February  22, 2005

Interpretive Letter To Licensees under Chapter 13 Residential Lending, Brokerage and Servicing (Act) 45-13-101 to 45-13-128

The Department has been asked to provide further clarification regarding exclusions from the registration requirements for mortgage loan originators, defined in Public Chapter 747 of the Acts of 2004 which amended the Residential Lending, Brokerage and Servicing Act Tennessee Code Annotated Section 45-13-101 effective January 1, 2005,  as outlined in Department Bulletin C-04-6.  This letter is intended to provide such clarification.

Be advised that the information and further clarification provided in this letter are not intended to stand alone and must be considered in context with the definitions set forth in Public Chapter 747, Department Bulletin C-04-6, and in proposed Rule 0180-17-.11.

Public Chapter 747 provides that the term “mortgage loan originator” does not include an employee of a licensee or registrant whose job responsibilities are limited to clerical tasks.  The Department, as set forth in Bulletin C-04-6, has interpreted “clerical tasks” to include such tasks as:

Typing documents from drafts prepared by others, answering telephones, making appointments, maintaining schedules and calendars for others, maintaining office supplies and inventory, and maintaining files.

As stated in Bulletin C-04-6, the Department recognizes that an employee who engages in clerical tasks such as those listed above might have contact with the borrower or potential borrower.  Provided that the contact is limited to contact in a clerical capacity, that employee would not need to be registered.

The Department considers that clerical tasks do not include contacting borrowers or potential borrowers whether by telephone, mail, electronic means, or in person for the purpose of soliciting or negotiating with the borrowers or potential borrowers regarding mortgage loan terms and availability.  Obviously, as is consistent with Bulletin C-04-6, an individual engaging in these types of tasks would be subject to registration as a mortgage loan originator.

Additionally, the Department, in Bulletin C-04-6, has stated that “back office” employees whose job duties are limited to underwriting tasks are not subject to registration.  Moreover, the Department recognizes that employees engaged solely in underwriting tasks might, in the course of performing those tasks, need to contact a borrower or potential borrower for the purpose of verifying or obtaining documents or information which had previously been submitted by the borrower or potential borrower or previously requested by the licensee or registrant or registered mortgage loan originator of the licensee or registrant.  To the extent that this contact is not for the purposes as follows, then the person need not be registered as a mortgage loan originator:

• soliciting or offering to make a mortgage loan;

• explaining or recommending specific terms, conditions or benefits of any mortgage loan available from or through a licensee or registrant, whether or not the borrower has made or makes application;

• assisting the borrower with the preparation of a mortgage loan application or other documents; or

• explaining any term or aspect of any disclosure or agreement given at or after a mortgage loan application is received 

If individual licensees or registrants have specific questions, the Department remains open to discussing such questions with that licensee or registrant in an effort to help reconcile any lingering concerns. Additional questions should be directed to the Department’s Compliance Division at (615) 741-3186.

Sincerely,

Michael Igney
Assistant Commissioner/Compliance Division