The Florida Senate

¹494.001  Definitions.--As used in ss. 494.001-494.0077, the term:

(1)  "Act as a correspondent mortgage lender" means to make a mortgage loan.

(2)  "Act as a loan originator" means being employed by a mortgage lender or correspondent mortgage lender, for compensation or gain or in the expectation of compensation or gain, to negotiate, offer to negotiate, or assist any licensed or exempt entity in negotiating the making of a mortgage loan, including, but not limited to, working with a licensed or exempt entity to structure a loan or discussing terms and conditions necessary for the delivery of a loan product. A natural person whose activities are ministerial and clerical, which may include quoting available interest rates, is not acting as a loan originator.

(3)  "Act as a mortgage broker" means, for compensation or gain, or in the expectation of compensation or gain, directly or indirectly, accepting or offering to accept an application for a mortgage loan, soliciting or offering to solicit a mortgage loan on behalf of a borrower, negotiating or offering to negotiate the terms or conditions of a new or existing mortgage loan on behalf of a borrower or lender, or negotiating or offering to negotiate the sale of an existing mortgage loan to a noninstitutional investor. An employee whose activities are ministerial and clerical, which may include quoting available interest rates or loan terms and conditions, is not acting as a mortgage broker.

(4)  "Act as a mortgage lender" means to make a mortgage loan or to service a mortgage loan for others or, for compensation or gain, or in the expectation of compensation or gain, either directly or indirectly, to sell or offer to sell a mortgage loan to a noninstitutional investor.

(5)  "Associate" means a person required to be licensed as a mortgage broker under this chapter who is employed by or acting as an independent contractor for a mortgage brokerage business or a person acting as an independent contractor for a mortgage lender or correspondent mortgage lender. The use of the term associate, in contexts other than in the administration of ss. 494.003-494.0077, shall not be construed to impose or effect the common-law or statutory liability of the employer.

(6)  "Branch broker" means the licensee in charge of, and responsible for, the operation of a branch office of a mortgage brokerage business.

(7)  "Branch office" means a location, other than a licensee's principal place of business:

(a)  The address of which appears on business cards, stationery, or advertising used by the licensee in connection with business conducted under this chapter;

(b)  At which the licensee's name, advertising or promotional materials, or signage suggest that mortgage loans are originated, negotiated, funded, or serviced; or

(c)  Which, due to the actions of any employee or associate of the licensee, may be construed by the public as a branch office of the licensee where mortgage loans are originated, negotiated, funded, or serviced.

(8)  "Commission" means the Financial Services Commission.

(9)  "Control person" means an individual, partnership, corporation, trust, or other organization that possesses the power, directly or indirectly, to direct the management or policies of a company, whether through ownership of securities, by contract, or otherwise. A person is presumed to control a company if, with respect to a particular company, that person:

(a)  Is a director, general partner, or officer exercising executive responsibility or having similar status or functions;

(b)  Directly or indirectly may vote 10 percent or more of a class of voting securities or sell or direct the sale of 10 percent or more of a class of voting securities; or

(c)  In the case of a partnership, may receive upon dissolution or has contributed 10 percent or more of the capital.

(10)  "Office" means the Office of Financial Regulation of the commission.

(11)  "Employed" means engaged in the service of another for salary or wages subject to withholding, FICA, or other lawful deductions by the employer as a condition of employment.

(12)  "Employee" means a natural person who is employed and who is subject to the right of the employer to direct and control the actions of the employee.

(13)  "Good standing" means that the registrant or licensee, or a subsidiary or affiliate thereof, is not, at the time of application, being penalized for one or more of the following disciplinary actions by a licensing authority of any state, territory, or country:

(a)  Revocation of a license or registration.

(b)  Suspension of a license or registration.

(c)  Probation of a license or registration for an offense involving fraud, dishonest dealing, or an act of moral turpitude.

(14)  "Institutional investor" means a state or national bank, state or federal savings and loan association or savings bank, real estate investment trust, insurance company, real estate company, accredited investor as defined in 17 C.F.R. ss. 230.501 et seq., business licensed under ss. 494.001-494.0077, or other business entity that invests in mortgage loans, including a secondary mortgage market institution including, without limitation, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, and the Government National Mortgage Association, conduits, investment bankers, and any subsidiary of such entities.

(15)  "Loan commitment" or "commitment" means a statement by the lender setting forth the terms and conditions upon which the lender is willing to make a particular mortgage loan to a particular borrower.

(16)  "Lock-in agreement" means an agreement whereby the lender guarantees for a specified number of days or until a specified date the availability of a specified rate of interest or specified formula by which the rate of interest will be determined and/or specific number of discount points, if the loan is approved and closed within the stated period of time.

(17)  "Make a mortgage loan" means to close a mortgage loan in a person's name or to advance funds, offer to advance funds, or make a commitment to advance funds to an applicant for a mortgage loan.

(18)  "Mortgage brokerage fee" means a fee received for acting as a mortgage broker.

(19)  "Mortgage brokerage business" means a person acting as a mortgage broker.

(20)  "Mortgage loan" means any:

(a)  Residential mortgage loan;

(b)  Loan on commercial real property if the borrower is a natural person or the lender is a noninstitutional investor; or

(c)  Loan on improved real property consisting of five or more dwelling units if the borrower is a natural person or the lender is a noninstitutional investor.

(21)  "Net worth" means total assets minus total liabilities pursuant to generally accepted accounting principles.

(22)  "Noninstitutional investor" means an investor other than an institutional investor.

(23)  "Nonresidential mortgage loan" means a mortgage loan other than a residential mortgage loan.

(24)  "Person" means an individual, partnership, corporation, association, or other group, however organized.

(25)  "Principal broker" means a licensee in charge of, and responsible for, the operation of the principal place of business and all branch brokers.

(26)  "Principal place of business" means a licensee's primary business office the street address or physical location of which is designated on the application for licensure or any amendment to such application.

(27)  "Residential mortgage loan" means any mortgage or other security instrument secured by improved real property consisting of no more than four dwelling units.

(28)  "Service a mortgage loan" means to receive or cause to be received or transferred for another installment payments of principal, interest, or other payments pursuant to a mortgage loan.

(29)  "Substantial fault of the borrower" means that the borrower:

(a)  Failed to provide information or documentation required by the lender or broker in a timely manner;

(b)  Provided information, in the application or subsequently, which upon verification proved to be significantly inaccurate, causing the need for review or further investigation by the lender or broker;

(c)  Failed to produce no later than the date specified by the lender all documentation specified in the commitment or closing instructions as being required for closing; or

(d)  Failed to be ready, willing, or able to close the loan no later than the date specified by the lender or broker.

For purposes of this definition, a borrower is considered to have provided information or documentation in a timely manner if such information and documentation was received by the lender within 7 days after the borrower received a request for same, and information is considered significantly inaccurate if the correct information materially affects the eligibility of the borrower for the loan for which application is made.

(30)  "Ultimate equitable owner" means a natural person who, directly or indirectly, owns or controls an ownership interest in a corporation, a foreign corporation, an alien business organization, or any other form of business organization, regardless of whether such natural person owns or controls such ownership interest through one or more natural persons or one or more proxies, powers of attorney, nominees, corporations, associations, partnerships, trusts, joint stock companies, or other entities or devices, or any combination thereof.

(31)  "Principal representative" means an individual who operates the business operations of a licensee under part III.

(32)  "Mortgage loan application" means a submission of a borrower's financial information in anticipation of a credit decision, whether written or computer-generated, relating to a mortgage loan. If the submission does not state or identify a specific property, the submission is an application for a prequalification and not an application for a mortgage loan under this part. The subsequent addition of an identified property to the submission converts the submission to an application for a mortgage loan.

(33)  "Mortgage brokerage fee" means the total compensation to be received by a mortgage brokerage business for acting as a mortgage broker.

(34)  "Business day" means any calendar day except Sunday or a legal holiday.

History.--ss. 1, 50, ch. 91-245; s. 4, ch. 91-429; s. 1, ch. 95-313; s. 1, ch. 99-213; s. 1, ch. 2001-228; s. 513, ch. 2003-261; s. 1, ch. 2006-213; s. 1, ch. 2007-182; ss. 1, 2, ch. 2009-241.

¹Note.--Section 2, ch. 2009-241, amended s. 494.001, effective October 1, 2010, to read:

494.001  Definitions.--As used in ss. 494.001-494.0077, the term:

(1)  "Borrower" means a person obligated to repay a mortgage loan and includes, but is not limited to, a coborrower, cosignor, or guarantor.

(2)  "Branch manager" means the licensed loan originator in charge of, and responsible for, the operation of the branch office of a mortgage broker or mortgage lender.

(3)  "Branch office" means a location, other than a mortgage broker's or mortgage lender's principal place of business:

(a)  The address of which appears on business cards, stationery, or advertising used by the licensee in connection with business conducted under this chapter;

(b)  At which the licensee's name, advertising or promotional materials, or signage suggests that mortgage loans are originated, negotiated, funded, or serviced; or

(c)  At which mortgage loans are originated, negotiated, funded, or serviced by a licensee.

(4)  "Commission" means the Financial Services Commission.

(5)  "Control person" means an individual, partnership, corporation, trust, or other organization that possesses the power, directly or indirectly, to direct the management or policies of a company, whether through ownership of securities, by contract, or otherwise. The term includes, but is not limited to:

(a)  A company's executive officers, including the president, chief executive officer, chief financial officer, chief operations officer, chief legal officer, chief compliance officer, director, and other individuals having similar status or functions.

(b)  For a corporation, each shareholder that, directly or indirectly, owns 10 percent or more or that has the power to vote 10 percent or more, of a class of voting securities unless the applicant is a publicly traded company.

(c)  For a partnership, all general partners and limited or special partners that have contributed 10 percent or more or that have the right to receive, upon dissolution, 10 percent or more of the partnership's capital.

(d)  For a trust, each trustee.

(e)  For a limited liability company, all elected managers and those members that have contributed 10 percent or more or that have the right to receive, upon dissolution, 10 percent or more of the partnership's capital.

(f)  Principal loan originators.

(6)  "Credit report" means any written, oral, or other information obtained from a consumer reporting agency as described in the federal Fair Credit Reporting Act, which bears on an individual's credit worthiness, credit standing, or credit capacity. A credit score alone, as calculated by the reporting agency, is not considered a credit report.

(7)  "Credit score" means a score, grade, or value that is derived by using data from a credit report in any type of model, method, or program, whether electronically, in an algorithm, in a computer software or program, or by any other process for the purpose of grading or ranking credit report data.

(8)  "Depository institution" has the same meaning as in s. (3)(c) of the Federal Deposit Insurance Act, and includes any credit union.

(9)  "Financial audit report" means a report prepared in connection with a financial audit that is conducted in accordance with generally accepted auditing standards prescribed by the American Institute of Certified Public Accountants by a certified public accountant licensed to do business in the United States, and which must include:

(a)  Financial statements, including notes related to the financial statements and required supplementary information, prepared in conformity with United States generally accepted accounting principles.

(b)  An expression of opinion regarding whether the financial statements are presented in conformity with United States generally accepted accounting principles, or an assertion to the effect that such an opinion cannot be expressed and the reasons.

(10)  "Institutional investor" means a depository institution, real estate investment trust, insurance company, real estate company, accredited investor as defined in 17 C.F.R. ss. 230.501 et seq., mortgage broker or mortgage lender licensed under this chapter, or other business entity that invests in mortgage loans, including a secondary mortgage market institution including, without limitation, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, and the Government National Mortgage Association, conduits, investment bankers, and any subsidiary of such entities.

(11)  "Loan commitment" or "commitment" means a statement by the lender setting forth the terms and conditions upon which the lender is willing to make a particular mortgage loan to a particular borrower.

(12)  "Loan modification" means a modification to an existing loan. The term does not include a refinancing transaction.

(13)  "Loan origination fee" means the total compensation from any source received by a mortgage broker acting as a loan originator. Any payment for processing mortgage loan applications must be included in the fee and must be paid to the mortgage broker.

(14)  "Loan originator" means an individual who, directly or indirectly, solicits or offers to solicit a mortgage loan, accepts or offers to accept an application for a mortgage loan, negotiates or offers to negotiate the terms or conditions of a new or existing mortgage loan on behalf of a borrower or lender, processes a mortgage loan application, or negotiates or offers to negotiate the sale of an existing mortgage loan to a noninstitutional investor for compensation or gain. The term includes the activities of a loan originator as that term is defined in the S.A.F.E. Mortgage Licensing Act of 2008, and an individual acting as a loan originator pursuant to that definition is acting as a loan originator for purposes of this definition. The term does not include an employee of a mortgage broker or mortgage lender who performs only administrative or clerical tasks, including quoting available interest rates, physically handling a completed application form, or transmitting a completed form to a lender on behalf of a prospective borrower.

(15)  "Lock-in agreement" means an agreement whereby the lender guarantees for a specified number of days or until a specified date the availability of a specified rate of interest or specified formula by which the rate of interest will be determined or specific number of discount points will be given, if the loan is approved and closed within the stated period of time.

(16)  "Making a mortgage loan" means closing a mortgage loan in a person's name, advancing funds, offering to advance funds, or making a commitment to advance funds to an applicant for a mortgage loan.

(17)  "Material change" means a change that would be important to a reasonable borrower in making a borrowing decision, and includes a change in the interest rate previously offered a borrower, a change in the type of loan offered to a borrower, or a change in fees to be charged to a borrower resulting in total fees greater than $100.

(18)  "Mortgage broker" means a person conducting loan originator activities through one or more licensed loan originators employed by the mortgage broker or as independent contractors to the mortgage broker.

(19)  "Mortgage lender" means a person making a mortgage loan or servicing a mortgage loan for others, or, for compensation or gain, directly or indirectly, selling or offering to sell a mortgage loan to a noninstitutional investor.

(20)  "Mortgage loan" means any:

(a)  Residential loan primarily for personal, family, or household use which is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling, as defined in s. 103(v) of the federal Truth in Lending Act, or for the purchase of residential real estate upon which a dwelling is to be constructed;

(b)  Loan on commercial real property if the borrower is an individual or the lender is a noninstitutional investor; or

(c)  Loan on improved real property consisting of five or more dwelling units if the borrower is an individual or the lender is a noninstitutional investor.

(21)  "Mortgage loan application" means the submission of a borrower's financial information in anticipation of a credit decision, which includes the borrower's name, the borrower's monthly income, the borrower's social security number to obtain a credit report, the property address, an estimate of the value of the property, the mortgage loan amount sought, and any other information deemed necessary by the loan originator. An application may be in writing or electronically submitted, including a written record of an oral application.

(22)  "Net worth" means total assets minus total liabilities pursuant to United States generally accepted accounting principles.

(23)  "Noninstitutional investor" means an investor other than an institutional investor.

(24)  "Office" means the Office of Financial Regulation.

(25)  "Person" has the same meaning as in s. 1.01

(26)  "Principal loan originator" means the licensed loan originator in charge of, and responsible for, the operation of a mortgage lender or mortgage broker, including all of the activities of the mortgage lender's or mortgage broker's loan originators and branch managers, whether employees or independent contractors.

(27)  "Principal place of business" means a mortgage broker's or mortgage lender's primary business office, the street address, or physical location that is designated on the application for licensure or any amendment to such application.

(28)  "Registered loan originator" means a loan originator who is employed by a depository institution, by a subsidiary that is owned and controlled by a depository institution and regulated by a federal banking agency, or by an institution regulated by the Farm Credit Administration, and who is registered with and maintains a unique identifier through the registry.

(29)  "Registry" means the Nationwide Mortgage Licensing System and Registry, which is the mortgage licensing system developed and maintained by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators for the licensing and registration of loan originators.

(30)  "Relative" means any of the following, whether by the full or half blood or by adoption:

(a)  A person's spouse, father, mother, children, brothers, and sisters.

(b)  The father, mother, brothers, and sisters of the person's spouse.

(c)  The spouses of the person's children, brothers, or sisters.

(31)  "Servicing endorsement" means authorizing a mortgage lender to service a loan for more than 4 months.

(32)  "Servicing a mortgage loan" means to receive, cause to be received, or transferred for another, installment payments of principal, interest, or other payments pursuant to a mortgage loan.

(33)  "Substantial fault of the borrower" means that the borrower:

(a)  Failed to provide information or documentation required by the lender or broker in a timely manner;

(b)  Provided information, in the application or subsequently, which upon verification proved to be significantly inaccurate, causing the need for review or further investigation by the lender or broker;

(c)  Failed to produce by the date specified by the lender all documentation specified in the commitment or closing instructions as being required for closing; or

(d)  Failed to be ready, willing, or able to close the loan by the date specified by the lender or broker.


For purposes of this definition, a borrower is considered to have provided information or documentation in a timely manner if such information and documentation was received by the lender within 7 days after the borrower received a request for same, and information is considered significantly inaccurate if the correct information materially affects the eligibility of the borrower for the loan for which application is made.

(34)  "Ultimate equitable owner" means an individual who, directly or indirectly, owns or controls an ownership interest in a corporation, a foreign corporation, an alien business organization, or any other form of business organization, regardless of whether the individual owns or controls such interest through one or more individuals or one or more proxies, powers of attorney, nominees, corporations, associations, partnerships, trusts, joint stock companies, or other entities or devices, or any combination thereof.