, §2; am L 2013, c 168, §2; am L 2014, c 9, §6 and c 198, §1]