New Jersey Administrative Code
Title 3 - BANKING
Chapter 15 - RESIDENTIAL MORTGAGE LENDERS; CORRESPONDENT MORTGAGE LENDERS; MORTGAGE BROKERS; QUALIFIED INDIVIDUAL LICENSEES; MORTGAGE LOAN ORIGINATORS
Subchapter 2 - LICENSING
Section 3:15-2.1 - Who must be licensed; exemptions

Universal Citation: NJ Admin Code 3:15-2.1

Current through Register Vol. 56, No. 18, September 16, 2024

(a) The following provisions apply to mortgage lender and mortgage broker business licensees and to persons engaged in activity for which licensure as such is required:

1. Except as set forth in (e) below, no business entity shall act as a mortgage lender or mortgage broker without first obtaining a license;

2. A mortgage lender may act as a broker if proper disclosure is made; and

3. No person shall be licensed as a mortgage lender or mortgage broker unless one officer, director, partner, owner or principal is a qualified individual licensee of that same type.

(b) A qualified individual licensee licensed as a mortgage lender or mortgage broker may act as a mortgage loan originator without obtaining a separate license.

(c) A mortgage loan originator shall be employed as an originator by only one business licensee at a time and shall be subject to direct supervision and control by that business licensee.

(d) A loan processor or individual who is an independent contractor shall not act as a processor or underwriter unless licensed as a mortgage loan originator.

(e) The following persons shall be exempt from the licensure requirements:

1. Depository institutions, but subsidiaries and service corporations of these institutions shall not be exempt;

2. A registered mortgage loan originator who is registered under the Federal "Secure and Fair Enforcement for Mortgage Licensing Act of 2008," Title V of Pub. L. 110-289 ( 12 U.S.C. §§ 5101 et seq.);

3. A licensed attorney who negotiates the terms of a residential mortgage loan on behalf of a client as an ancillary matter to the attorney's representation of the client, unless the attorney is compensated by a mortgage lender, mortgage broker or mortgage loan originator; and

4. A person licensed as a real estate broker or salesperson pursuant to 45:15-1 et seq. and not engaged in the business of a residential mortgage lender or residential mortgage broker. Any person holding a license under the Act as a mortgage lender or mortgage broker shall be exempt from the licensing and other requirements of 45:15-1 et seq. in the performance of those functions authorized by the Act, however:
i. With regard to the exemption set forth at 17:11C-55, a real estate broker or salesperson shall not be deemed to be engaged in the business of a mortgage lender or mortgage broker if:
(1) The real estate broker receives $ 250.00 or less at the closing of the mortgage loan for reimbursement of expenses incurred in providing specific mortgage related services in connection with a particular real estate sale or real estate brokerage service;

(2) The real estate broker itemizes in writing the specific services provided by the real estate broker or by the salesperson licensed with the broker and submits that itemized list to the mortgage lender prior to closing; and

(3) The real estate broker or salesperson receives a real estate commission in connection with the transaction.

ii. For the purposes of (e)4i above, expenses are deemed to be incurred in providing the specific mortgage related services only if the expenses are exclusively attributed to, and allocated to, those services and are not used to defer the general overhead expenses of the real estate broker, salesperson or office or to defer any cost attributable to the real estate business or any non-mortgage related business conducted by the real estate broker, salesperson or other office personnel. Expenses that are general overhead, and therefore not reimbursable, shall include, but not be limited to: mortgage or lease expenses, rent, utilities, insurance, depreciation and advertising; office equipment and supplies used for any purpose other than mortgage related services, and telephone expenses attributed to any purpose other than mortgage related services. Expenses for office equipment, supplies and telephone usage that are exclusively attributed to mortgage related services are not general overhead and are reimbursable within the $ 250.00 limit.

iii. For purposes of (e)4i above, the time spent by a real estate broker, real estate salesperson or a salaried employee of a real estate broker providing specific mortgage-related services is reimbursable provided that:
(1) The reimbursement shall be paid by the mortgage lender directly to the real estate broker;

(2) The reimbursement shall be in the amount itemized in the statement of reimbursable expenses submitted to the mortgage lender prior to closing;

(3) The rate used to determine the amount of the reimbursement for mortgage-related services personally provided by the real estate broker, or provided by a non-salaried salesperson employed or retained by the real estate broker, shall not substantially exceed the average rate of regular (non-overtime) compensation of the real estate broker's support staff;

(4) The rate used to determine the reimbursement for mortgage-related services provided by a salaried employee of the real estate broker shall not exceed that employee's regular (non-overtime) rate of compensation;

(5) Any reimbursement paid to the real estate broker for mortgage-related services provided by a non-salaried real estate salesperson shall be passed through in the full amount itemized on the statement of reimbursable expenses submitted to the mortgage lender prior to closing; and

(6) Any reimbursement passed through by the real estate broker to a non-salaried salesperson shall be in addition to any real estate commission generated by the sales transaction to which the specific mortgage services related and was paid to the salesperson.

iv. The mortgage lender shall give a copy of the itemized list of reimbursable services, that was received from the real estate broker pursuant to (e)4i(2) above, to the borrower prior to closing and shall retain a copy on file for at least three years following the closing of the loan;

5. Any employer, other than a mortgage lender, providing mortgage loans to employees as a benefit of employment which are at an interest rate which is not in excess of the usury rate in existence at the time the loan is made, as established in accordance with the law of this State, and on which the borrower has not agreed to pay, directly or indirectly, any charge, cost, expense or any fee whatsoever, other than that interest;

6. The State of New Jersey or a municipality, or agency or instrumentality thereof, which, in accordance with a housing element that has received substantive certification from the Council on Affordable Housing pursuant to the Fair Housing Act, P.L. 1985, c. 222 (52:27D-301 et seq.), or in fulfillment of a regional contribution agreement with a municipality that has received a certification, employs or proposes to employ municipally generated funds, funds obtained through any State or Federal subsidy, or funds acquired by the municipality under a regional contribution agreement, to finance the provision of affordable housing by extending loans or advances, the repayment of which is secured by a lien, subordinate to any prior lien, upon the property that is to be rehabilitated; and

7. Any individual who offers or negotiates terms of a mortgage loan:
i. With or on behalf of an immediate family member of that individual; or

ii. Secured by a dwelling that serves as that individual's residence.

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