Arizona Republic: “New state licenses required for anyone handling a mortgage application could help prevent a repeat of the bad loans that contributed to Phoenix’s housing crash. . . . the law quietly went into affect on July 1. . . . Now, in Arizona, any person who handles a loan application or takes a borrower’s financial information will be fingerprinted and subject to a background check.”
The new law requires that all Arizona loan originators (people that make mortgage loans involving Arizona residential real estate) be licensed with the Arizona Department of Financial Institutions. The terms Arizona “loan originator,” mortgage loan” and “residential real estate” are defined in Arizona Revised Statues Section 6-991, which states:
12. “Loan originator“:
(a) Means a natural person who for compensation or gain or in the expectation of compensation or gain does any of the following:
(i) Takes a residential mortgage loan application.
(ii) Offers or negotiates terms of a residential mortgage loan.
(iii) On behalf of a borrower, negotiates with a lender or noteholder to obtain a temporary or permanent modification in an existing residential mortgage loan agreement.
(b) Does not include:
(i) An individual engaged solely as a loan processor or underwriter except as provided in section 6-991.02.
(ii) A person who only performs real estate brokerage activities and who is licensed in accordance with title 32, chapter 20, unless the person is compensated by a lender, a mortgage broker or any other loan originator or by an agent of the lender, mortgage broker or other loan originator.
(iii) A person solely involved in extensions of credit relating to a timeshare plan as defined in 11 United States Code section 101(53D).
(iv) A person who makes five or fewer mortgage loans per calendar year.
(v) A person who takes back a purchase money mortgage in connection with the sale of residential real estate.
(vi) An employer making a mortgage loan to an employee.
16. “Mortgage loan” or “residential mortgage loan” means a loan for personal family or household use that is secured by a mortgage, deed of trust or other equivalent consensual security interest on a dwelling, as defined in the truth in lending act (15 United States Code section 1602(v)), or residential real estate on which a dwelling is constructed or intended to be constructed.
20. “Residential real estate” means any property that is located in this state and on which a dwelling is constructed or intended to be constructed.
Arizona’s newly effective loan originator licensing statutes are found here:
| 6-991 | Definitions |
| 6-991.01 | Exemptions |
| 6-991.02 | Prohibited acts |
| 6-991.03 | Licensing; renewal; qualifications; application; fees |
| 6-991.04 | Issuance of license; notice from employing mortgage broker, mortgage banker or consumer lender; renewal; inactive status; address change; fee |
| 6-991.05 | Denial, suspension or revocation of licenses |
| 6-991.06 | Loan originator examination committee; membership |
| 6-991.07 | Examination; fee; definition |
| 6-991.08 | Reasonable efforts to secure advantageous loan for borrower |
| 6-991.09 | Mortgage recovery fund; liability limits |
| 6-991.10 | Payments to the mortgage recovery fund |
| 6-991.11 | Statute of limitations; service of summons; application for payment; insufficient monies; definition |
| 6-991.12 | Notice of claim to judgment debtor; response |
| 6-991.13 | Correction of deficiencies in the application |
| 6-991.14 | Investigation and discovery |
| 6-991.15 | Final decision and order on claim; notice |
| 6-991.16 | Claimant’s right to appeal denial of claim; service of notice of appeal; response; failure to file response |
| 6-991.17 | Superintendent’s standing in court |
| 6-991.18 | Subrogation of rights; collection |
| 6-991.19 | Waiver of rights |
| 6-991.20 | Effect of article on disciplinary action |
| 6-991.21 | Financial services fund; use of fund |
| 6-991.22 | Noncompliance not to affect validity of loan |
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