441-850-0005 Definitions As used in OAR chapter 441, divisions 850 to 890, unless the context otherwise requires: (1) “Advertising” means any form of sales or promotional materials used in connection with the mortgage banker or mortgage broker business including, but not limited to, materials that may appear: (a) In newspapers, magazines, leaflets, flyers, catalogs, direct mail literature, or other printed material; (b) On radio or television; (c) On an inside or outside sign or display, or a window display; (d) In a facsimile; (e) In point-of-sale literature, price tags, signs, and billboards; or (f) Online, such as on the internet, email, or via social media. (2) “At least as prominently disclosing” means displaying in the same or most similar type, size, font, color, and general location in the advertisement as the featured term. (3) “Branch office” means a location, separate from the principal place of business of a mortgage banker or mortgage broker, where a mortgage banker, mortgage broker or mortgage loan originator performs the activities described in ORS 86A.100(3)(a) and 86A.100(5)(a). (4) “Clients’ Trust Account” means an account held in a federally-insured financial institution into which trust funds are deposited. (5) “Compensation or gain” means anything of economic value that is paid, loaned, granted, given, donated, or transferred to a person or entity for or inconsideration of services, personal or real property, or another thing of value. (6) “Contract or agreement for servicing the residential mortgage loan” as used under section 2(12)(b) of 2017 Or Laws ch 636 means an agreement for the ongoing servicing of a loan and does not include one-time transfers of funds such as those associated with the origination or closing of a loan. (7) “Control person” means a managing partner, director, principal, executive officer or other person occupying a similar position or performing similar functions for a person licensed as a mortgage banker or a mortgage broker. (8) "Director" means the Director of the Department of Consumer and Business Services. (9) “Deficiency” means information contained in the application for a mortgage banker, mortgage broker, or mortgage loan originator license that is inaccurate, incomplete or otherwise not in conformance with applicable law, policy or provisions of the NMLS Policy Guidebook. (10) "Department" means the Department of Consumer and Business Services. (11) “Employee” means any employment relationship, acknowledged by both the employed individual and the mortgage banker or mortgage broker, which meets the following conditions: (a) The employee receives payment through the mortgage banker or mortgage broker in a manner wherein deductions for federal unemployment taxes, Federal Insurance Contributions Act taxes, and other such federal and state taxes have been withheld by the mortgage banker or mortgage broker; (b) The mortgage banker or mortgage broker has the right to hire and terminate the employee, and hire and terminate the employee's assistants; (c) The mortgage banker or mortgage broker provides the methods and procedures for performing the employee's services; (d) The mortgage banker or mortgage broker supervises the employee in the conduct of the employed individual's business and supervises the employee's compliance with applicable statute and rules; and (e) The employee does not act in any capacity as an employee or independent contractor for another mortgage banker or mortgage broker. (12) “Experienced person” means the control person that possesses the required experience under ORS 86A.106 in the mortgage business, negotiating loans, or in lending. (13) “Financial institution” has the same meaning given to that term in ORS 706.008. (14) “Form MU1” means the Uniform Mortgage Lender/Mortgage Broker Form, published by the Conference of State Bank Supervisors on April 16, 2012, and available at http://mortgage.nationwidelicensingsystem.org/slr/common/policy/Pages/default.aspx. (15) “Form MU2” means the Uniform Mortgage Biographical Statement & Consent Form, published by the Conference of State Bank Supervisors on April 16, 2012, and available at http://mortgage.nationwidelicensingsystem.org/slr/common/policy/Pages/default.aspx. (16) “Form MU3” means the Uniform Mortgage Branch Office Form, published by the Conference of State Bank Supervisors on April 16, 2012, and available at http://mortgage.nationwidelicensingsystem.org/slr/common/policy/Pages/default.aspx. (17) “Form MU4” means the Uniform Individual Mortgage License/Registration & Consent Form, published by the Conference of State Bank Supervisors on April 16, 2012, and available at http://mortgage.nationwidelicensingsystem.org/slr/common/policy/Pages/default.aspx. (18) “Independent accountant” means a certified public accountant or a public accountant who holds an Oregon permit under ORS 673.150 or similar permit or license from another state or province. (19) “Mortgage loan originator employed by the mortgage banker or mortgage broker” means every mortgage loan originator operating under the authority or sponsorship of a mortgage banker or mortgage broker’s license, regardless of whether the mortgage loan originator is an employee of the mortgage banker or mortgage broker or purports to act as an agent or independent contractor for the mortgage banker or mortgage broker; (20) “Liquidity” means unrestricted cash and cash equivalents, investment grade securities that are available for sale or held for trade, and unused/available portion of committed servicing advance lines. (21) “Loan terms” include, but are not limited to: (a) The provisions related to the payment amounts, expressed either as a percentage or dollar amount; (b) The length of the loan; (c) The market or fully indexed rate; (d) The start rate; (e) The life cap rate; and (f) Whether the loan permits negative amortization. (22) “Loan-to-value ratio” means the ratio between the amount of a mortgage loan and the value of the property pledged as security, expressed as a percentage. (23) “Lock agreement” means an agreement with a borrower made by a mortgage banker, mortgage broker or mortgage loan originator, in which the mortgage banker, mortgage broker or mortgage loan originator agrees that, for a specified period of time, a specific interest rate or other financing term will be the rate or term at which it will make a loan available to that borrower. (24) “Material litigation” means any past or pending litigation, which would be relevant to the director's action on an application for a mortgage broker or mortgage banker license, including but not limited to the following types of litigation: (a) Any civil action within the previous ten years from the date of the application, including suits filed in civil court, administrative actions, arbitration proceedings, or alternative dispute resolutions, resulting in damages or penalties of $10,000 or more assessed against the applicant; (b) Any pending civil action including suits filed in civil court, administrative actions, arbitration, or alternative dispute resolution, seeking damages or penalties of $10,000 or more against the applicant; and (c) Any bankruptcy filing or declaration of bankruptcy within the previous ten years from the date of the application regardless of final disposition. (25) "Neutral escrow depository" means the deposit of money with an escrow agent licensed under ORS 696.511. (26) “NMLS Call Report” means a report of condition and loan activity accepted by the NMLS as of January 1, 2016. (27) “NMLS Policy Guidebook” means the Conference of State Bank Supervisors/American Association of Residential Mortgage Regulators NMLS Policy Guidebook for Licensees, published by the State Regulatory Registry, updated on August 1, 2011, and available at http://mortgage.nationwidelicensingsystem.org/slr/common/policy/Pages/default.aspx. (28) “Originates” as used under section 3(2)(a) of 2017 Or Laws ch 636 § means providing a service involved in the creation of a residential mortgage loan, including but not limited to the taking of the loan application, loan processing, the underwriting and funding of the loan, and the processing and administrative services required to perform these functions. (29) “Principal place of business” means that location, designated by the mortgage banker or mortgage broker, where the owners, officers, directors or other control persons conduct business and maintain books and records. (30) “Savings statement” means written material given to the consumer which outline how much a consumer may save in interest costs if they make additional payments above the required minimum monthly payment on their proposed or current mortgage. (31) “Supervisor” means a partner, officer, branch manager, or other experienced person with management or supervisory responsibilities who is an employee of the mortgage banker or mortgage broker. (32) “Tangible net worth” means total equity minus receivables due from affiliated entities, minus goodwill and other intangible assets, and minus the carrying value of pledged assets net of the associated liabilities of the pledged assets. (33) “Trust Funds” mean those funds deposited into a trust account or with a neutral escrow depository. Trust funds shall include, but are not limited to: (a) All funds received by a licensee or persons authorized to act on behalf of the licensee from or on behalf of a client for payment of services to be provided by persons other than the licensee in connection with processing, arranging, or making a mortgage banking loan or mortgage loan; (b) All funds received by a licensee or persons authorized to act on behalf of a licensee from or on behalf of a borrower for payment of principal, interest or taxes on a mortgage banking loan or mortgage loan, but shall not include such funds where the licensee and the lender have an agreement providing for the disposition of such funds, and the financial statements of licensee are audited on an annual basis in accordance with generally accepted auditing standards; and (c) All funds received by a licensee or persons authorized to act on behalf of a licensee from or on behalf of a client for payment of services to be provided by a licensee in connection with processing, arranging, or making a mortgage banking loan or mortgage loan by the licensee, except for those funds received by a licensee on a nonrefundable basis under the provisions of OAR 441-875-0030. (d) For purposes of this section, “licensee” means a mortgage banker, a mortgage broker or a mortgage loan originator. Statutory/Other Authority: ORS 86A.136, ORS 86A.242 & ORS 86A.306 Statutes/Other Implemented: ORS 86A.100, ORS 86A.200 & ORS 86A.306 History: FSR 6-2018, minor correction filed 05/16/2018, effective 05/16/2018 FSR 3-2018, amend filed 04/16/2018, effective 04/17/2018 FSR 9-2017, temporary amend filed 10/20/2017, effective 10/20/2017 through 04/17/2018 FCS 5-2014, f. 9-18-14, cert. ef. 1-1-15 FCS 4-2012, f. & cert. ef 8-1-12 FCS 14-2009, f. 12-30-09, cert. ef. 1-4-10 FCS 11-1994, f. 11-4-94, cert. ef. 11-15-94 FCS 3-1993, f. & cert. ef. 11-15-93