April 25, 2008
Re: [---] Licensing Requirements
In a letter dated, April 22, 2008 to the undersigned, you asked whether certain activities, relating to mortgage loans made in this state, would trigger the licensing or registration requirement of Article 12-D of the Banking Law.
Section 590(2) of Article 12-D prohibits any:
(a) [P]erson, partnership, association, corporation or other entity [from] engage[ing] in the business of making five or more mortgage loans in anyone calendar year without first obtaining a license from the superintendent.
And also prohibits any:
(b) [P]erson, partnership, association, corporation or other entity [from] engage[ing] in the business of soliciting, processing, placing or negotiating a mortgage loan or offering to solicit, process, place or negotiate a mortgage loan in this state without first being registered with the superintendent as a mortgage broker.
According to your letter, [---] will not "originate, fund, or service" any mortgage loan, nor will it ever be a "payee entitled to payment, or has authority to enforce the terms of any of the loans." Based on your representation that [---] will not be involved in any of the above-stated enumerated factors, it is the Department's position that [---] will not be "making" mortgage loans in this state, and, therefore, has no objection to [---] operating an internet website "directed exclusively to lenders, [---]'s customers, [which] contains for their benefit information on [---]'s programs, including types of programs available, eligibility requirements1 and rates," without obtaining a license as a mortgage banker.
Further, your letter stated that "[---] [will] not provide loan applications to potential homebuyers, [nor will it] accept loan applications from potential homebuyers, provide assistance to potential homebuyers in preparing loan applications, or negotiate or process mortgage loans." Based on this representation, it is the Department's position that [---] will not be "engaging in the business of soliciting, processing, placing or negotiating a mortgage loan or offering to solicit, process, place or negotiate a mortgage loan," and, therefore, also has no objection to [---] operating a website as described above without obtaining a registration as a mortgage broker.
In reaching these conclusions, we have also noted that you represented that "[---] [will] not directly or indirectly receive compensation or fees from lenders or potential homebuyers for such information or referrals."
Finally, considering the "no objection" conclusions above, it is the Department's position that a determination relating to [---]'s status as an exempt organization is unnecessary, and, therefore, is not reaching a conclusion on that issue at this time.
I trust the foregoing is responsive to your inquiry.
Very truly yours,
Harry C. Goberdhan
1 [---] does not make eligibility determinations. The participating exempt or licensed lender will determine eligibility, take and process the loan application, and fund the loan.