§ 7-1-1001. Exemption for Certain Persons and Entities; Registration Requirements; Authorized Actions of Licensed Mortgage Lenders; Violations

1. The following persons shall not be required to obtain a mortgage loan originator, mortgage broker, or mortgage lender license and shall not be subject to the provisions of this article but may be subject to registration requirements, if registration of such persons is required by this article:
   1. Any lender authorized to engage in business as a bank, credit card bank, savings institution, or credit union under the laws of the United States, any state or territory of the United States, or the District of Columbia, the deposits of which are federally insured;
   2. Any wholly owned subsidiary of any lender described in paragraph (1) of this subsection. Any subsidiary that violates any applicable law of this article may be subject to a cease and desist order as provided for in Code Section 7-1-1018;

      (2.1) Any wholly owned subsidiary of any bank holding company; provided, however, that such subsidiary shall be subject to registration requirements in order to facilitate the department’s handling of consumer inquiries. Such requirements are contained in Code Section 7-1-1003.3;

   3. Registered mortgage loan originators, when acting for an entity described in paragraph (1) or (2) of this subsection. To qualify for this exemption, an individual shall be registered with and maintain a unique identifier through registration with the Nationwide Multistate Licensing System and Registry;
   4. Any individual who offers or negotiates terms of a residential mortgage loan with or on behalf of an immediate family member of such individual. For purposes of this exemption, the term “immediate family member” means a spouse, child, sibling, parent, grandparent, or grandchild. Immediate family members shall include stepparents, stepchildren, stepsiblings, and adoptive relationships;
   5. An attorney licensed to practice law in Georgia who negotiates the terms of a residential mortgage loan on behalf of a client as an ancillary matter to the attorney’s representation of the client, unless the attorney is compensated by a lender, a mortgage broker, or other mortgage loan originator or by any agent of such lender, mortgage broker, or other mortgage loan originator;
   6. A Georgia licensed real estate broker or real estate salesperson not actively engaged in the business of negotiating mortgage loans or a Georgia licensed real estate salesperson providing information to a lender or its agent related to an existing or potential short sale transaction in which a separate fee is not received by such real estate broker or real estate salesperson; provided, however, that such real estate broker or real estate salesperson who directly or indirectly negotiates, places, or finds a mortgage for others shall not be exempt from the provisions of this article;
   7. Any person performing any act relating to mortgage loans under order of any court;
   8. Any natural person or the estate of or trust created by a natural person making a mortgage loan with his or her own funds for his or her own investment, including those natural persons or the estates of or trusts created by such natural persons who make a purchase money mortgage for financing sales of their own property;
   9. Any agency, division, or instrumentality of the federal government of the United States of America; the government of the State of Georgia; the government of any other state of the United States; or any county or municipal government of the State of Georgia. This includes, but is not limited to, the Georgia Housing and Finance Authority, the Georgia Development Authority, the Federal National Mortgage Association (FNMA), the Federal Home Loan Mortgage Corporation (FHLMC), the Government National Mortgage Association (GNMA), the United States Department of Housing and Urban Development (HUD), the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), the Farmers Home Administration (FmHA), and the Farm Credit Administration and its chartered agricultural credit associations;
   10. Any individual who offers or negotiates terms of a residential mortgage loan secured by a dwelling that serves as the individual’s residence;
   11. Any person who makes a mortgage loan to an employee of such person as an employment benefit;
   12. Any licensee under Chapter 3 of this title, the “Georgia Installment Loan Act,” provided that any mortgage loan made by such licensee is for $3,000.00 or less;
   13. Nonprofit corporations making mortgage loans to promote home ownership or improvements for the disadvantaged;
   14. A natural person employed by a licensed or registered mortgage broker, a licensed or registered mortgage lender, or any person exempted from the mortgage broker or mortgage lender licensing requirements of this article when acting within the scope of employment and under the supervision of the mortgage broker or mortgage lender or exempted person as an employee and not as an independent contractor, except those natural persons exempt from licensure as a mortgage broker or mortgage lender under paragraph (17) of this subsection. To be exempt from licensure as a mortgage broker or mortgage lender, a natural person shall be employed by only one such employer and shall be at all times eligible for employment in compliance with the provisions and prohibitions of Code Section 7-1-1004. Such natural person, who meets the definition of mortgage loan originator provided in paragraph (22) of Code Section 7-1-1000, shall be subject to mortgage loan originator licensing requirements. A natural person against whom a cease and desist order has become final shall not qualify for this exemption while under the employment time restrictions of subsection (o) of Code Section 7-1-1004 if such order was based on a violation of Code Section 7-1-1002 or 7-1-1013 or whose license was revoked within five years of the date such person was hired;
   15. Any person who purchases mortgage loans from a mortgage broker or mortgage lender solely as an investment and who is not in the business of brokering, making, purchasing, or servicing mortgage loans;
   16. Any natural person who makes five or fewer mortgage loans in any one calendar year. A person other than a natural person who makes five or fewer mortgage loans in any one calendar year shall not be exempt from the licensing requirements of this article;
   17. 1. A natural person who is under an exclusive written independent contractor agreement with any person that is a licensed mortgage broker, so long as such licensed mortgage broker also meets the following requirements, subject to the review and approval of the department:
          1. The licensee continuously provides a surety bond as required by Code Section 7-1-1003.2 in the amount of $150,000.00 plus $50,000.00 per exempt natural person, not to exceed a maximum of $2 million to cover its activities as well as the activities of all of its natural persons exempted by this paragraph;
          2. The licensee has applied for and been granted a mortgage broker license, consistent with the provisions of this article and renewable annually;
          3. The licensee has paid applicable fees for this license, which license fees shall be the sum of the cost of the individual mortgage broker license fees if each exempt natural person received a mortgage broker license;
          4. The licensee has full and direct financial responsibility for the mortgage activities of such natural person and full and direct responsibility for the proper education of such natural person, the handling of consumer complaints related to such natural person, and the supervision of the mortgage activities of such natural person. The licensee shall supervise such natural person on an ongoing and regular basis and shall be accountable for the mortgage activities of such natural person;
          5. The licensee or the parent company if the licensee is a wholly owned subsidiary:
             1. Files reports under Section 13(a) or 15(d) of the Securities Exchange Act of 1934;
             2. Has a market capitalization in excess of $4 billion at the time of the initial application for a mortgage broker license based on the number of outstanding shares at the end of the quarter as disclosed in the most recent Form 10-Q filed with the United States Securities and Exchange Commission; and
             3. Has equity securities that are listed on the New York Stock Exchange, the National Association of Securities Dealers Automated Quotations, or other stock market approved by the department in writing;
          6. At the time of the initial application for a mortgage broker license, the licensee has never had a mortgage lender license or mortgage broker license revoked or suspended in Georgia or any other state;
          7. The licensee, the parent company if the licensee is a wholly owned subsidiary, or an affiliate of the licensee if both the affiliate and licensee are wholly owned subsidiaries of the same parent company, is licensed by the office of the Commissioner of Insurance as an insurance company or is registered with the Secretary of State as a broker-dealer;
          8. The licensee is licensed as a mortgage lender or mortgage broker in ten or more states; and
          9. At the time of the initial application for a mortgage broker license, the licensee has received at least a satisfactory evaluation in the most recent examination conducted by the majority of the states in which it has a mortgage broker or mortgage lender license and has adequately addressed with the department any unsatisfactory evaluations in the most recent examination conducted by any state in which it has a mortgage broker or mortgage lender license.
       2. To maintain the exemption, a natural person shall:
          1. Solicit, process, place, or negotiate a mortgage loan to be brokered only by the licensee;
          2. Be at all times in compliance with this article, including the provisions and prohibitions of Code Section 7-1-1013, the provisions and prohibitions applicable to employees under Code Section 7-1-1004, and the department’s rules and regulations;
          3. Be licensed as a mortgage loan originator in Georgia and work exclusively for the licensee, the parent company if the licensee is a wholly owned subsidiary, or an affiliate of the licensee if both the affiliate and licensee are wholly owned subsidiaries of the same parent company; and
          4. Be licensed as an insurance agent with the office of the Commissioner of Insurance or registered as a broker-dealer agent with the Secretary of State on behalf of the licensee, the parent company of the licensee if the licensee is a wholly owned subsidiary of the parent company, or an affiliate of the licensee if both the affiliate and licensee are wholly owned subsidiaries of the same parent company.
   18. 1. An employee of a bona fide nonprofit corporation who acts as a mortgage loan originator only with respect to his or her work duties with the bona fide nonprofit corporation and who acts as a mortgage loan originator only with respect to mortgage loans with terms that are favorable to the borrower shall be exempt from obtaining a mortgage loan originator license. In order for a corporation to be considered a bona fide nonprofit corporation under this paragraph, the department shall determine, under criteria and pursuant to processes established by the department, that the nonprofit corporation:
          1. Has the status of a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1986;
          2. Promotes affordable housing;
          3. Conducts its activities in a manner that serves public or charitable purposes, rather than commercial purposes;
          4. Receives funding and revenue and charges fees in a manner that does not incentivize it or its employees to act other than in the best interests of its clients;
          5. Compensates its employees in a manner that does not incentivize employees to act other than in the best interests of its clients;
          6. Provides or identifies for the borrower mortgage loans with terms favorable to the borrower and comparable to mortgage loans and housing assistance provided under government housing assistance programs. In order for mortgage loans to have terms that are favorable to the borrower, the department shall determine that the terms are consistent with loan origination in a public or charitable context, rather than in a commercial context; and
          7. Satisfies the exemption from licensure set forth in paragraph (13) of this subsection.
       2. The department shall periodically examine the books and activities of an organization it has previously identified as a bona fide nonprofit corporation for purposes of this paragraph in order to determine if it continues to meet the criteria for such status under subparagraph (A) of this paragraph. In conducting such an examination, the department shall have all of the powers set forth in Code Section 7-1-1009. In the event the nonprofit corporation no longer qualifies for such status, then the employee exemption from having a mortgage loan originator license shall no longer be applicable; or
   19. Any person who purchases or holds closed mortgage loans for the sole purpose of securitization into a secondary market, provided that such person holds the individual loans for less than seven days.
2. Exemptions enumerated in paragraphs (1), (2), (2.1), (7), (8), (9), (11), (12), (13), (14), (15), (16), and (17) of subsection (a) of this Code section shall be exemptions from licensure as a mortgage broker or mortgage lender only. Nothing in paragraphs (1), (2), (2.1), (7), (8), (9), (11), (12), (13), (14), (15), (16), and (17) of subsection (a) of this Code section shall be intended to exempt natural persons from compliance with mortgage loan originator licensing requirements as set forth in this article and the Secure and Fair Enforcement for Mortgage Licensing Act of 2008. Individuals that transact business as a mortgage loan originator, unless specifically exempted by paragraph (3), (4), (5), (6), (10), or (18) of subsection (a) of this Code section, shall obtain a mortgage loan originator license as required by Code Section 7-1-1002 whether they are employed by a mortgage broker, mortgage lender, or person exempted as a mortgage broker or lender as set forth in this subsection.
3. A licensed mortgage lender is authorized to engage in all activities that are authorized for a mortgage broker and, as a result, shall not be required to obtain a mortgage broker license.
4. Any violation of this article or the rules and regulations of the department by a natural person exempted pursuant to paragraph (17) of subsection (a) of this Code section shall be deemed to be a violation by both the licensee and the exempt natural person for purposes of the enforcement provisions of this article.

History. Code 1981, § 7-1-1001 , enacted by Ga. L. 1993, p. 543, § 1; Ga. L. 1994, p. 570, § 2; Ga. L. 1996, p. 848, § 14; Ga. L. 1997, p. 485, § 31; Ga. L. 1999, p. 674, § 30; Ga. L. 2000, p. 174, § 23; Ga. L. 2003, p. 843, § 16; Ga. L. 2006, p. 750, § 1/SB 505; Ga. L. 2007, p. 502, § 33/SB 70; Ga. L. 2009, p. 252, § 1/HB 312; Ga. L. 2010, p. 878, § 7/HB 1387; Ga. L. 2011, p. 518, § 7/HB 239; Ga. L. 2011, p. 752, § 7/HB 142; Ga. L. 2012, p. 775, § 7/HB 942; Ga. L. 2013, p. 638, § 1/HB 83; Ga. L. 2014, p. 421, § 1/HB 750; Ga. L. 2016, p. 390, §§ 6-1, 7-4/HB 811; Ga. L. 2019, p. 828, § 32/HB 185; Ga. L. 2020, p. 156, § 9/SB 462; Ga. L. 2020, p. 493, § 7/SB 429; Ga. L. 2021, p. 323, § 36/HB 111; Ga. L. 2022, p. 220, § 35/HB 891; Ga. L. 2022, p. 352, § 7/HB 1428.

The 2019 amendment, effective July 1, 2019, substituted “if registration of such persons is required” for “unless otherwise provided” near the end of subsection (a); and added subsection (c).

The first 2020 amendment, effective June 30, 2020, substituted “Georgia Installment Loan Act” for “Georgia Industrial Loan Act” in paragraph (a)(12). The second 2020 amendment, effective July 29, 2020, part of an Act to revise, modernize, and correct the Code, substituted “Nationwide Multistate Licensing System and Registry” for “Nation-wide Multistate Licensing System and Registry” in the second sentence of paragraph (a)(3).

The 2021 amendment, effective July 1, 2021, substituted “Any agency, division, or instrumentality of: the federal government of the United States of America; the government of the State of Georgia; the government of any other state of the United States; or any county or municipal of the State of Georgia. This includes, but is not limited to,” for “The United States of America, the State of Georgia or any other state, and any agency, division, or corporate instrumentality of any governmental entity, including without limitation:” at the beginning of paragraph (a)(9).

The 2022 amendments.

The first 2022 amendment, effective July 1, 2022, substituted “salesperson; provided, however, that” for “salesperson; however,” in paragraph (a)(6), rewrote paragraph (a)(17), substituted “; or” for a period at the end of subparagraph (a)(18)(B), added paragraph (a)(19); and added subsection (d). The second 2022 amendment, effective May 2, 2022, part of an Act to revise, modernize, and correct the Code, substituted “instrumentality of the” for “instrumentality of: the” in paragraph (a)(9).

Code Commission notes.

Pursuant to Code Section 28-9-5, in 1993, a semicolon was substituted for a period at the end of paragraph (6) of subsection (a) (now paragraph (a)(8)).

Pursuant to Code Section 28-9-5, in 2000, “Code section” was substituted for “subsection” in the first sentence in paragraph (2) (now paragraph (a)(2)).

Law reviews.

For annual survey on real property, see 65 Mercer L. Rev. 233 (2013).