12 CFR Appendix A to Subpart I of Part 208, Examples of Mortgage Loan Originator Activities

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Appendix A to Subpart I of Part 208 - Examples of Mortgage Loan Originator Activities

This Appendix provides examples to aid in the understanding of activities that would cause an employee of a bank to fall within or outside the definition of mortgage loan originator. 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 this subpart. For purposes of the examples below, the term “loan” refers to a residential mortgage loan.

(a)Taking a loan application. The following examples illustrate when an employee takes, or does not take, a loan application.

(1) Taking an application includes: receiving information provided in connection with a request for a loan to be used to determine whether the consumer qualifies for a loan, even if the employee:

(i) Has received the consumer's information indirectly in order to make an offer or negotiate a loan;

(ii) Is not responsible for verifying information;

(iii) Is inputting information into an online application or other automated system on behalf of the consumer; or

(iv) Is not engaged in approval of the loan, including determining whether the consumer qualifies for the loan.

(2) Taking an application does not include any of the following activities performed solely or in combination:

(i) Contacting a consumer to verify the information in the loan application by obtaining documentation, such as tax returns or payroll receipts;

(ii) Receiving a loan application through the mail and forwarding it, without review, to loan approval personnel;

(iii) Assisting a consumer who is filling out an application by clarifying what type of information is necessary for the application or otherwise explaining the qualifications or criteria necessary to obtain a loan product;

(iv) Describing the steps that a consumer would need to take to provide information to be used to determine whether the consumer qualifies for a loan or otherwise explaining the loan application process;

(v) In response to an inquiry regarding a prequalified offer that a consumer has received from a bank, collecting only basic identifying information about the consumer and forwarding the consumer to a mortgage loan originator; or

(vi) Receiving information in connection with a modification to the terms of an existing loan to a borrower as part of the bank's loss mitigation efforts when the borrower is reasonably likely to default.

(b)Offering or negotiating terms of a loan. The following examples are designed to illustrate when an employee offers or negotiates terms of a loan, and conversely, what does not constitute offering or negotiating terms of a loan.

(1) Offering or negotiating the terms of a loan includes:

(i) Presenting a loan offer to a consumer for acceptance, either verbally or in writing, including, but not limited to, providing a disclosure of the loan terms after application under the Truth in Lending Act, even if:

(A) Further verification of information is necessary;

(B) The offer is conditional;

(C) Other individuals must complete the loan process; or

(D) Only the rate approved by the bank's loan approval mechanism function for a specific loan product is communicated without authority to negotiate the rate.

(ii) Responding to a consumer's request for a lower rate or lower points on a pending loan application by presenting to the consumer a revised loan offer, either verbally or in writing, that includes a lower interest rate or lower points than the original offer.

(2) Offering or negotiating terms of a loan does not include solely or in combination:

(i) Providing general explanations or descriptions in response to consumer queries regarding qualification for a specific loan product, such as explaining loan terminology (i.e., debt-to-income ratio); lending policies (i.e., the loan-to-value ratio policy of the bank); or product-related services;

(ii) In response to a consumer's request, informing a consumer of the loan rates that are publicly available, such as on the bank's Web site, for specific types of loan products without communicating to the consumer whether qualifications are met for that loan product;

(iii) Collecting information about a consumer in order to provide the consumer with information on loan products for which the consumer generally may qualify, without presenting a specific loan offer to the consumer for acceptance, either verbally or in writing;

(iv) Arranging the loan closing or other aspects of the loan process, including communicating with a consumer about those arrangements, provided that communication with the consumer only verifies loan terms already offered or negotiated;

(v) Providing a consumer with information unrelated to loan terms, such as the best days of the month for scheduling loan closings at the bank;

(vi) Making an underwriting decision about whether the consumer qualifies for a loan;

(vii) Explaining or describing the steps or process that a consumer would need to take in order to obtain a loan offer, including qualifications or criteria that would need to be met without providing guidance specific to that consumer's circumstances; or

(viii) Communicating on behalf of a mortgage loan originator that a written offer, including disclosures provided pursuant to the Truth in Lending Act, has been sent to a consumer without providing any details of that offer.

(c)Offering or negotiating a loan for compensation or gain. The following examples illustrate when an employee does or does not offer or negotiate terms of a loan “for compensation or gain.”

(1) Offering or negotiating terms of a loan for compensation or gain includes engaging in any of the activities in paragraph (b)(1) of this Appendix in the course of carrying out employment duties, even if the employee does not receive a referral fee or commission or other special compensation for the loan.

(2) Offering or negotiating terms of a loan for compensation or gain does not include engaging in a seller-financed transaction for the employee's personal property that does not involve the bank.

This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.

This list is taken from the Parallel Table of Authorities and Rules provided by GPO [Government Printing Office].

It is not guaranteed to be accurate or up-to-date, though we do refresh the database weekly. More limitations on accuracy are described at the GPO site.

United States Code
U.S. Code: Title 12 - BANKS AND BANKING

§ 24 - Corporate powers of associations

§ 36 - Branch banks

§ 92a - Trust powers

§ 93a - Authority to prescribe rules and regulations

§ 248 - Enumerated powers

§ 321 - Application for membership

§ 322 - Determination on application

§ 323 - Stock in Federal reserve banks; method of payment

§ 324 - Laws applicable on becoming members

§ 325 - Examinations

§ 326 - Acceptance of examinations and reports by State authorities; special examinations

§ 327 - Surrender of stock and cancellation of memberships

§ 328 - Withdrawals from membership

§ 329 - Capital stock required as condition precedent to membership

§ 329a - Omitted

§ 330 - Laws applicable on becoming members; discounts for State banks

§ 331 - Certifying checks on State banks admitted as members

§ 332 - Depositaries of public money; financial agents; security required

§ 333 - Mutual savings banks; application and admission to membership in Federal Reserve System

§ 334 - Reports from affiliates; penalty for failure to furnish

§ 335 - Dealing in investment securities; limitations and conditions

§ 336 - Certificates of stock; representation of stock of other corporations

§ 337 - Repealed. Pub. L. 89–485, § 13(g), July 1, 1966, 80 Stat. 243

§ 338 - Examination of affiliates; forfeiture of membership on refusal of affiliate to give information or pay expense

§ 338a - Investments to promote public welfare and community development; limitation on investments

§ 371d - Investment in bank premises or stock of corporation holding premises

§ 461 - Reserve requirements

§ 481 - Appointment of examiners; examination of member banks, State banks, and trust companies; reports

§ 482 - Employees of Office of Comptroller of the Currency; appointment; compensation and benefits

§ 483 - Special examination of member banks; information of condition furnished to Board of Governors of the Federal Reserve System

§ 484 - Limitation on visitorial powers

§ 485 - Examination of Federal reserve banks

§ 486 - Waiver of requirements as to reports from or examinations of affiliates

§ 601 - Authorization; conditions and regulations

§ 611 - Formation authorized; fiscal agents; depositaries in insular possessions

§ 1814 - Insured depository institutions

§ 1816 - Factors to be considered

§ 1818 - Termination of status as insured depository institution

§ 1820 - Administration of Corporation

§ 1823 - Corporation monies

§ 1828 - Regulations governing insured depository institutions

§ 1831 - Separability of certain provisions of this chapter

§ 1831o - Prompt corrective action

§ 1831p-1

§ 1831r-1

§ 1831w - Safety and soundness firewalls applicable to financial subsidiaries of banks

§ 1831x - Insurance customer protections

§ 1833 - Repealed. Pub. L. 104–208, div. A, title II, § 2224(b), Sept. 30, 1996, 110 Stat. 3009–415

§ 1835a - Prohibition against deposit production offices

§ 1882 - Security measures

§ 2901 - Congressional findings and statement of purpose

§ 2902 - Definitions

§ 2903 - Financial institutions; evaluation

§ 2904 - Report to Congress

§ 2905 - Regulations

§ 2906 - Written evaluations

§ 2907 - Operation of branch facilities by minorities and women

§ 3105 - Authority of Federal Reserve System

§ 3310 - Establishment of Appraisal Subcommittee

§ 3331 - Purpose

§ 3332 - Functions of Appraisal Subcommittee

§ 3333 - Chairperson of Appraisal Subcommittee; term of Chairperson; meetings

§ 3334 - Officers and staff

§ 3335 - Powers of Appraisal Subcommittee

§ 3336 - Procedures for establishing appraisal standards and requiring use of certified and licensed appraisers

§ 3337 - Startup funding

§ 3338 - Roster of State certified or licensed appraisers; authority to collect and transmit fees

§ 3339 - Functions of Federal financial institutions regulatory agencies relating to appraisal standards

§ 3340 - Time for proposal and adoption of standards

§ 3341 - Functions of Federal financial institutions regulatory agencies relating to appraiser qualifications

§ 3342 - Transactions requiring services of State certified appraiser

§ 3343 - Transactions requiring services of State licensed appraiser

§ 3344 - Time for proposal and adoption of rules

§ 3345 - Certification and licensing requirements

§ 3346 - Establishment of State appraiser certifying and licensing agencies

§ 3347 - Monitoring of State appraiser certifying and licensing agencies

§ 3348 - Recognition of State certified and licensed appraisers for purposes of this chapter

§ 3349 - Violations in obtaining and performing appraisals in federally related transactions

§ 3350 - Definitions

§ 3351 - Miscellaneous provisions

§ 3905 - Accounting for fees on international loans

§ 3906 - Collection and disclosure of international lending data

§ 3907 - Capital adequacy

§ 3908 - Foreign loan evaluations

§ 3909 - General authorities

§ 5371 - Leverage and risk-based capital requirements

U.S. Code: Title 15 - COMMERCE AND TRADE
U.S. Code: Title 31 - MONEY AND FINANCE

Title 12 published on 17-Jun-2017 04:33

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 12 CFR Part 208 after this date.

  • 2016-12-16; vol. 81 # 242 - Friday, December 16, 2016
    1. 81 FR 90949 - Expanded Examination Cycle for Certain Small Insured Depository Institutions and U.S. Branches and Agencies of Foreign Banks
      GPO FDSys XML | Text
      Joint final rules.
      Effective on January 17, 2017.
      12 CFR Part 4