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1.4.4 Mortgage Loan Originators

The seemingly generic term “loan originator” has become a term of art defined by numerous state347 and federal laws.348 A mortgage loan originator (or sometimes “mortgage originator” or “loan originator”349) can be a natural person or an artificial entity. Complicating matters, a loan originator may also be a lender, a manufactured home sales person, a loan officer, a mortgage broker, or a brokerage company. The term has many different meanings that depend on the context. It was included in the Dodd-Frank Act mortgage reforms and is specifically defined in the Truth in Lending Act.350 It is also used, sometimes differently, in the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (S.A.F.E. Act)351 and state laws.352 The Truth in Lending Act imposes restrictions on loan originator compensation353 and requires originators to meet the requirements of the S.A.F.E. Act.354 The S.A.F.E. Act establishes licensing and registration requirements for loan originators.355 In short, whenever a practitioner comes across any variation of the term “loan originator,” it is important to look for a definition.

Footnotes

  • 347 {347} See Appx. A, infra (listing state statutes defining loan originator).

  • 348 {348} See, e.g., 12 U.S.C. § 5102(4)(A) (defining “loan originator” for purposes of the S.A.F.E. Act, 12 U.S.C. ch. 51); 15 U.S.C. § 1602(cc)(2) (second subsection (cc)) (defining “mortgage originator” for purposes of Consumer Financial Protection Bureau (CFPB) enforcement of the Truth in Lending Act (TILA), 15 U.S.C. ch. 41); 12 C.F.R. § 208.102(b) (defining “mortgage loan originator” for purposes of Federal Reserve Board (FRB) enforcement of the S.A.F.E. Act); 12 C.F.R. § 226.36(a) (defining “loan originator” for purposes of FRB enforcement of TILA); 12 C.F.R. § 365.102(b)(1) (defining “mortgage loan originator” for purposes of Federal Deposit Insurance Corp. enforcement of the S.A.F.E. Act); Regulation G, 12 C.F.R. §§ 1007.102, 1008.103(b) (defining “mortgage loan originator” and “business of loan originator” for purposes of CFPB enforcement of the S.A.F.E. Act); Regulation X, 12 C.F.R. § 1024.2 (defining “loan originator” for purposes of the Real Estate Settlement Procedures Act as “a lender or mortgage broker”); Regulation Z, 12 C.F.R. § 1026.36(a)(1) (defining “loan originator” for limited purposes of § 1026.36); 31 C.F.R. § 1010.100(lll)(1)(ii) (defining “residential mortgage originator” for purposes of the Financial Crimes Enforcement Network, 31 U.S.C. ch. X).

  • 349 {349} The S.A.F.E. Act and its regulations confusingly use the terms “residential mortgage loan originator,” “mortgage loan originator,” and “loan originator” interchangeably. See, e.g., 12 U.S.C. §§ 5101(8) (purpose of Act, using “residential mortgage loan originator”), 5102(4) (defining “loan originator” but not “mortgage loan originator”); Regulation G, 12 C.F.R. § 1007.102 (defining “mortgage loan originator” but not “loan originator”).

  • 350 {350} See National Consumer Law Center, Truth in Lending § 9.3.2 (10th ed. 2019), updated at www.nclc.org/library (discussion of the definition of mortgage originator and the applicable Truth in Lending Act rules).

  • 351 {351} See § 3.3, infra (discussing S.A.F.E. Act requirements).

  • 352 {352} See Appx. A, infra (listing state mortgage loan originator laws).

  • 353 {353} See § 7.3, infra (describing mortgage broker compensation).

  • 354 {354} Regulation Z, 12 C.F.R. § 1026.36(f).

  • 355 {355} See § 3.3, infra (discussing S.A.F.E. Act requirements).