§ 53-244.030. Definitions. - North Carolina Statutes

§ 53‑244.030. Definitions.

For purposes of the Article,the following definitions apply:

(1)        "Affiliate"means any company that controls, is controlled by, or is under common controlwith another company, as set forth in the Bank Holding Company Act of 1956 (12U.S.C. § 1841, et seq.), as amended from time to time.

(2)        "AuditedStatement of Financial Condition" means a statement of financial conditionprepared in accordance with generally accepted accounting principles andcertified by a certified public accountant as fairly and accurately reflectingfinancial condition of the licensee as of the date specified in the statement.

(2a)      "BankingCommission" means the North Carolina Banking Commission. For the purposeof complying with this Article by credit unions, Banking Commission means theNorth Carolina Credit Union Commission.

(3)        "Branchmanager" means the individual who is assigned to, is in charge of, and isresponsible for the business operations of a branch office of a mortgage brokeror mortgage lender.

(4)        "Branchoffice" means an office of a mortgage broker or mortgage lender that isseparate and distinct from the mortgage broker's or lender's principal officeand from which its employees engage in the mortgage business. A branch officeshall not be located at an individual's home or residence.

(5)        "CertifiedStatement of Financial Condition" means a statement of financial conditionprepared in accordance with generally accepted accounting principles andcertified by the preparer or licensee as fairly and accurately reflecting thefinancial condition of the licensee as of the date specified in the statement.

(6)        "Commissioner"means the North Carolina Commissioner of Banks and the Commissioner'sdesignees. For the purpose of compliance with this Article by credit unions,Commissioner means the Administrator of the Credit Union Division of theDepartment of Commerce.

(7)        "Control"means the power, directly or indirectly, to direct the management or policiesof a company, whether through ownership of securities, by contract, orotherwise. Any person that (i) is a director, general partner, or executiveofficer; (ii) directly or indirectly has the right to vote ten percent (10%) ormore of a class of voting security or has the power to sell or direct the saleof ten percent (10%) or more of a class of voting securities; (iii) in the caseof a limited liability company, is a managing member; or (iv) in the case of apartnership, has the right to receive upon dissolution, or has contributed, tenpercent (10%) or more of the capital, is presumed to control the company.

(8)        "Depositoryinstitution" has the same meaning as in section 3 of the Federal DepositInsurance Act and includes any credit union whose share and deposit accountsare insured by the National Credit Union Administration under the FederalCredit Union Act.

(9)        "Dwelling"means a residential structure that contains one to four units, whether or notthat structure is attached to real property. The term includes an individualcondominium unit, cooperative unit, manufactured home, mobile home, or trailerif it is used as a residence.

(10)      "Employee"means an individual who has an employment relationship with a mortgage broker,mortgage lender, or mortgage servicer and who is treated as a common law employeefor purposes of compliance with the federal income tax laws and whose income isreported on IRS Form W‑2.

(11)      "Engaging in themortgage business" means:

a.         For compensation orgain, or in the expectation of compensation or gain, either directly or indirectly,to accept or offer to accept an application for a residential mortgage loanfrom prospective borrowers, solicit or offer to solicit a residential mortgageloan from prospective borrowers, negotiate the terms or conditions of aresidential mortgage loan with prospective borrowers, issue residentialmortgage loan commitments or interest rate guarantee agreements to prospectiveborrowers, or engage in tablefunding of residential mortgage loans, whether anysuch acts are done through contact by telephone, by electronic means, by mail,or in person with the borrowers or prospective borrowers.

b.         To make or fund, oroffer to make or fund, or advance funds on residential mortgage loans forcompensation or gain, or in the expectation of compensation or gain.

c.         To engage, whetherfor compensation or gain from another or on one's own behalf, in the businessof receiving any scheduled periodic payments from a borrower pursuant to theterms of any residential mortgage loan, including amounts for escrow accounts,and making the payments of principal and interest and such other payments withrespect to the amounts received from the borrower as may be required pursuantto the terms of the residential mortgage loan, the residential mortgage loanservicing documents, or servicing contract, or otherwise to meet the definitionof the term "servicer" in 12 U.S.C. § 2605(i)(2) with respect toresidential mortgage loans.

(11a)    "Exclusivemortgage broker" means an individual who acts as a mortgage brokerexclusively for a single mortgage lender or mortgage broker licensee or asingle exempt mortgage lender and who is licensed pursuant to G.S. 53‑244.050(b)(3).Unless otherwise indicated, an exclusive mortgage broker shall be subject tothe requirements of a mortgage broker under this Article.

(12)      "Federal bankingagencies" means the Board of Governors of the Federal Reserve System, theOffice of the Comptroller of the Currency, the Office of Thrift Supervision,the National Credit Union Administration, and the Federal Deposit InsuranceCorporation.

(13)      "Immediatefamily member" means a spouse, child, sibling, parent, grandparent, orgrandchild, or the spouse of an immediate family member. This term includesstepparents, stepchildren, stepsiblings, and adoptive relationships.

(14)      "Individual"means a natural person.

(15)      "Licensee"means a mortgage loan originator, mortgage broker, mortgage lender, or mortgageservicer or other person who is licensed pursuant to this Article.

(16)      "Loan processoror underwriter" means an individual who performs clerical or supportduties as an employee at the direction of and subject to the supervision andinstruction of a person licensed or exempt from licensing under this Article.Clerical or support duties may include, subsequent to the receipt of anapplication:

a.         The receipt,collection, distribution, and analysis of information common for the processingor underwriting of a residential mortgage loan; and

b.         Communicating with aconsumer to obtain the information necessary for the processing or underwritingof a loan, to the extent that such communication does not include offering ornegotiating loan rates or terms or counseling consumers about residentialmortgage loan rates or terms.

Anyperson who represents to the public, through advertising or other means ofcommunication, or provides information, including the use of business cards,stationery, brochures, signs, rate lists, or other promotional items, that theindividual can or will perform any of the activities of a mortgage loan originatorshall not be deemed to be a loan processor or underwriter under thisdefinition.

(17)      "Loss mitigationspecialist" means an employee of a mortgage servicer authorized to (i)collect or receive payments, including payments of principal, interest, escrowamounts, and other amounts due on existing residential mortgage loans due andowing to the licensed lender or servicer when the borrower is in default or inreasonably foreseeable likelihood of default, (ii) work with the borrower tocollect data, and (iii) make decisions necessary to modify, either temporarilyor permanently, certain terms of those residential mortgage loans or tootherwise finalize collection through the foreclosure process. Such decisionsshall include any change in the principal amount of the debt, the rate ofannual interest charged, the term of the loan, the waiver of any fees orcharges, including late charges, the deferral of payments, or any other similarmatter.

(18)      "Make aresidential mortgage loan" means to advance funds, to offer to advancefunds, to make a commitment to advance funds to a borrower under a mortgageloan, or to fund a residential mortgage loan.

(19)      "Mortgagebroker" means a person engaged in the mortgage business as defined in sub‑subdivisiona. of subdivision (11) of this section.

(20)      "Mortgagelender" means a person engaged in the mortgage business as defined in sub‑subdivisionb. of subdivision (11) of this section. However, the definition does notinclude a person who acts as a mortgage lender only in a tablefundingtransaction.

(21)      "Mortgage loanoriginator" means:

a.         An individual whofor compensation or gain or in the expectation of compensation or gain, whetherthrough contact by telephone, by electronic means, by mail, or in person withprospective borrowers, either:

1.         Takes a residentialmortgage loan application or offers or negotiates terms of a residentialmortgage loan,

2.         Accepts or offers toaccept applications for mortgage loans,

3.         Solicits or offersto solicit a mortgage loan,

4.         Negotiates the termsor conditions of a mortgage loan, or

5.         Issues mortgage loancommitments or interest rate guarantee agreements to prospective borrowers.

b.         The term includes anindividual acting solely as a loss mitigation specialist if the United States Departmentof Housing and Urban Development issues a guideline, rule, regulation, orinterpretative letter that such individuals are loan originators as the term isdefined by § 1503 of Title V of the Housing and Economic Recovery Act of 2008,Public Law 110‑289, and only to the extent of such an issuance ordetermination.

c.         The term does notinclude:

1.         An individualengaged solely as a loan processor or underwriter;

2.         A person or entitythat only performs real estate brokerage activities and is licensed orregistered as such in accordance with State law, unless the person or entity iscompensated by a mortgage lender, a mortgage broker, or other mortgage loanoriginator or by any agent of a mortgage lender, mortgage broker, or othermortgage loan originator;

3.         A person or entitysolely involved in extensions of credit or sale of time share instrumentsrelating to time share plans, as that term is defined in G.S. 93A‑41(9a);or

4.         An individual whoonly informs a prospective borrower of the availability of persons engaged inthe mortgage business, does not take or assist in the completion of a loanapplication, and does not discuss specific terms or conditions of a mortgageloan. The taking of basic preapplication information for facilitating aresidential mortgage loan transaction, such as the name and contact informationof the prospective borrower, the prospective borrower's own assessment ofcreditworthiness, desired loan types, and resources to make a down payment, butnot including social security number, credit score, credit or employmenthistory, or specific rates of a desired mortgage loan, to connect prospectiveborrowers to persons engaged in the mortgage business does not prevent anindividual from qualifying for this exclusion.

5.         An individual who isa salesperson for a licensed manufactured housing retailer that performs thepurely administrative and clerical tasks of physically handling or transmittingto a licensed mortgage loan originator on behalf of a prospective borrower anapplication and other forms completed by the prospective borrower. Nothing inthis subpart prohibits a salesperson, upon the written request of a mortgageloan originator and after a prospective borrower completes an application, frompulling and transmitting a credit report with the application.

(22)      "Mortgageservicer" means a person engaged in the mortgage business who directly orindirectly engages in the mortgage business as defined in sub‑subdivisionc. of subdivision (11) of this section.

(23)      "NationwideMortgage Licensing System and Registry" means the mortgage licensingsystem developed and maintained by the Conference of State Bank Supervisors andthe American Association of Residential Mortgage Regulators for the licensingand registration of licensed mortgage loan originators.

(24)      "Nontraditionalmortgage product" means any residential mortgage loan product other than a30‑year fixed rate mortgage.

(25)      "Person"means an individual, partnership, limited liability company, limitedpartnership, corporation, association, or other group engaged in joint businessactivities however organized.

(26)      "Principaloffice" means a principal place of business that shall consist of at leastone enclosed room or building of stationary construction in which negotiationsof mortgage loan transactions may be conducted and carried on in privacy and inwhich all of the books, records, and files pertaining to mortgage loantransactions relating to borrowers in this State are maintained. A principaloffice shall not be located at an individual's home or residence.

(27)      "Qualifyingindividual" means a person who meets the experience and other requirementsof G.S. 53‑244.050(b) and who agrees to be primarily responsible for theoperations of a licensed mortgage broker or mortgage lender or mortgageservicer.

(28)      "Real estatebrokerage activity" means any activity that involves offering or providingreal estate brokerage services to the public, including:

a.         Acting as a realestate agent or real estate broker for a buyer, seller, lessor, or lessee ofreal property;

b.         Bringing togetherparties interested in the sale, purchase, lease, rental, or exchange of realproperty;

c.         Negotiating, onbehalf of any party, any portion of a contract relating to the sale, purchase,lease, rental, or exchange of real property, other than in connection withproviding financing with respect to any such transaction;

d.         Engaging in anyactivity for which a person engaged in the activity is required to beregistered or licensed as a real estate agent or real estate broker underChapter 93A of the General Statutes; and

e.         Offering to engagein any activity, or act in any capacity, described in sub‑subdivision a.,b., c., or d. of this subdivision.

(29)      "Registeredmortgage loan originator" means any individual who meets the definition ofmortgage loan originator, is registered with, and maintains a unique identifierthrough the Nationwide Mortgage Licensing System and Registry and is anemployee of:

a.         A depositoryinstitution;

b.         A subsidiary that isowned and controlled by a depository institution and regulated by a federalbanking agency; or

c.         An institutionregulated by the Farm Credit Administration.

(30)      "Residentialmortgage loan or mortgage loan" means any loan made or represented to bemade to a natural person or persons primarily for personal, family, orhousehold use that is secured by a mortgage, deed of trust, or other equivalentconsensual security interest on a dwelling located within this State orresidential real estate upon which is constructed or intended to be constructeda dwelling.

(31)      "Residentialreal estate" means any real property located in this State upon which isconstructed or intended to be constructed a dwelling.

(32)      "RESPA"means the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601, et seq., asit may be hereafter amended.

(33)      "Tablefunding"means a transaction in which a person closes a residential mortgage loan in itsown name but with funds provided by another and in which the loan is assignedto the mortgage lender actually providing the funds within one business day ofthe funding of the loan.

(34)      "Uniqueidentifier" means a number or other identifier assigned by protocolsestablished by the Nationwide Mortgage Licensing System and Registry.  (2009‑374, s. 2; 2009‑570,s. 34.1.)