Term
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Definition
| Anything of value or any benefit, including points, commission, bonuses, referral fees, loan origination fees and other similar fees but excluding periodic interest, resulting from the application of the note rate of interest to the outstanding principal balance remaining unpaid from time to time. |
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Term
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Definition
| A spouse, child, sibling, parent, grandparent, grandchild, stepparent, stepchild or stepsibling whether related by adoption or blood. |
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Term
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Definition
| A natural person who, for compensation or gain or in the expectation of compensation or gain, takes a residential mortgage application, offers or negotiates terms of a residential mortgage loan. |
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Term
| Loan Processor or Underwriter |
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Definition
| An individual who performs clerical or support duties as an employee at the direction of and subject to the supervision and instruction of a person who is licensed or who is exempt from licensure. |
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Term
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Definition
| When a residential mortgage loan borrower is in default or default is in the foreseeable future and an individual works with the borrower on behalf of the residential mortgage loan servicer to modify, either temporarily or permanently, the obligation or to otherwise mitigate loss on an existing residential mortgage loan. |
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Term
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Definition
| A person who is not exempt from licensure who, for compensation or in the expectation of compensation, either directly or indirectly makes, negotiates or offers to make or negotiate a mortgage banking loan or a mortgage loan. |
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Term
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Definition
| A loan which is funded exclusively from the mortgage banker’s own resources, which is directly or indirectly secured by a mortgage or deed of trust or any lien interest on real estate located in Arizona and which is created with the consent of the owner of the real property. For the purposes of this definition, “own resources” means cash, corporate capital or warehouse credit lines. |
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Term
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Definition
| A person who, for compensation or in the expectation of compensation, either directly or indirectly makes, negotiates or offers to make or negotiate a mortgage loan, and who is not exempt by regulation. |
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Term
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Definition
| A loan secured by a mortgage or deed of trust or any lien interest on real estate located in Arizona created with the consent of the owner of the real estate. |
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Term
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Definition
| The day by which all documents relating to the loan have been executed and recorded and all monies have been accounted for under the terms of the escrow instructions. |
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Term
| Registered Loan Originator |
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Definition
| An employee of either a depository institution, a subsidiary that is owned and controlled by a depository institution and regulated by a federal banking agency, or an institution regulated by the farm credit administration, who is a mortgage loan originator registered with and maintaining a unique identifier through the NMLS. |
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Term
| Residential Mortgage Loan |
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Definition
| A mortgage loan that has security in the form of a residential dwelling of one to four units. |
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Term
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Definition
| The number assigned to a mortgage loan originator by the Nationwide Mortgage Licensing System (NMLS). |
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Term
| What are the prohibitions of the Superintendent, Deputy, and department personnel? |
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Definition
-Being indebted to any financial institute which they regulate unless incurred prior to employment.
-Cannot be an officer, director, or employee of any regulated entity. |
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Term
| What are the duties and responsibilities of the Superintendent? |
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Definition
| -All aspects of licensing including background checks. |
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Term
| What is included in the consumer information brochure published by the Superintendent? |
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Definition
-Finance charges permitted by the state.
-Types of insurance offered but not required by law to be purchased with a loan.
-Interest rate limits.
-Consumer rights and recourse from unfair practitioners. |
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Term
| What is The Revolving Fund? |
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Definition
| Where investigative costs, attorney fees or civil penalties recovered by the state are deposited. Any unencumbered portion exceeding $200K at the end of the fiscal year is deposited in the receivership revolving fund. It is used for investigative proceedings or prosecuting civil actions. |
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Term
| What are the requirements for Superintendent? |
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Definition
| At least 5 years experience in the last 15 as an executive officer, examiner or supervisor for a financial institution, state or agency of the US. |
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Term
| Who is the chief officer of AZDFI, who appoints and what is the term. |
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Definition
| Chief officer is the Superintendent. Appointed by the governor for a 4 year term. |
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Term
| What is the primary statute regulating mortgage activity? |
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Definition
| AZ Revised Statute Title 6 Chapter 9. |
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Term
| What does AZDFI stand for? |
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Definition
| Arizona Department of Financial Institutions. |
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Term
| What does the S.A.F.E Act stand for? |
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Definition
| Secure and Fair Enforcement for Mortgage Licensing Act of 2008(S.A.F.E. Act). |
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Term
| What are the S.A.F.E. Act objectives? |
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Definition
1. Provide for streamlined and uniform application and reporting for mortgage professionals.
2. Provide a comprehensive database of mortgage professionals to improve accountability and the flow of information between regulators.
3. Provide easily accessible information to consumers and increase consumer protection. |
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Term
| What are the three unique identifier licenses? |
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Definition
Mortgage loan originator license.
Mortgage broker license.
Mortgage banker license. |
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Term
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Definition
| The MU1 form is used by mortgage brokers and mortgage bankers. |
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Term
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Definition
| The MU2 form must be submitted along with the MU1 form for each owner or executive officer of a mortgage broker or mortgage banker that is not a natural person. |
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Term
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Definition
| The MU3 form is submitted along with the MU1 when the company has branch offices. |
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Term
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Definition
| The MU4 form is used by individual mortgage loan originators to apply for licensure through the NMLS. |
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Term
| Bond and licensing fee for mortgage brokers. |
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Definition
| $800 application fee. $10,000 surety bond or $15,000 for licensees whose investors include non-institutional investors. |
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Term
| Bond and licensing fee for mortgage bankers. |
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Definition
| $1,500 application fee. Surety bond of $25,000 - $100,000 depending on base of total assets plus unpaid balance of loans. |
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Term
| Bond and licensing fee for mortgage loan originators. |
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Definition
| $350 application fee. Surety bond: $100 into recovery fund OR covered by employer’s surety bond of at least $200,000. |
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Term
| Pre-licensing and continuing education for mortgage brokers. |
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Definition
| 24 pre/12 hours continuing. |
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Term
| Pre-licensing and continuing education for mortgage bankers. |
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Definition
| None for pre-license. If applicant is natural person: 12 hours. If applicant is not natural person: 12 hours for Responsible Individual. |
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Term
| Pre-licensing and continuing education for mortgage bankers. |
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Definition
| 20 hours pre/ 8hours continuing. |
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Term
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Definition
| Responsible for the licensee under their employment/sponsorship...must be a resident of the state. Responsible Individual must be designated to oversee the operations of the office. This person must be an officer, director, member, partner, employee or trustee of the licensee and cannot be an independent contractor. |
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Term
| An individual engaged solely as a loan processor or underwriter unless working as an independent contractor. |
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Definition
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Term
| A person who only performs real estate brokerage activities and who is licensed properly unless the person is compensated by a lender, a mortgage broker or any other mortgage loan originator. |
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Definition
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Term
| A person solely involved in extensions of credit relating to a timeshare plan. |
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Definition
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Term
| An employer making a mortgage loan to an employee. |
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Definition
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Term
| A person who makes five or fewer mortgage loans per calendar year. |
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Definition
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Term
| A registered mortgage originator. Mortgage loan originators who are employed by depository institutions and other federally regulated entities are not required to be licensed. |
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Definition
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Term
| An individual offering or negotiating loan terms for a residential mortgage loan on his or her residence or for an immediate family member. |
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Definition
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Term
| A person who is a Responsible Individual for a mortgage broker or mortgage banker and who does not act as a mortgage loan originator. |
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Definition
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Term
| An employee of a commercial mortgage banker. |
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Definition
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Term
| A person who, as seller of real property, receives one or more mortgages or deeds of trust as security for a purchase money obligation. |
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Definition
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Term
| A licensed attorney negotiating loan terms on behalf of a client as an ancillary matter to the attorney’s normal representation of the client unless the attorney is compensated by a lender. |
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Definition
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Term
| A manufactured home retailer performing only clerical or support duties who receives no compensation or gain. |
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Definition
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Term
| An individual who is employed by a residential mortgage loan servicer if the individual is involved solely in loss mitigation efforts, unless the United States Department of Housing and Urban Development determines that the S.A.F.E. Act of 2008 requires the individual to be licensed as a mortgage loan originator. |
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Definition
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Term
| A person who takes back a purchase money mortgage in connection with the sale of residential real estate. |
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Definition
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Term
| Education requirements for MLOs. |
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Definition
Satisfactorily complete a 20-hour NMLS-approved course of study during the two-year period immediately preceding the time of application which includes:
1. Three hours of federal law.
2. Three hours of ethics including instruction on fraud, consumer protection and fair lending issues.
3. Two hours relating to nontraditional mortgage products.
4. Four hours of Arizona specific law and regulations.
5. Eight additional hours as defined by the Superintendent. |
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Term
| MLO renewal licensing includes: |
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Definition
Complete eight hours of NMLS-approved continuing education units in the year immediately preceding the renewal including:
1. Three hours of federal law
2. Two hours of ethics
3. Two hours of training related to lending standards for the nontraditional mortgage product marketplace
4. One hour of elective education |
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Term
| Licenses not renewed by December 31st are? |
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Definition
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Term
| Who Needs a Mortgage Broker License? |
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Definition
| A person can’t act as a mortgage broker without first being licensed. A person who brokers only commercial mortgage loans needs to obtain either a mortgage broker license or a commercial mortgage broker license. A person who brokers residential mortgage loans may only be licensed as a mortgage broker and not as a commercial mortgage broker. A mortgage broker can be a natural person or a legal entity such as a corporation. |
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Term
| Who Needs a Mortgage Banker License? |
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Definition
A person (natural person or legal entity) must be licensed to act as a mortgage banker. A mortgage banker makes loans funded exclusively from its own resources which can include a warehouse line of credit. However, mortgage brokers may use warehouse lines of credit as well. What sets mortgage bankers apart from mortgage brokers in Arizona is that with a mortgage banker license, a person can service mortgage loans. A mortgage broker license does not permit the servicing of mortgage loans.
A commercial mortgage banker can both originate and service commercial loans. A mortgage banker can originate and service both residential and commercial loans. |
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Term
| A person does business and is regulated under any other law of Arizona, any other state or of the United States, relating to banks, savings banks, trust companies, savings and loan associations, profit sharing and pension trust, credit union, insurance companies or consumer lenders. |
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Definition
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Term
| The loan is made using the person’s own money for his/her own investment with no intention of selling the loan, and the person is not engaged in the business of making mortgage loans. |
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Definition
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Term
| The loan has been originated and processed by an Arizona licensee and is being funded by a person who does not maintain a place of business in Arizona and who does not solicit borrowers in Arizona. |
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Definition
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Term
| A seller of a piece of real estate is providing seller financing for the buyer. |
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Definition
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Term
| A licensed attorney, who is not actively involved in negotiating mortgage loans, provides mortgage service for a client in the course of his/her practice. |
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Definition
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Term
| A contractor receives a lien for materials or services for the improvement of a property without the consent of the owner. |
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Definition
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Term
| The loan is being made by an agency of the state or of the United States. |
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Definition
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Term
| The loan is being made by a nonprofit certified by the U.S. Small Business Administration whose primary activity consists of providing financing for business expansion. |
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Definition
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Term
| The loan is being made by an institutional investor as defined earlier, unless the institutional investor makes a mortgage loan other than a commercial loan. |
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Definition
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Term
| Mortgage banker/broker licensee qualifications. |
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Definition
| Mortgage broker and mortgage banker license applicants are both required to have at least three years’ experience in the lending industry during the five years immediately preceding the time of the application. If the mortgage broker or mortgage banker is not a natural person, then the entity must be registered to do business in the state on the date the license is granted. |
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Term
| Banker to Broker Conversion. |
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Definition
| In the update made to the regulation in 2009 in order to bring it into compliance with the S.A.F.E. Act, the Arizona legislature added a provision for a one-time mortgage banker to mortgage broker conversion option. If a mortgage banker licensee funds 150 or fewer loans in the immediately preceding calendar year, the licensee may apply at the time of license renewal to the Department for a conversion to a mortgage broker license. The conversion application must be done in the manner prescribed by the Superintendent, and the approval of the conversion is at the discretion of the Superintendent. |
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Definition
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