MA Amends Provisions Regarding the Licensing of Mortgage Lenders and Mortgage Brokers
The Massachusetts Office of Consumer Affairs and Business Regulations/Division of Banks (DOB) recently amended its licensing provisions. This includes new licensure exemptions and an update on the definition of the term “mortgage broker”, among other changes.
The DOB has elaborated on the definition of a “mortgage broker”. The licensing provisions now describe a mortgage broker as, among other things, an individual that collects and transmits information related to a prospective mortgage loan borrower to a third party and in addition conducts one or more of the following activities: (i) collects a prospective borrower’s Social Security Number; (ii) views a prospective borrower’s credit report; (iii) gains a prospective borrower’s authorization to access or view the prospective borrower’s credit report or credit score; (iv) accepts an application, as defined under 12 CFR § 1026.2(a); or (v) issues a prequalification letter.
The amended licensing provisions also now list some individuals and entities that will fall under licensing exemptions, meaning that they are not required to be licensed as a mortgage broker or mortgage lender. These, among others, include: (i) Bona fide nonprofit affordable homeownership organizations; (ii) mortgage lenders making fewer than five mortgage loans within any period of twelve consecutive months, with certain conditions; (iii) Banks as defined by G.L. c. 167, §1, national banking associations, federally chartered credit unions, federal savings banks, or any subsidiary or affiliate of the above; (iv) insurance companies; (v) banks, trust companies, savings banks, and credit unions organized under the laws of any other states, provided that such provisions would apply to any subsidiary or affiliate, and (vi) persons whose activities are limited to collecting and transmitting one or more of the following types of information regarding a prospective mortgage loan borrower to a third party: (i) contact information, (ii) property street address or zip code, (iii) property type or use, (iv) estimated credit score or estimated home value, (v) foreclosure or bankruptcy history, (vi) veteran or military status, (vii) status as a current FHA loan borrower, (viii) estimated cash out from refinance, and (ix) estimated home mortgage loan payoff amount.
Notwithstanding the exemption for persons exclusively collecting and transmitting such information, any person that collects and transmits any information about a prospective mortgage loan borrower to a third party and receives compensation (or expects to) based on that borrower in fact attaining a mortgage loan from a third party, is required to be licensed as a mortgage broker.
