By the Division of Banks

Permissibility Of Licensed Mortgage Lender Using Employee Management Or Leasing Company To Manage Personnel Details

Section 2 of Mass. Gen. Laws chapter 255E requires that any person or entity must be licensed to act as a mortgage broker or lender with respect to residential property in the Commonwealth. Persons who are "employed by or associated with a licensed mortgage broker or mortgage lender in the capacity of a mortgage broker or mortgage lender under the direction of said licensed mortgage broker or mortgage lender" are not required to obtain a separate license. An employee leasing or management company is an entity which would provide basic office services, such as signing office leases and arranging telephone service, and which would provide employee benefits, payroll services and human resources services, in return for a fee from the licensee. The licensee would retain complete control over the hiring and firing of personnel. The Division of Banks would have no objection to a licensee contracting with such a third-party entity for these types of services. However, the Division's main concern, which would be determined on a case by case basis, is the license status of the individuals working in an office, the relationship of those individuals with the licensee, and the contacts such individuals would have with prospective borrowers, in a mortgage lender or broker capacity.