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2013 SESSION
Be it enacted by the General Assembly of Virginia:
1. That §§ 6.2-1700 and 6.2-1701 of the Code of Virginia are amended and reenacted as follows:
§ 6.2-1700. Definitions.
As used in this chapter:
"Act" means the federal Secure and Fair Enforcement for Mortgage Licensing Act, Title V (§ 1501 et seq.) of the Housing and Economic Recovery Act of 2008, P.L. 110-289.
"Administrative or clerical tasks" means the receipt, collection, and distribution of information common for the processing or underwriting of a residential mortgage loan in the mortgage industry and communication with the consumer to obtain information necessary for the processing or underwriting of a residential mortgage loan.
"Depository Covered financial institution"
has the same meaning as in § 3 of the Federal Deposit Insurance Act (12
U.S.C. § 1811 et seq.), and includes any credit union that term is defined
in 12 C.F.R. § 1007.102.
"Dwelling" means a residential structure or mobile home that contains one to four family housing units, or individual units of condominiums or cooperatives.
"Employee" means an individual (i) whose manner and means of performance of work are subject to the right of control of, or are controlled by, a person and (ii) whose compensation for federal income tax purposes is reported, or required to be reported, on a W-2 form issued by the controlling person.
"Federal banking agencies" means the Board of
Governors of the Federal Reserve System, the Comptroller of the Currency, the
Director of the Office of Thrift Supervision, the National Credit Union
Administration, and the Federal Deposit Insurance Corporation.
"Immediate family member" means a spouse, child, sibling, parent, grandparent, or grandchild. This includes stepparents, stepchildren, stepsiblings, and adoptive relationships.
"Individual loan servicer" means any person who,
on behalf of the note holder, collects or receives payments, including payments
of principal, interest, escrow amounts, and other amounts due, on obligations
due and owing to the note holder pursuant to a residential mortgage loan, or
who, when the borrower is in default or in foreseeable likelihood of default,
works on behalf of the note holder with the borrower to modify or refinance,
either temporarily or permanently, the obligations in order to avoid
foreclosure or otherwise to finalize collection through the foreclosure process.
"Licensee" means an individual licensed under this chapter.
"Loan processor or underwriter" means an individual
who, with respect to the origination of a residential mortgage loan, performs
clerical or support duties at the direction of and subject to the supervision
and instruction of a licensee or a person exempt from licensing under this
chapter registered mortgage loan originator. For the purposes of
this definition, clerical or support duties include (i) the receipt,
collection, distribution, and analysis of information common for the processing
or underwriting of a residential mortgage loan and (ii) communication with a
consumer to obtain the information necessary for the processing or underwriting
of a residential mortgage loan, to the extent that such communication does not
include offering or negotiating loan rates or terms, or counseling consumers
about residential mortgage loan rates or terms.
"Mortgage loan originator" means an individual who (i) takes an application for or offers or negotiates the terms of a residential mortgage loan in which the dwelling is or will be located in the Commonwealth or (ii) represents to the public, through advertising or other means of communicating or providing information, including the use of business cards, stationery, brochures, signs, rate lists, or other promotional items, that such individual can or will perform any of the activities described in clause (i).
"Nationwide Mortgage Licensing System and Registry" or "Registry" 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 licensing and registration of mortgage loan originators.
"Nontraditional mortgage product" means any mortgage product other than a 30-year fixed rate mortgage.
"Real estate brokerage activities" means any activity that involves offering or providing real estate brokerage services to the public, including (i) acting as a real estate broker, real estate agent, or real estate salesperson for a buyer, seller, lessor, or lessee of real property; (ii) bringing together parties interested in the sale, purchase, lease, rental, or exchange of real property; (iii) negotiating 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; (iv) engaging in any activity for which a person is required to be licensed or registered as a real estate broker, real estate agent, or real estate salesperson; and (v) offering to engage in any activity or act in any capacity described in clauses (i) through (iv).
"Registered mortgage loan originator" means any
individual who (i) takes an application for or offers or negotiates the terms
of a residential mortgage loan in which the dwelling is or will be located in
the Commonwealth and, (ii) is an employee of (a) a
depository covered financial institution, (b) a subsidiary that
is owned and controlled by a depository institution and regulated by a federal
banking agency, or (c) an institution regulated by the Farm Credit
Administration, and (ii) (iii) is registered with, and
maintains a unique identifier through, the Registry.
"Residential mortgage loan" 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 or residential real estate upon which is constructed or intended to be constructed a dwelling.
"Unique identifier" means a number or other identifier assigned by protocols established by the Registry that permanently identifies a mortgage loan originator.
§ 6.2-1701. License requirement.
A. No individual shall engage in the business of a mortgage loan originator unless such individual has first obtained and maintains annually a license under this chapter.
B. The following shall be exempt from licensing and other provisions of this chapter:
1. Any individual engaged solely as a loan processor or underwriter
who does not represent to the public, through advertising or other means of
communicating or providing information including the use of business cards,
stationery, brochures, signs, rate lists, or other promotional items, that such
individual can or will perform any of the activities of a mortgage loan
originator. An. Except as otherwise provided in this subsection, an individual
acting as an independent contractor may not engage in residential mortgage loan
origination activities as a loan processor or underwriter unless such
individual obtains has first maintained and maintains annually a
mortgage loan originator license;
2. Any individual who only performs administrative or clerical
tasks on behalf of a person licensed or exempt pursuant to Chapter 16 (§
6.2-1600 et seq.) or on behalf of any individual licensed pursuant to this
chapter mortgage loan originator;
3. Any individual who only performs real estate brokerage activities and is licensed or registered in accordance with applicable law, unless the individual is compensated directly or indirectly by the lender, a mortgage broker, or other mortgage loan originator or by any agent of such lender, mortgage broker, or other mortgage loan originator;
4. Any individual solely involved in extensions of credit relating to timeshare plans, as that term is defined in 11 U.S.C. § 101(53D);
5. A registered mortgage loan originator;
6. Any individual who offers or negotiates terms of a residential mortgage loan with or on behalf of an immediate family member of the individual;
7. Any individual who offers or negotiates terms of a
residential mortgage loan secured by a dwelling that serves acts as
a loan originator in providing financing for the sale of that individual's
own residence;
8. A licensed attorney who negotiates the terms of a
residential mortgage loan on behalf of a client as an ancillary matter to the
attorney's representation of the client, unless the attorney is compensated by
a lender, a mortgage broker, or other mortgage loan originator or by any agent
of such lender, mortgage broker, or other mortgage loan originator,
provided that the attorney's mortgage loan origination activities are: (i)
considered by the Supreme Court of Virginia to be part of the authorized
practice of law within the Commonwealth, (ii) carried out within an
attorney-client relationship, and (iii) accomplished by the attorney in
compliance with all applicable laws, rules, ethics, and standards;
9. Any individual acting as an individual loan servicer;
10. Any employee of federal, state, or local
government, or a housing finance agency, who acts as a mortgage loan originator
only pursuant to his official duties of employment. For the purposes of this
subdivision, "local government" means any county, city, or town or
other local or regional political subdivision; and
11. 10. Any employee of a bona fide nonprofit
organization, as determined by the Commission in accordance with § 6.2-1701.1,
who acts as a mortgage loan originator only (i) pursuant to his official duties
of employment and (ii) with respect to residential mortgage loans with terms
that are favorable to a borrower.