2023 Laws of Puerto Rico › TITLE SEVEN - Banking (§§ 1 — 3116) › PART VII - Other Financial Institutions (§§ 3001-3012 — 3116) › Subchapter I - General Provisions and Definitions (§§ 3051 — 3051a) › § 3051 - Definitions

For purposes of this chapter, the following definitions are adopted:
(a) Liquid assets.— An asset that can be converted into cash in a short time, with little or no loss in value, including cash, bank deposits, and securities with a maturity date of less than three (3) months.
(b) Mortgage loan servicing.— The delivery of periodical account statements to the client; the processing of mortgage loan payments; the receipt of payments and the application thereof to the payments of principal of, interest on, and late fees of the loan, as well as deposits to any account or escrow accounts; payment of property taxes and insurance premiums during the entire term of a mortgage loan; the custody of records and documents related to the mortgage loan and the rendering of supplementary services; and compliance with the applicable laws, among others.
(c) Federal banking agencies.— The Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Office of Thrift Supervision, the National Credit Union Administration, and the Federal Deposit Insurance Corporation.
(d) Bank.— An institution engaged in the banking business, including banks, savings and loan associations, savings and credit unions, or trust companies organized under the laws of the Government of Puerto Rico, the United States of America, or any of its states or territories, or any foreign country, and authorized to do business in Puerto Rico by the corresponding entities.
(e) Capital.— The sum of all resources and assets used to create and start a business. It is the amount of money invested in a business by its owners, partners, or stockholders.
(f) Service fee.— The amount of money, rate, discount, or commission that a mortgage institution, mortgage broker, or mortgage loan originator directly, indirectly, or disguised as a compensation for services rendered in such capacity charges to its customers.
(g) Commissioner.— The Commissioner of the Office of Financial Institutions of Puerto Rico.
(h) Licensee.— A person who holds a license as a financial institution issued by the Commissioner under this chapter.
(i) COSSEC.— The Public Corporation for the Supervision and Insurance of Cooperatives in Puerto Rico.
(j) Mortgage broker.— Any natural or juridical person, whether for profit or not, that offers and contracts services to facilitate, process, or obtain mortgage loans for third parties to acquire real property in exchange for a service fee that may be direct, indirect, ostensible, concealed, or disguised from the person for whom the same is negotiated, processed, planned, granted, or obtained, as well as from any other person that is part of the transaction with whom a written agreement has been entered into. It shall also include any person who assists a consumer in obtaining or applying to obtain a mortgage loan by advising on loan terms, preparing loan packages, or collecting information on behalf of the consumer.
(k) Real estate brokerage.— Any activity that involves offering or providing real estate brokerage services to the public, including acting as a real estate agent, broker, or business for a buyer, seller, lessor, or lessee of real property, bringing together parties interested in the sale, purchase, lease, rental, or exchange of real property; negotiating, on behalf of any of the parties, any portion of a contract related to the sale, purchase, lease, rental, or exchange of real property, except with regards to financing in these type of transactions; participating in any activity for which a person engaged in the real estate business must be registered or licensed as a real estate agent or real estate broker under any applicable law; and offer to participate in any activity or act in any capacity as described in this definition.
(l) Financial statement.— A document that shows the financial situation, the results of the operations, and the cash flow statement of an institution, and which has been prepared in accordance with generally accepted accounting principles or principles that may be adopted by certified public accountants.
(m) Immediate family member.— A spouse, child, sibling, parent, grandparent, or grandchild. This shall also include stepparents, stepchildren, stepsiblings, and adoptive relationships.
(n) Financing.— The delivery or remittance of a legal tender in Puerto Rico by a person to another to pay the price of goods or services received by a third party with the express obligation of said third party to repay the amount, with or without interest, to the person that delivered or remitted the same.
(o) Mortgage.— A legal instrument that describes and establishes encumbrances on real property to secure the payment of a debt.
(p) Unique identifier.— An identification number or code assigned by the Nationwide Mortgage Licensing System And Registry to identify loan originators.
(q) Individual.— A natural person.
(r) Depository institution.— Any bank, as defined in subsection (d) of this section.
(s) Mortgage institution.— Any natural or juridical person whose main business or activity is to originate, finance, refinance, close, sell, and service mortgage loans on real property; furthermore, to act or serve as intermediary by offering his/her services to insurance companies, banks, trusts, pension funds, and other private or government investment entities or individuals that invest their assets, wholly or partially, in mortgage loans or in the granting thereof to finance or refinance the acquisition of real property located in Puerto Rico.
(t) Act.— Act to Regulate the Mortgage Loan Business in Puerto Rico.
(u) License.— A written authorization issued by the Commissioner or his/her representative, whereby a person is authorized to engage in mortgage lending, mortgage brokerage or mortgage loan origination activities in accordance with the provisions of this chapter.
(v) Nationwide mortgage licensing system and registry.— A system developed and maintained by the conference of state bank supervisors and the American association of residential mortgage regulators to uniform State licensing applications, forms, systems, and processes applicable to the mortgage industry.
(w) Mortgage lending business.— Business whereby one or more cash advances, or their equivalent, are made by a lender (commonly known as a mortgage creditor) that is secured by a mortgage deed that duly creates a lien on one or more real property and whereby the conditions and form of repayment or liquidation of the loan are set forth. It further includes mortgage loan servicing as defined in subsection (b) of this section.
(x) Office of the Commissioner of Financial Institutions.— The Office of the Commissioner of Financial Institutions, created under §§ 2001 et seq. of this title, known as the “Financial Institutions Commissioner’s Office Act”.
(y) Office.— Site where the licensee’s main office is located and any other site where mortgage lending, mortgage brokerage, or mortgage loan origination are carried out, provided that such site shall not be a dwelling. Every office shall obtain the applicable use permit issued by the appropriate government agency.
(z) Mortgage loan originator.— An individual who, for compensation or gain or with the expectation of receiving compensation or gain, engages in the loan origination business through the receipt of a mortgage loan application, or who offers or negotiates the terms of a mortgage loan. Such term shall not include individuals engaged solely as loan processors or underwriters, except as provided in § 3055(c) of this title. Furthermore, it shall not include persons or entities that only perform real estate brokerage activities and are licensed or registered in accordance with the applicable law, unless such persons or entities are compensated by any lender, mortgage broker, or mortgage loan originator, or by any agent of such lender, mortgage broker, or mortgage loan originator; or to persons or entities solely involved in granting extensions of credit related to timeshare plans, as such term is defined in Section 101(53D) of Chapter 1 of Title 11, U.S. Code.
(aa) Licensed mortgage loan originator.— An individual who meets the definition of mortgage loan originator and is not an employee of 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, and who is licensed by the Office of the Commissioner of Financial Institutions; and is registered with and maintains a unique identifier through the nationwide mortgage licensing system and registry.
(bb) Registered mortgage loan originator.— An individual who meets the definition of mortgage loan originator and is an employee of 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; and who is registered with and maintains a unique identifier by the nationwide mortgage licensing system and registry through the federal financial institutions examination council.
(cc) Net worth.— The total assets minus total liabilities.
(dd) Person.— Any natural person engaged in mortgage loan origination activities or any natural or juridical person including, but not limited to individuals, partnerships, corporations, trusts, or any other juridical entity engaged in any activity related to mortgage lending or brokerage.
(ee) Mortgage loan.— One or more cash advances or their equivalent, made by a lender (commonly known as a mortgage creditor) that is secured by a mortgage, note, or other consensual security interest on one or more real estate, and whereby the conditions and form of repayment or liquidation of the loan are set forth.
(ff) Residential mortgage loan.— Any mortgage loan primarily for personal, family, or household use that is secured by a mortgage, note, or other consensual security interest on a residential real estate.
(gg) Loan processor or Underwriter.— An individual who performs administrative, clerical, or support duties as an employee at the direction of and subject to the supervision or instruction of a registered mortgage loan originator or a mortgage loan originator licensed by the Office of the Commissioner of Financial Institutions. Administrative, clerical, or support duties may include, after receiving an application, the receipt, collection, distribution, and analysis of the information necessary for processing or underwriting a mortgage loan, and communication with the consumer to obtain the information necessary for processing or underwriting a loan, to the extent that such communication does not include offering or negotiating residential mortgage loans rates or terms, or counseling consumers about residential mortgage loan rates or terms. Such individual shall not lead the public to believe, through advertising or the media (including printed material, brochures, signs, or other promotional items), or otherwise, that he/she can or will perform any of the activities of a mortgage loan originator.
(hh) Nontraditional mortgage product.— Any mortgage product other than a thirty (30)-year fixed rate mortgage with a constant payment of principal and interest.
(ii) Residential real estate.— Any real property located in Puerto Rico on which is constructed or intended to be constructed a dwelling.
History —Dec. 30, 2010, No. 247, § 1.2, eff. 120 days after Dec. 30, 2010.