By the Division of Banks

January 10, 2008

To All Non Profit Agencies:

This letter is intended to inform you of the passage of Chapter 206 of the Acts of 2007, An Act Protecting and Preserving Home Ownership, which was signed into law on November 29, 2007.

SECTION 12 of Chapter 206 amends General Laws chapter 255E, section 2 in order to delete the mortgage lender and mortgage broker licensing exemption for any nonprofit agency or corporation incorporated under the laws of the Commonwealth for the purpose of assisting low to moderate income households in the purchase or rehabilitation of family residences of four or less units and which holds tax exempt status under the provisions of Section 501(c)(3) or Section 501 (c)(4) of the Internal Revenue Code. Chapter 206 contains an emergency preamble which made the Act effective immediately upon signing. Any nonprofit entity which was previously exempt from licensing under chapter 255E is now required to be licensed as a mortgage lender or a mortgage broker.

Chapter 255E, section 2 requires that any person or entity which acts as a mortgage lender or a mortgage broker with respect to residential property in the Commonwealth five or more times in a consecutive twelve month period to obtain a license from the Division of Banks. A "mortgage lender" is defined as a person engaged in the business of making mortgage loans or issuing commitments for mortgage loans. A "mortgage broker" is defined as any person who for compensation or gain, or in the expectation of compensation or gain, directly or indirectly negotiates, places, assists in placement, finds or offers to negotiate, place, assist in placement or find mortgages on residential property for others.

The online applications for a mortgage lender's license and a mortgage broker's license may be accessed on the Division's website at www.mass.gov/dob. In an effort to facilitate the processing of any application you may file, please identify your organization as a previously exempt nonprofit on the Legal Status Field on the online Form MU1 application where you are asked to describe your organization. Please use the box for "Other" to identify your organization as a nonprofit entity under Section 501(c)(3) or 501 (c)(4) of the Internal Revenue Code.

Additionally, please be advised that SECTION 15 of Chapter 206 established a new chapter, Chapter 255F, in the General Laws which requires the licensing of mortgage loan originators in the Commonwealth. A "mortgage loan originator" is defined as a natural person who (a) is employed by or associated with 1 and not more than 1 entity, and (b) negotiates, solicits, arranges, provides or accepts residential mortgage loan applications, or assists consumers in completing such applications, except that employees whose responsibilities are limited to clerical and administrative tasks and who do not solicit borrowers, accept applications or negotiate terms of residential mortgage loans on behalf of the employer shall not be considered mortgage loan originators and do not require licenses. This provision could impact employees of your organization.

If you have any questions, kindly contact Tiffany Fowlie, Chief Director, Licensing of Mortgage Companies at (617) 956-1549.

Very truly yours,

Steven L. Antonakes
Commissioner of Banks