6112 - Exceptions to license requirements.
§ 6112. Exceptions to license requirements. The following persons shall not be required to be licensed under this chapter in order to conduct the mortgage loan business: (1) A banking institution or a federally chartered or State-chartered credit union, if the primary regulator of the banking institution or federally chartered or State-chartered credit union supervises the banking institution or federally chartered or State-chartered credit union. (2) An attorney at law not otherwise engaged in or holding himself or herself out to the public as being engaged in the mortgage loan business who acts as a mortgage broker or a mortgage originator in negotiating or placing a mortgage loan in the normal course of legal practice. The exception under this paragraph shall not apply if the attorney is compensated by any of the following: (i) A mortgage broker. (ii) A mortgage lender. (iii) A mortgage loan correspondent. (iv) A person excepted from licensure under this section. (v) A mortgage originator. (vi) An agent of a person listed in subparagraphs (i), (ii), (iii), (iv) and (v). (3) A person who offers or negotiates terms of a mortgage loan with or on behalf of or makes a mortgage loan to a member of the person's immediate family. (4) Any agency or instrumentality of the Federal Government or a corporation otherwise created by an act of the United States Congress, including the Federal National Mortgage Association, the Government National Mortgage Association, the Veterans' Administration, the Federal Home Loan Mortgage Corporation and the Federal Housing Administration. To qualify for the exception under this paragraph, the agency or instrumentality must: (i) in the same manner as a mortgage lender, obtain and maintain bond coverage for mortgage originators consistent with section 6131(c)(5) (relating to application for license) and file an annual report consistent with section 6135(a)(3) (relating to licensee requirements); or (ii) annually, in a form acceptable to the department, demonstrate to the department that all of the mortgage originators employed by the agency or instrumentality have obtained and maintained the bond coverage required by section 6131(f)(4). (5) Any agency or instrumentality of a state or local government, the District of Columbia or any territory of the United States, including the Pennsylvania Housing Finance Agency and other government housing finance agencies. To qualify for the exception under this paragraph, the agency or instrumentality must: (i) in the same manner as a mortgage lender, obtain and maintain bond coverage for mortgage originators consistent with section 6131(c)(5) and file an annual report consistent with section 6135(a)(3); or (ii) annually, in a form acceptable to the department, demonstrate to the department that all of the mortgage originators employed by the agency or instrumentality have obtained and maintained the bond coverage required by section 6131(f)(4). (6) Consumer discount companies, except that a consumer discount company that acts as a mortgage broker, mortgage lender or mortgage loan correspondent other than under the provisions of the act of April 8, 1937 (P.L.262, No.66), known as the Consumer Discount Company Act, shall be subject to the provisions of Subchapter C (relating to mortgage loan business restrictions and requirements) and sections 6131(c)(2), (3) and (5), 6135, 6138 (relating to authority of department) and 6140(b) (relating to penalties). Employees of licensees under the Consumer Discount Company Act that act as mortgage originators shall be subject to the licensing requirements of this chapter. Consumer discount companies that employ mortgage originators shall be subject to the same requirements as mortgage lenders in regard to the employment and supervision of mortgage originators. (7) Affiliates of banking institutions and subsidiaries and affiliates of federally chartered or State-chartered credit unions. The exception under this paragraph does not apply to consumer discount companies. Notwithstanding the exception under this paragraph, subsidiaries and affiliates of federally chartered or State-chartered credit unions and affiliates of banking institutions shall: (i) be subject to the provisions of Subchapter C and sections 6135(a)(2), (3) and (4), (b) and (c), 6138 and 6140(b); (ii) deliver as required to the department annually copies of financial reports made to all supervisory agencies; (iii) be registered with the department; and (iv) with the exception of subsidiaries of federally chartered or State-chartered credit unions, in the same manner as a mortgage lender, obtain and maintain bond coverage for mortgage originators consistent with section 6131(c)(5). (8) Employees of a mortgage broker, mortgage lender or mortgage loan correspondent, or a person excepted from licensure under this section, who: (i) engage solely in loan processor or underwriter activities, and do not represent 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 they can or will perform any of the activities of a mortgage originator; or (ii) are not otherwise required to be licensed as mortgage originators. (9) Registered mortgage loan originators when acting on behalf of their employers. (10) (Deleted by amendment). (11) Nonprofit corporations not otherwise engaged in or holding themselves out to the public as being engaged in the mortgage loan business making mortgage loans to promote home ownership or improvements for the disadvantaged. To qualify for the exception under this paragraph, the nonprofit corporation must: (i) in the same manner as a mortgage lender, obtain and maintain bond coverage for mortgage originators consistent with section 6131(c)(5) and file an annual report consistent with section 6135(a)(3); or (ii) annually, in a form acceptable to the department, demonstrate to the department that all of the mortgage originators employed by the nonprofit corporation have obtained and maintained the bond coverage required by section 6131(f)(4). (12) A nonprofit corporation not otherwise engaged in or holding itself out to the public as being engaged in the mortgage loan business which meets all of the following subparagraphs: (i) Does not make more than 12 mortgage loans in a calendar year with its own funds, not including funds borrowed through warehouse lines of credit or other sources for the purpose of making mortgage loans. (ii) Makes mortgage loans which are retained in the corporation's own portfolios and not regularly sold to others and are made to promote and advance the cultural traditions and lifestyles of bona fide religious organizations. (iii) Does either of the following: (A) In the same manner as a mortgage lender, obtains and maintains bond coverage for mortgage originators consistent with section 6131(c)(5) and files an annual report consistent with section 6135(a)(3). (B) Annually, in a form acceptable to the department, demonstrates to the department that all of the mortgage originators employed by the nonprofit corporation have obtained and maintained the bond coverage required by section 6131(f)(4). (Aug. 5, 2009, P.L.117, No.31, eff. imd.) 2009 Amendment. Act 31 amended pars. (2), (3), (4), (5), (6), (7), (8), (9), (11) and (12) and deleted par. (10). Cross References. Section 6112 is referred to in sections 6102, 6111, 6131 of this title.