The following words and phrases when used in this chapter shall have the meanings given to them in this section unless the context clearly indicates otherwise:
"Administrative or clerical tasks."The receipt, collection and distribution of information common for the processing, servicing or underwriting of a mortgage loan and communication with a consumer to obtain information necessary for the processing, servicing or underwriting of a mortgage loan.
"Advance fee."Any funds requested by or to be paid to a person in advance of or during the processing of a mortgage loan application, excluding those fees paid by a consumer directly to a credit agency reporting bureau, title company or real estate appraiser.
"Applicant."A person who applies for a license under this chapter.
"Application."A request, in any form, for an offer, or a response to a solicitation of an offer, of mortgage loan terms, and the information about the borrower or prospective borrower that is customary or necessary in a decision on whether to make such an offer.
"Banking institution."Any of the following:
(1) A State-chartered bank, bank and trust company, savings bank or private bank.
(2) A national bank.
(3) A federally chartered or State-chartered savings association.
(4) A subsidiary of any of the entities listed under this definition.
"Billing cycle."In respect to open-end mortgage loans, the time interval between periodic billing dates as established by the mortgage note and subsequent modification to the obligation. A billing cycle shall be considered to be a monthly cycle if the closing date of the cycle is the same date each month or does not vary by more than four days from that date.
"Bona fide nonprofit organization."A person that:
(1) Has the status of a tax-exempt organization under section 501(c)(3) of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 501(c)(3)).
(2) Promotes affordable housing or provides homeownership education, or similar services.
(3) Conducts its activities in a manner that serves public or charitable purposes.
(4) Receives funding and revenue and charges fees in a manner that does not incentivize it or its employees to act other than in the best interests of its clients.
(5) Compensates its employees in a manner that does not incentivize employees to act other than in the best interests of its clients.
(6) Provides or identifies for the borrower mortgage loans with terms favorable to the borrower and comparable to mortgage loans and housing assistance provided under government housing assistance programs.
(7) Meets other standards as determined by the department.
"Branch."An office or other location, other than the principal place of business, where a person engages in the mortgage loan business subject to this chapter. The term does not include a remote location.
(1) (Deleted by amendment).
(2) (Deleted by amendment).
(3) (Deleted by amendment).
"Branch manager."The supervisor of a branch.
"Clerical or support duties."Any of the following:
(1) The receipt, collection, distribution and analysis of information common for the processing, servicing or underwriting of a mortgage loan.
(2) Communicating with a consumer to obtain the information necessary for the processing, servicing or underwriting of a mortgage loan, to the extent that the communication does not include:
(i) offering or negotiating mortgage loan rates or terms;
(ii) counseling consumers about mortgage loan rates or terms; or
(iii) offering or negotiating mortgage servicing terms.
"Commercial context."Acting for the purpose of obtaining anything of value for an individual, or for an entity or individual for which the individual acts, rather than exclusively for public, charitable or family purposes.
"Commission."The Banking and Securities Commission of the Commonwealth, as established under Subarticle C of Article XI-A of the act of May 15, 1933 (P.L.565, No.111), known as the Department of Banking and Securities Code.
"Consumer discount company."A licensee under the act of April 8, 1937 (P.L.262, No.66), known as the Consumer Discount Company Act.
"Delinquent."The date when an amount sufficient to cover a periodic payment of principal, interest and, if applicable, escrow becomes due and unpaid, and lasts until the time no periodic payment is due and unpaid, notwithstanding if the borrower is afforded a period after the due date to pay before the servicer assesses a late fee.
"Department."The Department of Banking and Securities of the Commonwealth.
"Discount points."Fees knowingly paid by the consumer for the purpose of reducing, and which in fact result in a bona fide reduction of, the interest rate or time-price differential applicable to the mortgage.
"Dwelling."As defined in section 103(v) of the Truth in Lending Act (Public Law 90-321, 15 U.S.C. § 1602(v)).
"Employee."
(1) An individual:
(i) Whose manner and means of performance of work are subject to the right of control of or are controlled by a person.
(ii) Whose compensation for Federal income tax purposes is reported or required to be reported on a W-2 form issued by the controlling person.
(2) The term includes such binding definition as may be issued by the Federal banking agencies in connection with their implementation of their responsibilities under the S.A.F.E. Mortgage Licensing Act of 2008 (110 Stat. 289, 12 U.S.C. § 5101 et seq.).
"Federal banking agency."Any of the following:
(1) The Board of Governors of the Federal Reserve System.
(2) The Office of the Comptroller of the Currency.
(3) The National Credit Union Administration.
(4) The Federal Deposit Insurance Corporation.
(5) (Deleted by amendment).
"Finder's fee."Any payment of money or other consideration for the referral of a mortgage loan to a licensee, except for consideration paid for goods or facilities actually furnished or services actually performed.
"First mortgage loan."A loan which is:
(1) made primarily for personal, family or household use; and
(2) secured by any first lien mortgage, deed of trust or equivalent consensual security interest on a dwelling or on residential real estate.
"First mortgage loan business."The mortgage loan business as applied to first mortgage loans.
"Habitually and repeatedly."Engaging in any activity at least four times in a calendar year.
"Holder."As defined in 12 Pa.C.S. § 6202 (relating to definitions).
"Immediate family."A parent, spouse, child, brother or sister.
"Installment sales contract."The term shall have the same meaning as "installment sale contract" as defined in 12 Pa.C.S. § 6202 (relating to definitions).
"Installment seller."As defined in 12 Pa.C.S. § 6202 (relating to definitions).
"Lease-purchase agreement."
(1) A deferred purchase of a dwelling or residential real estate whereby:
(i) An individual makes installment payments to the seller of the dwelling or residential real estate.
(ii) The seller retains title to the dwelling or residential real estate until some or all of the installment payments are completed.
(2) The term does not include an agreement whereby:
(i) An individual is not obligated to purchase the dwelling or residential real estate.
(ii) The final payment approximates the fair value of the dwelling or residential real estate or the anticipated fair value of the dwelling or residential real estate and is not a nominal amount.
"Licensee."A person who is licensed under this chapter.
"Loan processor or underwriter."An individual who performs clerical or support duties.
"Lock-in agreement."An agreement between a mortgage lender and a consumer whereby the mortgage lender guarantees, until a specified date, the availability of a specified rate of interest or specified formula by which the rate of interest and a specific number of discount points will be determined, if the mortgage loan is approved and closed by the specified date. If a specified date is not determinable, the mortgage lender may fulfill the requirement of this definition by setting forth with specificity the method by which the duration of the lock-in period will be determined.
"Loss mitigation option."An alternative to foreclosure offered by the owner, holder or assignee of a delinquent mortgage loan that is made available through the servicer to the borrower.
"Manufactured home."Both of the following:
(1) A manufactured home as defined in section 603(6) of the National Manufactured Housing Construction and Safety Standards Act of 1974 (Public Law 93-383, 42 U.S.C. § 5402(6)).
(2) A mobile home as defined in 75 Pa.C.S. § 102 (relating to definitions).
"Mortgage broker."A person who engages in the mortgage loan business by directly or indirectly negotiating or placing mortgage loans for others in the primary market for consideration.
"Mortgage lender."A person who engages in the mortgage loan business by directly or indirectly originating and closing mortgage loans with its own funds in the primary market for consideration.
"Mortgage loan."A first or secondary mortgage loan, or both, a lease-purchase agreement or a mortgage loan modification, as the context may require.
"Mortgage loan business."The business of:
(1) advertising, causing to be advertised, soliciting, negotiating or arranging in the ordinary course of business or offering to make or making mortgage loans; or
(2) servicing mortgage loans.
"Mortgage loan correspondent."(Deleted by amendment).
"Mortgage loan modification."An agreement that revises the terms of an existing mortgage loan, including an agreement to reduce mortgage loan payment amounts, balance or interest rate or to waive any accrued or prospective mortgage loan charges. The term does not include any agreement to refinance a mortgage loan into a new mortgage loan.
"Mortgage originator."
(1) An individual who, in a commercial context and habitually and repeatedly, does any of the following:
(i) Takes a mortgage loan application.
(ii) Offers or negotiates terms of a mortgage loan for compensation or gain.
(iii) Represents 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 the individual can or will perform the activities described in subparagraphs (i) and (ii).
(2) The term does not include any of the following:
(i) An individual who is involved only in extensions of credit relating to timeshare plans, as that term is defined in 11 U.S.C. § 101(53D) (relating to definitions).
(ii) An individual who performs only clerical or support duties and meets any of the following requirements:
(A) Who does so at the direction of and subject to the supervision and instruction of an individual who:
(I) Is licensed and registered in accordance with this chapter.
(II) Is not required to be licensed in accordance with section 6112(9) (relating to exceptions to license requirements).
(B) Who performs such duties solely with respect to transactions for which the individual who acts as a mortgage originator is not required to be licensed, in accordance with subparagraph (i), (v) or (vi).
(iii) An individual who performs only purely administrative or clerical tasks on behalf of a mortgage originator.
(iv) An individual who is a registered mortgage loan originator.
(v) An individual employed by an agency or instrumentality of the Federal Government or a corporation otherwise created by an act of the Congress of the United States or an agency or instrumentality of a state or local government, the District of Columbia or any territory of the United States, including the Pennsylvania Housing Finance Agency and other government housing finance agencies, who acts as a mortgage originator within the scope of employment.
(vi) An individual who is employed by a bona fide nonprofit organization who acts as a mortgage originator within the scope of employment.
(vii) An individual employed by a licensee or person exempt or excepted from licensure under this chapter who solely engages in mortgage loan modifications for existing mortgage loans held or serviced by that licensee or person and who does not otherwise act as a mortgage originator.
(viii) A loan processor or underwriter employed by a licensee or person exempt or excepted from licensure under this chapter, provided that the loan processor or underwriter:
(A) Is under the direct supervision and control of a licensed mortgage originator or registered mortgage loan originator.
(B) Acts as a loan processor or underwriter solely for the individual's employer.
(C) Does 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 the person can or will perform any of the activities of a mortgage originator.
(ix) An individual who is all of the following:
(A) An employee of a broker-dealer registered under section 301 of the act of December 5, 1972 (P.L.1280, No.284), known as the Pennsylvania Securities Act of 1972.
(B) Registered as a securities agent under section 301 of the Pennsylvania Securities Act of 1972.
(C) Engaged in recommending, referring or steering a borrower or prospective borrower in the manner provided under paragraph (1)(iii) of the definition of "offer or negotiate terms of a mortgage loan for compensation or gain" to a banking institution, licensed mortgage lender, licensed mortgage broker or person exempt from licensing in a manner incidental to and in the normal course of his or her securities brokerage activities.
(D) Not otherwise acting as a mortgage originator as defined in paragraph (1)(i), (ii) or (iii).
(E) Not in receipt of any compensation or gain for such activities from the person making or brokering the loan, or a borrower or prospective borrower.
(x) An individual who is all of the following:
(A) An employee of an insurance agency licensed under the act of May 17, 1921 (P.L.789, No.285), known as The Insurance Department Act of 1921.
(B) Registered as an insurance agent or broker under The Insurance Department Act of 1921.
(C) Engaged in recommending, referring or steering a borrower or prospective borrower in the manner provided under paragraph (1)(iii) of the definition of "offer or negotiate terms of a mortgage loan for compensation or gain" to a banking institution, licensed mortgage lender, licensed mortgage broker or person exempt from licensing in a manner incidental to and in the normal course of his or her insurance activities.
(D) Not otherwise acting as a mortgage originator as defined in paragraph (1)(i), (ii) or (iii).
(E) Not in receipt of any compensation or gain for such activities from the person making or brokering the loan, or a borrower or prospective borrower.
"Mortgage servicer."A person who engages in the mortgage loan business by directly or indirectly servicing a mortgage loan.
"Nationwide Mortgage Licensing System and Registry."The licensing system developed and maintained by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators.
"Net worth."Assets less liabilities and assets unacceptable to the United States Department of Housing and Urban Development for purposes of complying with 24 CFR § 202.5(n) (relating to general approval standards) or 202.8(b)(1) (relating to loan correspondent lenders and mortgagees), as applicable.
"Nonoriginating person."A person, other than an individual, that does not engage in the mortgage loan business but is required to have loan processors or underwriters employed or supervised and controlled by the person licensed as mortgage originators.
"Nontraditional mortgage loan."A mortgage loan other than a 30-year fixed rate mortgage loan.
"Offer or negotiate terms of a mortgage loan for compensation or gain."
(1) (i) Presenting for consideration by a borrower or prospective borrower particular mortgage loan terms;
(ii) communicating directly or indirectly with a borrower or prospective borrower for the purpose of reaching a mutual understanding about prospective mortgage loan terms; or
(iii) recommending, referring or steering a borrower or prospective borrower to a particular lender or set of mortgage loan terms, in accordance with a duty to or incentive from any person other than the borrower or prospective borrower.
(2) Receiving or expecting to receive payment of money or anything of value in connection with the activities described in paragraph (1) or as a result of any mortgage loan terms entered into as a result of those activities.
"Open-end loan."A mortgage loan made by a mortgage lender under this chapter pursuant to an agreement between the mortgage lender and the consumer whereby all of the following apply:
(1) The mortgage lender may permit the consumer to obtain advances of money from the licensee from time to time or the mortgage lender may advance money on behalf of the consumer from time to time as directed by the consumer.
(2) The amount of each advance, interest and permitted charges and costs are debited to the consumer's account and payments and other credits are credited to the same account.
(3) Interest is computed on the unpaid principal balance or balances of the account outstanding from time to time.
(4) The consumer has the privilege of paying the account in full at any time or, if the account is not in default, in monthly installments of fixed or determinable amounts as provided in the open-end loan agreement.
"Person."An individual, association, joint venture or joint-stock company, partnership, limited partnership, limited partnership association, limited liability company, business corporation, nonprofit corporation or any other group of individuals, however organized.
"Primary market."The market wherein mortgage loans are originated between a lender and a consumer.
"Principal place of business."The primary office of a person at which the person's books, records, accounts and documents are maintained.
"Purchase-money mortgage loan."A mortgage loan that is a residential mortgage transaction as defined in 12 CFR 226.2(a)(24) (relating to definitions and rules of construction).
"Qualifying individual."An individual identified by a mortgage broker, mortgage lender or mortgage servicer in the Nationwide Mortgage Licensing System and Registry who:
(1) Is a mortgage originator or meets the licensing requirements of a mortgage originator.
(2) Is a management-level officer assigned to the principal place of business of a mortgage broker, mortgage lender or mortgage servicer.
"Registered mortgage loan originator."An individual who complies with all of the following paragraphs:
(1) Meets the definition of mortgage originator and is an employee of:
(i) a banking institution or federally chartered or State-chartered credit union;
(ii) a subsidiary owned and controlled by a federally chartered or State-chartered credit union and supervised by a Federal banking agency; or
(iii) an institution regulated by the Farm Credit Administration.
(2) Is registered with and maintains a unique identifier through the Nationwide Mortgage Licensing System and Registry.
"Remote location."A location, other than a licensee's principal place of business or branch, where a mortgage originator sponsored by the licensee, a person excepted from this chapter or excepted from licensure under section 6112 or any other employee of the licensee, may engage in licensed activities on behalf of the licensee under all of the following conditions:
(1) The licensed activities are conducted under the supervision of the licensee.
(2) The licensee has written policies and procedures for the supervision of personnel working from the location.
(3) Access to the licensee's platforms and customer information is conducted in accordance with the licensee's comprehensive written information security plan.
(4) In-person consumer interaction does not occur at the remote location if it is his or her personal residence.
(5) (Deleted by amendment).
(6) The location is not advertised or represented to consumers as an operating location of the licensee or the licensee's employees who work at the location.
(7) The location is not owned or controlled by the licensee. For the purposes of this definition, a location shall not be considered owned or controlled by a licensee if the location is under the control of a subsidiary or affiliate of the licensee, is primarily used by the subsidiary or affiliate and is only used by the licensee on an incidental basis for the convenience of consumers.
"Residential real estate."Real property upon which is constructed or intended to be constructed a dwelling.
"Secondary mortgage loan."A loan which is:
(1) made primarily for personal, family or household use; and
(2) secured by any secondary lien mortgage, deed of trust or equivalent consensual security interest on a dwelling or on residential real estate.
"Secondary mortgage loan business."The mortgage loan business as applied to secondary mortgage loans.
"Service mortgage loan."A collecting or remitting payment or the right to collect or remit payments of principal, interest, tax, insurance or other payment under a mortgage loan.
"Single point of contact."An individual or team of personnel, each of whom has the ability and authority to discuss mortgage loan mitigation options with a borrower on behalf of a mortgage servicer. The mortgage servicer shall ensure that each member of the team is knowledgeable about the borrower's situation and current status.
"Take a mortgage loan application."Receiving a mortgage loan application for the purpose of facilitating a decision whether to extend an offer of mortgage loan terms to a borrower or prospective borrower or to accept the terms offered by a borrower or prospective borrower in response to a solicitation, whether the application is received directly or indirectly from the borrower or prospective borrower.
"Tangible net worth."(Deleted by amendment).
"Unique identifier."A number or other identifier assigned by the Nationwide Mortgage Licensing System and Registry.
"Wholesale table funder."(Deleted by amendment).