Financial Institutions

CHAPTER 19-14.10
An Act Adopting the Federal Secure and Fair Enforcement for Mortgage Licensing Act of 2009

SECTION 19-14.10-3

§ 19-14.10-3. Definitions.

For purposes of this chapter, the following definitions shall apply:

(1) "Depository institution" has the same meaning as in section 3 of the Federal Deposit Insurance Act, and includes any credit union.

(2) "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.

(3) "Immediate family member" means a spouse, child, sibling, parent, grandparent, or grandchild. This includes stepparents, stepchildren, stepsiblings, and adoptive relationships.

(4) "Individual" means a natural person.

(5)(i) "Loan processor or underwriter" means an individual who performs clerical or support duties as an employee at the direction of, and subject to the supervision and instruction of, a person licensed as a lender or as a loan broker, or exempt from licensing under chapters 14 or 14.1 of title 19.

(ii) For purposes of subsection (5)(i), "clerical or support duties" may include subsequent to the receipt of an application:

(A) The receipt, collection, distribution, and analysis of information common for the processing or underwriting of a residential mortgage loan; and

(B) Communicating with a consumer to obtain the information necessary for the processing or underwriting of a 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.

(iii) An individual engaging solely in loan processor or underwriter activities shall 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.

(6)(i) "Mortgage loan originator" means:

(A) An individual who, for compensation or gain or in the expectation of compensation or gain:

(I) Takes a residential mortgage loan application; or

(II) Offers or negotiates terms of a residential mortgage loan;

(B) Does not include an individual engaged solely as a loan processor or underwriter except as otherwise provided in § 19-14.10-4(c);

(C) Does not include a person or entity who or that only performs real estate brokerage activities and is licensed or registered in accordance with Rhode Island law, unless the person or entity 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;

(D) Does not include a person or entity solely involved in extensions of credit relating to timeshare plans, as that term is defined in 11 U.S.C. § 101(53D), as amended; and

(E) Does not include a person (or its employees) engaged in servicing mortgage loans. For purposes of this exclusion, "servicing mortgage loans" means, on behalf of the note holder, collecting and receiving payments, including payments of principal, interest, escrow amounts, and other sums due, on obligations due and owing to the note holder pursuant to a residential mortgage loan, and, when the borrower is in default or in reasonably foreseeable likelihood of default, working with the borrower on behalf of the note holder and pursuant to the contract between the person servicing mortgage loans and the note holder, to modify but not refinance, either temporarily or permanently, the obligations, or otherwise finalizing collection of the obligation through the foreclosure process.

(ii) "Real estate brokerage activity" means any activity that involves offering or providing real estate brokerage services to the public, including:

(A) Acting as a real estate agent or real estate broker for a buyer, seller, lessor, or lessee of real property;

(B) Bringing together parties interested in the sale, purchase, lease, rental, or exchange of real property;

(C) Negotiating, on behalf of any party, 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);

(D) Engaging in any activity for which a person engaged in the activity is required to be registered or licensed as a real estate agent or real estate broker under any applicable law; and

(E) Offering to engage in any activity, or act in any capacity, described in subparagraphs (A), (B), (C), or (D) of this section.

(7) "Nationwide Mortgage Licensing System and 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 licensed mortgage loan originators.

(8) "Nontraditional mortgage product" means any mortgage product other than a thirty-year (30), fixed-rate mortgage.

(9) "Person" means a natural person, corporation, company, limited-liability company, partnership, association, or any other entity however organized.

(10) "Registered mortgage loan originator" means any individual who:

(i) Meets the definition of mortgage loan originator and is an employee of:

(A) A depository institution;

(B) A subsidiary that is:

(1) Owned and controlled by a depository institution; and

(2) Regulated by a Federal banking agency; or

(C) An institution regulated by the Farm Credit Administration; and

(ii) Is registered with, and maintains a unique identifier through, the Nationwide Mortgage Licensing System and Registry.

(11) "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 (as defined in § 103(v) of the Truth in Lending Act) or residential real estate upon which is constructed or intended to be constructed a dwelling (as so defined).

(12) "Residential real estate" means any real property located in Rhode Island upon which is constructed, or intended to be constructed, a dwelling.

(13) "SAFE Act" means the Secure and Fair Enforcement for Mortgage Licensing Act, comprising §§ 1501-1517 of the Housing and Economic Recovery Act of 2008, Public Laws 110-289.

(14) "Unique identifier" means a number or other identifier assigned by protocols established by the nationwide mortgage licensing system and registry.

History of Section.
(P.L. 2009, ch. 148, § 3; P.L. 2009, ch. 160, § 3; P.L. 2010, ch. 56, § 2; P.L. 2010, ch. 64, § 2; P.L. 2011, ch. 145, § 3; P.L. 2015, ch. 200, § 2; P.L. 2015, ch. 202, § 2.)