209 CMR 42.02 - Definitions

As used in 209 CMR 42.00 the following words shall, unless the context otherwise requires, have the following meanings:

Applicant means any mortgage lender or mortgage broker who is required to be licensed under the provisions of M.G.L. c. 255E, § 2. Applicant shall include partners or members, if the applicant is a partnership or association, and officers, directors and principal employees, if the applicant is a corporation.

Bona Fide Nonprofit Affordable Homeownership Organization means a Massachusetts nonprofit corporation with a primary purpose of helping qualified low-income individuals build, repair and purchase affordable housing and meets the definition of Bona Fide Nonprofit Organization set forth in 12 CFR Part 1008.103(e)(7)(ii) .

Commissioner means the Commissioner of Banks.

Government Sponsored Enterprise means a financial services corporation created by the United States Congress including, but not limited to, the Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, and Government National Mortgage Association.

Instrumentality Created by the United States or Any State means a federal, state, municipal government, quasi-governmental entity or a nonprofit agency or corporation incorporated under the laws of the Commonwealth that has a tax exempt status granted under the provisions of § 501(c)(3) of the federal Internal Revenue Code, which exclusively makes or issues commitments for mortgage loans on residential property to be financed with public funds, or negotiates, places, assists in the placement of, finds, or offers to negotiate, place, assist in the placement of or find mortgage loans on residential property to be financed with public funds only under a contract with a federal, state, or municipal government, any instrumentality thereof or any quasi-governmental entity as determined by the commissioner. The making of a mortgage loan shall include being named as the lender or mortgagee on the note, mortgage or other loan documents.

Licensee means any person who is licensed by the Commissioner as a mortgage lender or mortgage broker under M.G.L. c. 255E and 209 CMR 42.00.

Mortgage Broker means any person who for compensation or gain, or in the expectation of compensation or gain, directly or indirectly negotiates, places, assists in placement, finds or offers to negotiate, place, assist in placement or find mortgage loans on residential property for others. A person who collects and transmits information regarding a prospective mortgage loan borrower to a third party and conducts any one or more of the following activities is a mortgage broker:

(a) collects a prospective mortgage loan borrower's Social Security number;

(b) views a prospective mortgage loan borrower's credit report;

(c) obtains a prospective mortgage loan borrower's authorization to access or view the prospective mortgage loan borrower's credit report or credit score;

(d) accepts an application, as defined under 12 CFR § 1026.2(a); or

(e) issues a prequalification letter.

Mortgage Lender means any person engaged in the business of making mortgage loans, or issuing commitments for mortgage loans.

Mortgage Loan means a loan to a natural person made primarily for personal, family or household purposes secured wholly or partially by a mortgage on residential property.

Mortgage Loan Originator means a natural person who is not exempt from licensure pursuant to M.G.L. c. 255F, § 2(b) and 209 CMR 41.03: Licensing Exemptions, who is employed by no more than one entity and for compensation or gain or in the expectation of compensation or gain:

(a) takes a residential mortgage loan application; or

(b) offers or negotiates terms of a residential mortgage loan.

Mortgage Loan Rate Lock Commitment means a written or electronically transmitted confirmation issued to a consumer by a mortgage lender for a mortgage loan which, subject to the terms set forth, obligates the mortgage lender to make a mortgage loan at a specified interest rate.

NMLS means the Nationwide Multi-state Licensing System & Registry, a multistate licensing system owned and operated by the State Regulatory Registry LLC (SRR), a wholly owned subsidiary of the Conference of State Bank Supervisors (CSBS), an association of state financial services regulators.

Net Worth means the applicant's or licensee's total assets less total liabilities, omitting the following assets:

(a) that portion of an applicant's assets pledged to secure obligations of any person or entity other than that of the applicant;

(b) any asset due from officers or stockholders of the applicant or persons in which the applicant's officers or stockholders have an interest;

(c) an amount in excess of the lower of the cost or fair market value of mortgage loans in foreclosure, or real property acquired through foreclosure;

(d) an investment shown on the balance sheet in joint ventures, subsidiaries, or affiliates, which is greater than the fair market value of the assets;

(e) goodwill or value placed on insurance renewals or other similar intangible value;

(f) organization costs;

(g) the value of servicing contracts not determined in accordance with the Financial Accounting Standards Codification Topic 860 Transfers and Servicing;

(h) for an applicant that is applying to hold the mortgage broker or mortgage lender license as a natural person, any real property having thereon a dwelling house with accommodations for four or less separate households and occupied, or to be occupied, in whole or in part by the applicant; and

(i) any other intangible asset, as may be determined by the Commissioner.

Non-bank Affiliate means an affiliate that is not a savings bank, a co-operative bank, a trust company, a federal bank, an out-of-state bank, or an out-of-state federal bank, as defined in M.G.L. c. 167, § 1.

Non-bank Subsidiary means a subsidiary that is not a savings bank, a co-operative bank, a trust company, a federal bank, an out-of-state bank, or an out-of-state federal bank, as defined in M.G.L. c. 167, § 1.

Person means a natural person or an organization including a corporation, partnership, association, cooperative or trust.

Rate Lock Commitment Fee means points or other fees, or discounts taken by a mortgage broker for transmittal to a mortgage lender or taken directly by a mortgage lender as consideration for the making of a mortgage loan rate lock commitment.

Residential Property means real property located in the commonwealth having thereon a dwelling house with accommodations for four or less separate households and occupied, or to be occupied, in whole or in part by the obligor on the mortgage debt.

Notes

209 CMR 42.02

Amended by Mass Register Issue 1320, eff. 8/26/2016. Amended by Mass Register Issue 1470, eff. 5/27/2022.