Appendix B to Part 1008 - Engaging in the Business of a Loan Originator: Commercial Context and Habitualness
12:8.0.2.1.9.7.1.1.26 : Appendix B
Appendix B to Part 1008 - Engaging in the Business of a Loan
Originator: Commercial Context and Habitualness
An individual who acts (or holds himself or herself out as
acting) as a loan originator in a commercial context and with some
degree of habitualness or repetition is considered to be “engage[d]
in the business of a loan originator[.]” An individual who acts as
a loan originator does so in a commercial context if the individual
acts for the purpose of obtaining anything of value for himself or
herself, or for an entity or individual for which the individual
acts, rather than exclusively for public, charitable, or family
purposes. The habitualness or repetition of the origination
activities that is needed to “engage in the business of a loan
originator” may be met either if the individual who acts as a loan
originator does so with a degree of habitualness or repetition, or
if the source of the prospective financing provides mortgage
financing or performs other origination activities with a degree of
habitualness or repetition. This appendix provides examples to aid
in the understanding of activities that would not constitute
engaging in the business of a loan originator, such that an
individual is not required to obtain and maintain a state mortgage
loan originator license. The examples in this appendix are not
all-inclusive. They illustrate only the issue described and do not
illustrate any other issues that may arise under part 1008. For
purposes of the examples below, the term “loan” refers to a
“residential mortgage loan” as defined in § 1008.23 of this
part.
(a) Not Engaged in the Business of a Mortgage Loan
Originator. The following examples illustrate when an
individual generally does not “engage in the business of a loan
originator”:
(1) An individual who acts as a loan originator in providing
financing for the sale of that individual's own residence, provided
that the individual does not act as a loan originator or provide
financing for such sales so frequently and under such circumstances
that it constitutes a habitual and commercial activity.
(2) An individual who acts as a loan originator in providing
financing for the sale of a property owned by that individual,
provided that such individual does not engage in such activity with
habitualness.
(3) A parent who acts as a loan originator in providing loan
financing to his or her child.
(4) An employee of a government entity who acts as a loan
originator only pursuant to his or her official duties as an
employee of that government entity, if all applicable conditions in
§ 1008.103(e)(6) of this part are met.
(5) If all applicable conditions in § 1008.103(e)(7) of this
part are met, an employee of a nonprofit organization that has been
determined to be a bona fide nonprofit organization by the state
supervisory authority, when the employee acts as a loan originator
pursuant to his or her duties as an employee of that
organization.
(6) An individual who does not act as a loan originator
habitually or repeatedly, provided that the source of prospective
financing does not provide mortgage financing or perform other loan
origination activities habitually or repeatedly.