Terms Used In Montana Code > Title 32 > Chapter 9 - Residential Mortgage Brokers, Lenders, Servicers, and Loan Originators

• Advertising: means a commercial message in any medium, including social media and software, that promotes, either directly or indirectly, a residential mortgage loan transaction. See Montana Code 32-9-103
• Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
• Application: means a request, in any form, for an offer of residential mortgage loan terms or a response to a solicitation of an offer of residential mortgage loan terms and includes the information about the borrower that is customary or necessary in a decision on whether to make such an offer. See Montana Code 32-9-103
• Approved test provider: means any test provider approved by the NMLS. See Montana Code 32-9-103
• Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
• Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
• Bona fide not-for-profit entity: means an entity that:

  (a)maintains tax-exempt status under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code, 26 U. See Montana Code 32-9-103

• Bona fide third party: means a person that provides services relative to the origination of a residential mortgage loan. See Montana Code 32-9-103
• Borrower: means a person seeking a residential mortgage loan or an obligor on a residential mortgage loan. See Montana Code 32-9-103
• Branch office: means a location at which a licensee conducts business other than a licensee's principal place of business. See Montana Code 32-9-103
• Clerical or support duties: includes :

  (i)the receipt, collection, distribution, and analysis of information common for the processing or underwriting of a residential mortgage loan; and

  (ii)communicating with a consumer to obtain the information necessary for the processing or underwriting of a residential mortgage loan to the extent that the communication does not include offering or negotiating loan rates or terms or counseling consumers about residential mortgage loan rates or terms. See Montana Code 32-9-103

• Clerk of court: An officer appointed by the court to work with the chief judge in overseeing the court's administration, especially to assist in managing the flow of cases through the court and to maintain court records.
• Commercial context: means that an individual who acts as a mortgage loan originator does so for the purpose of obtaining profit for an entity or individual for which the individual acts, including a sole proprietorship or other entity that includes only the individual, rather than exclusively for public, charitable, or family purposes. See Montana Code 32-9-103
• Common law: The legal system that originated in England and is now in use in the United States. It is based on judicial decisions rather than legislative action.
• Complaint: A written statement by the plaintiff stating the wrongs allegedly committed by the defendant.
• Confidential supervisory information: means :

  (a)reports of examination, inspection, and visitation; nonpublic operating, condition, and compliance reports; supervisory letters; or similar documents, and any information contained in, derived from, used to create, or related to the documents;

  (b)any documents, materials, or records, including reports of examination, prepared by, or on behalf of, or for the use of the department or any state or federal financial services regulatory agency in the exercise of supervisory authority over a supervised entity, and any information derived from or used to prepare the documents, materials, or records;

  (c)any communications between the department and a supervised entity or a state or federal financial services regulatory agency related to the department's supervision of the entity;

  (d)any information received or generated by the department pursuant to 32-9-130;

  (e)confidential criminal justice information, as defined in 44-5-103;

  (f)personal information protected by an individual privacy interest; and

  (g)information that is exempt from disclosure pursuant to 12 U. See Montana Code 32-9-103

• Control: means the power, directly or indirectly, to direct the management or policies of an entity, whether through ownership of securities, by contract, or otherwise. See Montana Code 32-9-103
• Corporate governance: means the structure of an institution and how it is managed, including the corporate rules, policies, processes, and practices used to oversee and manage the institution. See Montana Code 32-9-201
• Covered institution: means a nonbank servicer:

  (a)with servicing portfolios of 2,000 or more 1- to 4-unit residential mortgage loans serviced or subserviced for others, excluding whole loans owned, and loans being interim serviced prior to sale as of the most recent calendar year end, reported in the NMLS mortgage call report; and

  (b)that operates in two or more states, districts, or territories of the United States either currently or as of the prior calendar year end. See Montana Code 32-9-201

• Credit report: A detailed report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness. ^{Source: OCC}
• Customary: means according to usage. See Montana Code 1-1-206
• Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
• Deed: The legal instrument used to transfer title in real property from one person to another.
• Defendant: In a civil suit, the person complained against; in a criminal case, the person accused of the crime.
• Department: means the department of administration provided for in 2-15-1001, acting through its division of banking and financial institutions. See Montana Code 32-9-103
• Department: means the department of administration provided for in 2-15-1001, acting through its division of banking and financial institutions. See Montana Code 32-9-201
• Department: means the department of administration provided for in 2-15-1001. See Montana Code 2-18-1101
• Depository institution: has the meaning provided in section 3 of the Federal Deposit Insurance Act, 12 U. See Montana Code 32-9-103
• Designated manager: means a mortgage loan originator with at least 3 years of experience as a mortgage loan originator or registered mortgage loan originator who is designated by an entity as the individual responsible for the operation of a particular location that is under the designated manager's full management, supervision, and control. See Montana Code 32-9-103
• Discovery: Lawyers' examination, before trial, of facts and documents in possession of the opponents to help the lawyers prepare for trial.
• Dwelling: has the meaning provided in 15 U. See Montana Code 32-9-103
• Employee: means an employee of the executive, legislative, or judicial branch or the Montana university system. See Montana Code 2-18-1101
• Entity: means a business organization, including a sole proprietorship. See Montana Code 32-9-103
• Escrow: Money given to a third party to be held for payment until certain conditions are met.
• Escrow account: means a depository account with a financial institution that provides deposit insurance and that is separate and distinct from any personal, business, or other account of the mortgage lender or mortgage servicer and is maintained solely for the holding and payment of escrow funds. See Montana Code 32-9-103
• Escrow funds: means funds entrusted to a mortgage lender or mortgage servicer by a borrower for payment of taxes, insurance, or other payments to be made in connection with the servicing of a loan. See Montana Code 32-9-103
• Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
• Expungement: means a court-ordered process that involves the destruction of documentation related to past arrests and convictions. See Montana Code 32-9-103
• Fair Credit Reporting Act: A federal law, established in 1971 and revised in 1997, that gives consumers the right to see their credit records and correct any mistakes. ^{Source: OCC}
• Federal banking agency: means the board of governors of the federal reserve system, the comptroller of the currency, the national credit union administration, or the federal deposit insurance corporation. See Montana Code 32-9-103
• Federal Reserve System: The central bank of the United States. The Fed, as it is commonly called, regulates the U.S. monetary and financial system. The Federal Reserve System is composed of a central governmental agency in Washington, D.C. (the Board of Governors) and twelve regional Federal Reserve Banks in major cities throughout the United States. ^{Source: OCC}
• Fraud: Intentional deception resulting in injury to another.
• Garnishment: Generally, garnishment is a court proceeding in which a creditor asks a court to order a third party who owes money to the debtor or otherwise holds assets belonging to the debtor to turn over to the creditor any of the debtor
• GSE: means government-sponsored enterprises, the federal national mortgage association, or the federal home loan mortgage corporation. See Montana Code 32-9-201
• Housing finance agency: includes the Montana board of housing provided for in 2-15-1814. See Montana Code 32-9-103
• Independent contractor: means an individual who performs duties other than at the direction of and subject to the supervision and instruction of another individual who is licensed and registered in accordance with this part or who is not required to be licensed in accordance with 32-9-104(1)(b), (1)(d), or (1)(g). See Montana Code 32-9-103
• Independent contractor entity: means an entity that offers or provides clerical or support duties for another person. See Montana Code 32-9-103
• Individual: means a natural person. See Montana Code 32-9-103
• Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. ^{Source: OCC}
• Interim serviced prior to sale: means the activity of collecting a limited number of contractual mortgage payments immediately after origination on loans held for sale but prior to the loans being sold into the secondary market. See Montana Code 32-9-201
• Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
• Knowingly: means only a knowledge that the facts exist which bring the act or omission within the provisions of this code. See Montana Code 1-1-204
• Licensee: means a person authorized pursuant to this part to engage in activities regulated by this part. See Montana Code 32-9-103
• liquidity: means the financial resources necessary to manage liquidity risk arising from servicing functions required in acquiring and financing mortgage servicing rights, hedging costs, including margin calls, associated with the mortgage servicing rights asset and financing facilities, and advances or costs of advance financing for principal, interest, taxes, insurance, and any other servicing related advances. See Montana Code 32-9-201
• Loan commitment: means a statement transmitted in writing or electronically by a mortgage lender setting forth the terms and conditions upon which the mortgage lender is willing to make a particular residential mortgage loan to a particular borrower. See Montana Code 32-9-103
• Loan processor or underwriter: means an individual who, with respect to the origination of a residential mortgage loan, performs clerical or support duties as an employee at the direction of and subject to the supervision of a licensed mortgage loan originator or registered mortgage loan originator. See Montana Code 32-9-103
• Mortgage: means a consensual interest in real property located in Montana, including improvements, securing a debt evidenced by a mortgage, trust indenture, deed of trust, or other lien on real property. See Montana Code 32-9-103
• Mortgage broker: means an entity that obtains, attempts to obtain, or assists in obtaining a mortgage loan for a borrower from a mortgage lender in return for consideration or in anticipation of consideration or holds itself out as being able to assist a person in obtaining a mortgage loan. See Montana Code 32-9-103
• Mortgage call report: means the quarterly or annual report of residential real estate loan origination, servicing, and financial information completed by companies licensed in NMLS. See Montana Code 32-9-201
• Mortgage lender: means an entity that closes a residential mortgage loan, advances funds, offers to advance funds, commits to advancing funds for a mortgage loan applicant, or holds itself out as being able to perform any of those functions. See Montana Code 32-9-103
• Mortgage loan: A loan made by a lender to a borrower for the financing of real property. ^{Source: OCC}
• Mortgage loan originator: means an individual who for compensation or gain or in the expectation of compensation or gain:

  (i)takes a residential mortgage loan application; or

  (ii)offers or negotiates terms of a residential mortgage loan. See Montana Code 32-9-103

• Mortgage servicer: means an entity that:

  (a)for forward mortgages:

  (i)engages, for compensation or gain from another or on its own behalf, in the business of receiving any scheduled periodic payment from a borrower pursuant to the terms of a residential mortgage loan, residential mortgage servicing documents, or a residential mortgage servicing contract;

  (ii)meets the definition of servicer in 12 U. See Montana Code 32-9-103

• Mortgage servicing rights: means the contractual right to service residential mortgage loans on behalf of the owner of the associated mortgage in exchange for specified compensation in accordance with the servicing contract. See Montana Code 32-9-201
• Mortgage servicing rights investor: means entities that invest in and own mortgage servicing rights and rely on subservicers to administer the loans on their behalf. See Montana Code 32-9-201
• National Credit Union Administration: The federal regulatory agency that charters and supervises federal credit unions. (NCUA also administers the National Credit Union Share Insurance Fund, which insures the deposits of federal credit unions.) ^{Source: OCC}
• NMLS: means a licensing system developed and maintained by the conference of state bank supervisors and the American association of residential mortgage regulators for the registration and licensing of persons providing nondepository financial services. See Montana Code 32-9-103
• Nolo contendere: No contest-has the same effect as a plea of guilty, as far as the criminal sentence is concerned, but may not be considered as an admission of guilt for any other purpose.
• Nontraditional mortgage product: means any mortgage product other than a 30-year, fixed-rate mortgage. See Montana Code 32-9-103
• Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
• Operating liquidity: means the funds necessary to perform normal business operations, such as payment of rent, salaries, interest expense, and other typical expenses associated with operating the entity. See Montana Code 32-9-201
• origination of a residential mortgage loan: means all activities related to a residential mortgage loan from the taking of a residential mortgage loan application through the completion of all required loan closing documents and funding of the residential mortgage loan. See Montana Code 32-9-103
• Person: means an individual, sole proprietorship, corporation, company, limited liability company, partnership, limited liability partnership, trust, or association. See Montana Code 32-9-103
• Precedent: A court decision in an earlier case with facts and law similar to a dispute currently before a court. Precedent will ordinarily govern the decision of a later similar case, unless a party can show that it was wrongly decided or that it differed in some significant way.
• Public law: A public bill or joint resolution that has passed both chambers and been enacted into law. Public laws have general applicability nationwide.
• Real estate brokerage activities: means activities that involve offering or providing real estate brokerage services to the public, including:

  (a)acting as a real estate salesperson or real estate broker for a buyer, seller, lessor, or lessee of real property;

  (b)bringing together parties interested in the sale, purchase, lease, rental, or exchange of real property;

  (c)negotiating, on behalf of any party, any portion of a contract relating to the sale, purchase, lease, rental, or exchange of real property other than in connection with providing financing with respect to the transaction;

  (d)engaging in any activity for which a person is required to be licensed as a real estate salesperson or real estate broker under Montana law; or

  (e)offering to engage in any activity or act in any capacity described in subsections (38)(a) through (38)(d). See Montana Code 32-9-103

• Real property: means lands, tenements, hereditaments, and possessory title to public lands. See Montana Code 1-1-205
• Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
• Registered mortgage loan originator: means an individual who:

  (a)meets the definition of mortgage loan originator and is an employee of:

  (i)a depository institution;

  (ii)a subsidiary that is wholly owned and controlled by a depository institution and regulated by a federal banking agency; or

  (iii)an institution regulated by the farm credit administration; and

  (b)is registered with and maintains a unique identifier through the NMLS. See Montana Code 32-9-103

• Regularly engage: means that a person:

  (a)has engaged in the business of a mortgage broker, mortgage lender, mortgage servicer, or mortgage loan originator on more than five residential mortgage loans in the previous calendar year or expects to engage in the business of a mortgage broker, mortgage lender, mortgage servicer, or mortgage loan originator on more than five residential mortgage loans in the current calendar year; or

  (b)has served as the prospective source of financing or performed other phases of loan originations on more than five residential mortgage loans in the previous calendar year or expects to serve as the prospective source of financing or perform some other phases of loan origination on more than five residential mortgage loans in the current calendar year. See Montana Code 32-9-103

• Residential mortgage loan: means a loan primarily for personal, family, or household use secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling or on residential real estate located in Montana. See Montana Code 32-9-103
• Residential real estate: means any real property located in the state of Montana upon which is constructed a dwelling or upon which a dwelling is intended to be built within a 2-year period, subject to 24 C. See Montana Code 32-9-103
• Responsible individual: means a Montana-licensed mortgage loan originator with at least 1 1/2 years of experience as a mortgage loan originator or registered mortgage loan originator who is designated by an independent contractor entity as the individual responsible for the operation of a particular location that is under the responsible individual's full management, supervision, and control. See Montana Code 32-9-103
• Restitution: The court-ordered payment of money by the defendant to the victim for damages caused by the criminal action.
• Reverse mortgage: means a loan collateralized by real estate, typically made to borrowers over 55 years of age, that does not require contractual monthly payments and is typically repaid upon the death of the borrower through the sale of the home or refinance by the heirs. See Montana Code 32-9-201
• Risk management: means the policies and procedures designed to identify, measure, monitor, and mitigate risk sufficient for the level of sophistication of the servicer. See Montana Code 32-9-201
• Service of process: The service of writs or summonses to the appropriate party.
• Service provider: means a person who performs activities relating to the business of mortgage origination, lending, or servicing on behalf of a licensee. See Montana Code 32-9-103
• Servicer: means the entity performing the routine administration of residential mortgage loans on behalf of the owner or owners of the related mortgages under the terms of a servicing contract. See Montana Code 32-9-201
• Subpoena: A command to a witness to appear and give testimony.
• Subpoena duces tecum: A command to a witness to produce documents.
• Testimony: Evidence presented orally by witnesses during trials or before grand juries.
• Trust account: A general term that covers all types of accounts in a trust department, such as estates, guardianships, and agencies. ^{Source: OCC}
• Truth in Lending Act: The Truth in Lending Act is a federal law that requires lenders to provide standardized information so that borrowers can compare loan terms. In general, lenders must provide information on ^{Source: OCC}
• Ultimate equity owner: means an individual who, directly or indirectly, owns or controls an ownership interest in a corporation, a foreign corporation, an alien business organization, or any other form of business organization, regardless of whether the individual owns or controls an ownership interest, individually or in any combination, through one or more persons or one or more proxies, powers of attorney, nominees, corporations, associations, partnerships, trusts, joint-stock companies, or other entities or devices. See Montana Code 32-9-103
• Unencumbered investment grade assets held for sale or trade: means agency mortgage-backed securities, obligations of GSEs, and U. See Montana Code 32-9-201
• Unique identifier: means a number or other identifier assigned by protocols established by the NMLS. See Montana Code 32-9-103
• Usual: means according to usage. See Montana Code 1-1-206
• Venue: The geographical location in which a case is tried.
• Willfully: when applied to the intent with which an act is done or omitted, means a purpose or willingness to commit the act or make the omission referred to. See Montana Code 1-1-204