Appendix C to Part 1008 - Independent Contractors and Loan Processor and Underwriter Activities That Require a State Mortgage Loan Originator License
12:8.0.2.1.9.7.1.1.27 : Appendix C
Appendix C to Part 1008 - Independent Contractors and Loan
Processor and Underwriter Activities That Require a State Mortgage
Loan Originator License
The examples below are designed to aid in the understanding of
loan processing or underwriting activities for which an individual
is required to obtain a S.A.F.E. Act-compliant 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) An individual who is a loan processor or underwriter who
must obtain and maintain a state loan originator license
includes:
(1) Any individual who engages in the business of a loan
originator, as defined in § 1008.103 of this part;
(2) Any individual who performs clerical or support duties and
who is an independent contractor, as those terms are defined in §
1008.23;
(3) Any individual who collects, receives, distributes, or
analyzes information in connection with the making of a credit
decision and who is an independent contractor, as that term is
defined in § 1008.23; and
(4) Any individual who communicates with a consumer to obtain
information necessary for making a credit decision and who is an
independent contractor, as that term is defined in § 1008.23.
(b) A state is not required to impose S.A.F.E. Act licensing
requirements on any individual loan processor or underwriter who,
for example:
(1) Performs only clerical or support duties (i.e., the loan
processor's or underwriter's activities do not include, e.g.,
offering or negotiating loan rates or terms, or counseling
borrowers or prospective borrowers about loan rates or terms), and
who performs those clerical or support duties at the direction of
and subject to the supervision and instruction of an individual who
either: Is licensed and registered in accordance with § 1008.103(a)
(state licensing of loan originators); or is not required to be
licensed because he or she is excluded from the licensing
requirement pursuant to § 1008.103(e)(2) (time-share exclusion),
(e)(5)(federally registered loan originator), (e)(6) (government
employees exclusion), or (e)(7) (nonprofit exclusion).
(2) Performs only clerical or support duties as an employee of a
mortgage lender or mortgage brokerage firm, and who performs those
duties at the direction of and subject to the supervision and
instruction of an individual who is employed by the same employer
and who is licensed in accordance with § 1008.103(a) (state
licensing of loan originators).
(3) Is an employee of a loan processing or underwriting company
that provides loan processing or underwriting services to one or
more mortgage lenders or mortgage brokerage firms under a contract
between the loan processing or underwriting company and the
mortgage lenders or mortgage brokerage firms, provided the employee
performs only clerical or support duties and performs those duties
only at the direction of and subject to the supervision and
instruction of a licensed loan originator employee of the same loan
processing and underwriting company.
(4) Is an individual who does not otherwise perform the
activities of a loan originator and is not involved in the
receipt, collection, distribution, or analysis of information
common for the processing or underwriting of a residential mortgage
loan, nor is in communication with the consumer to obtain such
information.
(c) In order to conclude that an individual who performs
clerical or support duties is doing so at the direction of and
subject to the supervision and instruction of a loan originator who
is licensed or registered in accordance with § 1008.103 (or, as
applicable, an individual who is excluded from the licensing and
registration requirements under § 1008.103(e)(2), (e)(6), or
(e)(7)), there must be an actual nexus between the licensed or
registered loan originator's (or excluded individual's) direction,
supervision, and instruction and the loan processor or
underwriter's activities. This actual nexus must be more than a
nominal relationship on an organizational chart. For example, there
is an actual nexus when:
(1) The supervisory licensed or registered loan originator
assigns, authorizes, and monitors the loan processor or underwriter
employee's performance of clerical and support duties.
(2) The supervisory licensed or registered loan originator
exercises traditional supervisory responsibilities, including, but
not limited to, the training, mentoring, and evaluation of the loan
processor or underwriter employee.