SB 785

            
2020 SESSION

20104068D

SENATE BILL NO. 785


Offered January 8, 2020


Prefiled January 8, 2020

A BILL to amend and reenact � 6.2-1701 of the Code of 
 Virginia, relating to mortgage loan originators; exemption for retailers of 
 manufactured or modular homes.
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Patron-- Lewis

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Referred to Committee on Commerce and Labor

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Be it enacted by the General Assembly of Virginia:
 
 
1. That � 6.2-1701 of the Code of Virginia is amended and 
 reenacted as follows:
 
 
� 6.2-1701. License requirement.
 
 
A. Except as otherwise provided in � 6.2-1701.3, no individual 
 shall engage in the business of a mortgage loan originator unless such 
 individual has first obtained and maintains annually a license under this 
 chapter.
 
 
B. The following shall be exempt from licensing and other 
 provisions of this chapter:
 
 
1. Any individual engaged solely as a loan processor or 
 underwriter. Except as otherwise provided in this subsection, an individual 
 acting as an independent contractor may not engage in residential mortgage loan 
 origination activities as a loan processor or underwriter unless such 
 individual has first obtained and maintains annually a mortgage loan originator 
 license;
 
 
2. Any individual who only performs administrative or clerical 
 tasks on behalf of a mortgage loan originator;
 
 
3. Any individual who only performs real estate brokerage 
 activities and is licensed or registered in accordance with applicable law, 
 unless the individual is compensated directly or indirectly by the lender, a 
 mortgage broker, or other mortgage loan originator or by any agent of such 
 lender, mortgage broker, or other mortgage loan originator;
 
 
4. Any individual solely involved in extensions of credit 
 relating to timeshare plans, as that term is defined in 11 U.S.C. � 101 (53D);
 
 
5. A registered mortgage loan originator;
 
 
6. Any individual who offers or negotiates terms of a 
 residential mortgage loan with or on behalf of an immediate family member of 
 the individual;
 
 
7. Any individual who acts as a loan originator in providing 
 financing for the sale of that individuals own residence;
 
 
8. A licensed attorney, provided that the attorneys mortgage 
 loan origination activities are: (i) considered by the Supreme Court of 
 Virginia to be part of the authorized practice of law within the Commonwealth, 
 (ii) carried out within an attorney-client relationship, and (iii) accomplished 
 by the attorney in compliance with all applicable laws, rules, ethics, and 
 standards;
 
 
9. Any employee of federal, state, or local government, or a 
 housing finance agency, who acts as a mortgage loan originator only pursuant to 
 his official duties of employment. For the purposes of this subdivision, 
 "local government" means any county, city, or town or other local or 
 regional political subdivision; and
 
 
10. Any employee of a bona fide nonprofit organization, as 
 determined by the Commission in accordance with � 6.2-1701.1, who acts as a 
 mortgage loan originator only (i) pursuant to his official duties of employment 
 and (ii) with respect to residential mortgage loans with terms that are 
 favorable to a borrower; and
 
 
11. Any 
 retailer of manufactured or modular homes or an employee of the retailer if the 
 retailer or employee, as applicable:
 
 
a. Does not receive 
 compensation or gain for engaging in activities described in the definition of 
 mortgage loan originator in � 6.2-1700 that is in excess of any compensation or 
 gain received in a comparable cash transaction;
 
 
b. Discloses to the consumer:
 
 
(1) In writing 
 any corporate affiliation with any creditor; and
 
 
(2) If the 
 retailer has a corporate affiliation with any creditor, at least one 
 unaffiliated creditor; and
 
 
c. Does not 
 directly negotiate with the consumer or lender on loan terms, including 
 rates, fees, and other costs.