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Does a Bankruptcy Workout Require an MLO

Answered by: 
Randy Carey

Question: 
We have an employee that serves as the bank's Bankruptcy Officer. This employee does not lend directly to the public. They do not have an approved lending limit. This employee negotiates with the trustee/court/lawyer/borrower on an active bankruptcy to restructure loan terms according to the bankruptcy agreement. Would this employee need to be a registered MLO (SAFE Act) if they are negotiating terms for an active bankruptcy on a consumer mortgage loan?
Answer: 

I do not believe that there is an application involved in a situation like this:

Mortgage loan originator means

(1) An individual who:

(i) Takes a residential mortgage loan application; and

(ii) Offers or negotiates terms of a residential mortgage loan for compensation or gain.

First published on 05/19/2024

Filed under: 
Lending
Filed under lending as: 
Mortgage Loan Originator

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