12 CFR §1008.103 — Individuals required to be licensed by states (SAFE Act state-licensing side)
Federal minimum standard for state MLO licensing under the SAFE Act (Regulation H), including the definition of "engaging in the business of a loan originator," "takes a residential mortgage loan application," and "offers or negotiates terms," plus the independent-contractor processor/underwriter rule.
Verbatim regulatory text
Verbatim provisions from 12 CFR §1008.103 — Individuals required to be licensed by states (SAFE Act state-licensing side) — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
12 CFR §1008.103(a) — State licensing prohibition (NMLSR registration + state license)
(a) Except as provided in paragraph (e) of this section, in order to operate a S.A.F.E.-compliant program, a state must prohibit an individual from engaging in the business of a loan originator with respect to any dwelling or residential real estate in the state , unless the individual first:
12 CFR §1008.103(b) — Definition of "engages in the business of a loan originator"
(b) An individual engages in the business of a loan originator if the individual , in a commercial context and habitually or repeatedly:
12 CFR §1008.103(c)(1) — Definition of "takes a residential mortgage loan application"
(1) An individual “takes a residential mortgage loan application” if the individual receives a residential mortgage loan application for the purpose of facilitating a decision whether to extend an offer of residential mortgage loan terms to a borrower or prospective borrower (or to accept the terms offered by a borrower or prospective borrower in response to a solicitation), whether the application is received directly or indirectly from the borrower or prospective borrower.
12 CFR §1008.103(c)(2) — Definition of "offers or negotiates terms" for compensation or gain
(2) An individual “offers or negotiates terms of a residential mortgage loan for compensation or gain” if the individual:
12 CFR §1008.103(d)(1) — Independent-contractor loan processors and underwriters must be licensed
(1) Except as provided in paragraph (e) of this section, a state must prohibit an individual who is an independent contractor from engaging in residential mortgage loan origination activities as a loan processor or underwriter with respect to any dwelling or residential real estate in the state , unless the individual first:
12 CFR §1008.103(a) — State licensing prohibition (NMLSR registration + state license) — enumerated items (chapeau recall fix)
(1) Registers as a loan originator through and obtains a unique identifier from the NMLSR, and (2) Obtains and maintains a valid loan originator license from the state .
12 CFR §1008.103(b) — Definition of "engages in the business of a loan originator" — enumerated items (chapeau recall fix)
(1) (i) Takes a residential mortgage loan application ; and (ii) Offers or negotiates terms of a residential mortgage loan for compensation or gain ; or (2) Represents to the public, through advertising or other means of communicating or providing information (including the use of business cards, stationery, brochures, signs, rate lists, or other promotional items), that such individual can or will perform the activities described in paragraph (b)(1) of this section.
12 CFR §1008.103(c)(2) — Definition of "offers or negotiates terms" for compensation or gain — enumerated items (chapeau recall fix)
(i) (A) Presents for consideration by a borrower or prospective borrower particular residential mortgage loan terms; (B) Communicates directly or indirectly with a borrower, or prospective borrower for the purpose of reaching a mutual understanding about prospective residential mortgage loan terms; or (C) Recommends, refers, or steers a borrower or prospective borrower to a particular lender or set of residential mortgage loan terms, in accordance with a duty to or incentive from any person other than the borrower or prospective borrower; and (ii) Receives or expects to receive payment of money or anything of value in connection with the activities described in paragraph (c)(2)(i) of this section or as a result of any residential mortgage loan terms entered into as a result of such activities. (d) (1) Except as provided in paragraph (e) of this section, a state must prohibit an individual who is an independent contractor from engaging in residential mortgage loan origination activities as a loan processor or underwriter with respect to any dwelling or residential real estate in the state , unless the individual first: (i) Registers as a loan originator through and obtains a unique identifier from the NMLSR, and (ii) Obtains and maintains a valid loan originator license from the state .
12 CFR §1008.103(d)(1) — Independent-contractor loan processors and underwriters must be licensed — enumerated items (chapeau recall fix)
(i) Registers as a loan originator through and obtains a unique identifier from the NMLSR, and (ii) Obtains and maintains a valid loan originator license from the state .