Virginia Administrative Code › Title 10 - FINANCE AND FINANCIAL INSTITUTIONS › Agency 5 - STATE CORPORATION COMMISSION › Chapter 160 - RULES GOVERNING MORTGAGE LENDERS AND BROKERS › Section 10VAC5-160-10 - Definitions

Current through Register Vol. 40, No. 24, July 15, 2024
The following words and terms when used in this chapter shall
				  have the following meanings unless the context clearly indicates
				  otherwise:
"Advertisement" means a commercial message in any medium that
				  promotes, directly or indirectly, a mortgage loan. The term includes a
				  communication sent to a consumer as part of a solicitation of business, but
				  excludes messages on promotional items such as pens, pencils, notepads, hats,
				  calendars, etc., as well as rate sheets or other information distributed or
				  made available solely to other businesses.
"Affiliate," for purposes of subdivision 3 of §
									6.2-1602 of the Code of Virginia,
				  means an entity of which 25% or more of the voting shares or ownership interest
				  is held, directly or indirectly, by a company that also owns a bank, savings
				  institution, or credit union.
"Bona fide employee," for purposes of Chapter 16 and this
				  chapter, means an individual (i) whose manner and means of performance of work
				  are subject to the right of control of, or are controlled by, a person and (ii)
				  whose compensation for federal income tax purposes is reported, or required to
				  be reported, on a W-2 form issued by the controlling person. However, the term
				  shall not include an individual who is concurrently employed by two or more
				  persons that are engaged in business as a mortgage lender or mortgage
				  broker.
"Bureau," "commission," and "commissioner" shall have the
				  meanings ascribed to them in §
									6.2-100 of the Code of
				  Virginia.
"Chapter 16" means Chapter 16 (§
									6.2-1600 et seq.) of Title 6.2 of
				  the Code of Virginia.
"Chapter 17" means Chapter 17 (§
									6.2-1700 et seq.) of Title 6.2 of
				  the Code of Virginia.
"Commitment" means a written offer to make a mortgage loan
				  signed by a person authorized to sign such offers on behalf of a mortgage
				  lender.
"Commitment agreement" means a commitment accepted by an
				  applicant for a mortgage loan, as evidenced by the applicant's signature
				  thereon.
"Commitment fee" means any fee or charge accepted by a
				  mortgage lender, or by a mortgage broker for transmittal to a mortgage lender,
				  as consideration for binding the mortgage lender to make a mortgage loan in
				  accordance with the terms of a commitment or as a requirement for acceptance by
				  the applicant of a commitment, but the term does not include fees paid to third
				  persons or interest.
"Dwelling" means one-family to four-family residential
				  property located in the Commonwealth.
"Fees paid to third persons" means the bona fide fees or
				  charges paid by the applicant for a mortgage loan to third persons other than
				  the mortgage lender or mortgage broker, or paid by the applicant to, or
				  retained by, the mortgage lender or mortgage broker for transmittal to such
				  third persons in connection with the mortgage loan, including, but not limited
				  to, recording taxes and fees, reconveyance or releasing fees, appraisal fees,
				  credit report fees, attorney fees, fees for title reports and title searches,
				  title insurance premiums, surveys and similar charges.
"Lead generator" means a person who engages in a form of
				  marketing activity in which the person collects and transmits a prospective
				  borrower's contact information and minimal information pertaining to potential
				  mortgage loans. A person shall not be considered a lead generator if the person
				  collects a prospective borrower's social security number or sufficient personal
				  information to enable a mortgage lender or mortgage broker to evaluate, in
				  whole or in part, the prospective borrower's creditworthiness.
"Licensee" means a person licensed under Chapter 16.
"Loan processor or underwriter" means a person who, with
				  respect to the origination of a residential mortgage loan, performs the
				  following duties at the direction of and subject to the supervision and
				  instruction of a licensed or exempt mortgage lender or mortgage broker:
(i) receiving, collecting, distributing, or analyzing
				  information common for the processing or underwriting of a residential mortgage
				  loan or
(ii) communicating with a consumer to obtain the information
				  necessary for the processing or underwriting of a residential mortgage loan. A
				  loan processor or underwriter does not include a person who (i) communicates
				  with a consumer regarding a prospective residential mortgage loan prior to the
				  consumer submitting a residential mortgage loan application, (ii) takes an
				  application for or offers or negotiates the terms of a residential mortgage
				  loan, or
(iii) counsels consumers about residential mortgage loan
				  terms. For purposes of this definition, the phrase "takes an application for or
				  offers or negotiates the terms of a residential mortgage loan" shall be
				  construed in accordance with subdivisions B 1 and B 2 of
				  10VAC5-161-20.
"Lock-in agreement" means a written agreement between a
				  mortgage lender, or a mortgage broker acting on behalf of a mortgage lender,
				  and an applicant for a mortgage loan that establishes and sets an interest rate
				  and the points to be charged in connection with a mortgage loan that is closed
				  within the time period specified in the agreement. A commitment agreement that
				  establishes and sets an interest rate and the points to be charged in
				  connection with a mortgage loan that is closed within the time period specified
				  in the agreement is also a lock-in agreement. The interest rate that is
				  established and set by the agreement may be either a fixed rate or an
				  adjustable rate.
"Lock-in fee" means any fee or charge accepted by a mortgage
				  lender, or by a mortgage broker for transmittal to a mortgage lender, as
				  consideration for making a lock-in agreement, but the term does not include
				  fees paid to third persons or interest.
"Mortgage lender," "mortgage broker," "mortgage loan" and
				  "person" shall have the meanings ascribed to them in §
									6.2-1600 of the Code of Virginia.
				  For purposes of Chapter 16 and this chapter, the term "mortgage broker" does
				  not include the following persons, provided that they are not also engaged in
				  any activities for which a mortgage broker license is required:
(i) a person engaged in the business of a loan processor or
				  underwriter ,
(ii) a lead generator, and
(iii) a noteholder, or servicer acting on behalf of a
				  noteholder, that negotiates the modification of a mortgage loan in its
				  portfolio. The payee named in a mortgage loan note shall be deemed to be the
				  mortgage lender for purposes of Chapter 16 and this chapter.
"Mortgage loan originator," "Nationwide Mortgage Licensing
				  System and Registry," "Registry," and "residential mortgage loan" shall have
				  the meanings ascribed to them in §
									6.2-1700 of the Code of
				  Virginia.
"Personal, family or household purposes," for purposes of
				  §
									6.2-1600 of the Code of Virginia,
				  means that the individual obtaining the loan intends to use the proceeds to
				  build or purchase a dwelling that will be occupied by such individual or
				  another individual as his temporary or permanent residence. The term includes a
				  loan used to build or purchase a dwelling that will be (i) improved or
				  rehabilitated by or on behalf of the purchaser for subsequent sale to one or
				  more other individuals who will reside in the dwelling on a temporary or
				  permanent basis, or (ii) leased by the purchaser to one or more other
				  individuals who will reside in the dwelling on a temporary or permanent
				  basis.
"Points" means any fee or charge retained or received by a
				  mortgage lender or mortgage broker stated or calculated as a percentage or
				  fraction of the principal amount of the loan, other than or in addition to fees
				  paid to third persons or interest.
"Reasonable period of time" means that period of time,
				  determined by a mortgage lender in good faith on the basis of its most recent
				  relevant experience and other facts and circumstances known to it, within which
				  the mortgage loan will be closed.
"Refinancing" for purposes of Chapter 16 and this chapter
				  means an exchange of an old debt for a new debt, as by negotiating a different
				  interest rate or term or by repaying an existing loan with money acquired from
				  a new loan. "Refinancing" includes any loan modification.
"Senior officer," for purposes of §§
									6.2-1605,
				  6.2-1606,
				  6.2-1607, and
				  6.2-1608 of the Code of Virginia,
				  means an individual who has significant management responsibility within an
				  organization or otherwise has the authority to influence or control the conduct
				  of the organization's affairs, including but not limited to its compliance with
				  applicable laws and regulations.
"Stockholder," for purposes of §
									6.2-1616 of the Code of Virginia,
				  includes a member of a limited liability company.
"Subsidiary," for purposes of subdivision 3 of §
									6.2-1602 of the Code of Virginia,
				  means an entity of which 25% or more of the voting shares or ownership interest
				  is held, directly or indirectly, by a bank, savings institution, or credit
				  union.
Statutory Authority: §§
											6.2-1613 and
					 12.1-13 of the Code of Virginia
					 (10VAC5-160-10 through
					 10VAC5-160-90
					 ).