N.Y. Comp. Codes R. & Regs. tit. 3, § 38.1 – Definitions.

(a) The term advertisement shall mean material used or intended to be used to induce the public to apply for a mortgage loan. Such term shall include any printed or published material, electronic media, audio or visual material, or descriptive literature concerning a mortgage loan to be solicited, processed, negotiated or funded by a mortgage broker, mortgage banker or exempt organization whether disseminated by direct mail, newspaper, magazine, radio or television broadcast, billboard, electronic media or similar display. The term advertisement shall not include promotional material containing 15 words or fewer relating to the mortgage business of the entity which material does not contain references to a specific rate or product, such as balloons, hats, pencils or pens, calendars or rulers displaying the name of the registrant, licensee or exempt organization. The term advertisement also shall not include any disclosures, program descriptions or other published materials prepared or authorized by any State or Federal government agency, nor shall such term include any material or communication which has been excluded from any definition of advertisement for purposes of any regulation of the Board of Governors of the Federal Reserve System regulating consumer credit disclosures.
(b) The term application shall have the same meaning as that term has in section 202.2(f) of Regulation B of the Federal Reserve System (12 CFR 202). The regulation, including the interpretations thereof contained in Supplement 1 to Part 202-Official Staff Interpretations, is incorporated by reference and is authored by the Board of Governors of the Federal Reserve System and published by the United States Government Printing Office, Washington, DC 20402. A copy is available for public inspection and copying at the New York City office of the New York State Banking Department located at the address stated in Supervisory Policy G 1 of this Title.
(c) The term application fee shall mean any fee taken by a mortgage broker, mortgage banker or exempt organization in connection with an application for a mortgage loan including any charge for soliciting, processing, placing or negotiating a mortgage loan. The term application fee does not include a commitment fee taken pursuant to section 38.4 or a lock-in fee taken pursuant to section 38.6 of this Part, nor does such term include payments to be remitted to third-party service providers, such as appraisal fees or fees for credit reports, nor payments or remittances to the mortgage broker, mortgage banker or exempt organization by the lender. In addition, the term application fee does not include a processing fee so long as the application fee does not include the cost of processing the application.
(d) The terms bonus and premium shall mean money or an equivalent given in addition to usual compensation.
(e) The term branch shall mean any location, separate from the head office, at which loan solicitation and/or loan processing takes place irrespective of whether the only contact with an applicant from that location is by internet, telephone, facsimile or other electronic process. The term shall not include the residences of any director, officer, partner, employee, independent contractor or consultant provided that the primary purpose of such residence is for personal, household or family use.
(f) The term branch manager shall mean the individual who is in charge of the operations of one or more branch locations irrespective of the title given to that individual.
(g) The term commitment shall mean a written or electronically transmitted offer to make a mortgage loan signed by a licensee or exempt organization.
(h) The term commitment agreement shall mean a commitment accepted by an applicant for a mortgage loan. Such acceptance shall be evidenced by either a hand-written or digital signature to the extent that such signatures are recognized as binding under New York State law.
(i) The term commitment fee shall mean a fee, exclusive of third-party charges, imposed by the licensee or exempt organization as consideration for binding the licensee or exempt organization to make a mortgage loan or as a lender’s requirement for acceptance by the consumer of a commitment.
(j) The term digital signature shall mean any electronic authentication method that provides the same assurance as a signature in a paper-based system.
(k) The term electronically transmitted or electronic media shall mean any transmission via diskette, wire or tape including but not limited to the Intranet (interactive or otherwise), the Internet, any other computer network, electronic mail, or any other similar method of transmission.
(l) The term employee shall mean:
1. (1) any individual performing a service for any one of either a mortgage broker, mortgage banker or exempt organization for whom such entity would be liable for withholding taxes pursuant to title 26 of the United States Code; or
2. (2) any individual engaged in regulated activities as an independent contractor pursuant to title 26 of the United States Code of any one of either a mortgage broker, mortgage banker or exempt organization.
(m) The term exempt organization shall mean any person or entity engaged in the business of making mortgage loans which entity is exempt from licensing under article 12-D of the Banking Law and Part 39 of this Title.
(n) The term lender shall mean a mortgage banker or an exempt organization pursuant to article 12-D of the New York Banking Law.
(o) The term lock-in agreement shall mean a written or electronically transmitted agreement between a mortgage banker or exempt organization and an applicant for a mortgage loan which, subject to the terms set forth therein, obligates the mortgage banker or exempt organization to make a mortgage loan at a specified rate and a specific number of points, if any.
(p) The term lock-in fee shall mean points or other fees, or discounts taken by a mortgage broker for transmittal to a mortgage banker or exempt organization or taken directly by a mortgage banker or exempt organization as consideration for the making of a lock-in agreement.
(q) The term make a loan or making a loan, shall mean for compensation or gain, either directly or indirectly, advancing funds, offering to advance funds, or making a commitment to advance funds to a mortgagor as a mortgage loan. As used in this Part, the term mortgagor shall refer only to a retail consumer/borrower.
(r) The term mortgage banker or licensee shall mean any person or entity licensed pursuant to article 12-D of the Banking Law and Regulation Part 410 of this Title to make mortgage loans.
(s) The term mortgage broker or registrant shall mean any person or entity registered pursuant to article 12-D of the Banking Law and Regulation Part 410 of this Title.
(t) The term mortgage loan shall mean a loan made to one or more individuals primarily for personal, family or household use primarily secured by a first of junior mortgage on residential real property located in this State or by certificates of stock or other evidence of ownership interests in, and proprietary leases from, corporations or partnerships formed for the purpose of cooperative ownership of real estate in this State. Such term shall not include residential loan products exempt pursuant to section 39.5 of this Title.
(u) The term net branch shall mean any location for which the branch manager does either or both of the following:
1. (1) incur or assume liability to a third party other than in the licensee or registrant’s name except for credit reports, appraisals and/or de minimus office supplies or makes payment on behalf of the licensee or registrant to the third party; or
2. (2) incur or assume liability to a third party other than in the licensee or registrant’s name by executing the lease for the branch premises or makes payment on behalf of the licensee or registrant to the third party. In addition, the term net branch shall mean any location for which the branch manager assumes a combination but not necessarily all, of the following indicia of ownership:
  1. (i) sharing in profits and/or losses of such location;
  2. (ii) controlling a corporate checkbook; or
  3. (iii) exercising control of personnel through the power to hire or fire individuals.
(v) The term point shall mean any fee or discount calculated as one percent of the principal amount of the loan or one percent of the amount financed, irrespective of how such point may be denominated by the mortgage broker, mortgage banker or exempt organization. The term point shall include, but not be limited to, percentage-based fees denominated as brokerage fees (excluding fees taken for real estate brokerage services), origination fees, or warehousing fees.
(w) The term premium pricing shall mean any pricing arrangement under which a loan application is submitted to a lender at an interest rate (including points) that will:
1. (1) meet the lender’s minimum yield requirements; and
2. (2) enable the mortgage broker, mortgage banker or exempt organization when acting in a mortgage brokerage capacity to receive as all or part of the difference between the interest rate (including points) received by the lender and the minimum interest rate (including points) at which the lender would have been willing to make the loan to the consumer/borrower.
(x) The term prevailing rate shall mean a mortgage loan rate that is set by the mortgage banker or exempt organization after the time a commitment is issued but prior to or on the closing date. Such rate may be fixed or variable.
(y) The term residential real property shall mean real property located in the State improved by a one-to-four-family owner-occupied dwelling used or occupied, or intended to be used or occupied, wholly or partly, as the home or residence of one or more owners, but shall not refer to unimproved real property upon which such dwelling is to be constructed.
(z) The term settlement cost shall mean the total cost to the consumer for each service required to be listed as a settlement service in the “Good Faith Estimate of Settlement Services” required in certain mortgage loan transactions by regulation X of the Department of Housing and Urban Development (24 CFR part 3500). The term settlement cost shall have the meaning described herein irrespective of whether the mortgage loan is subject to regulation X.
(aa) The terms soliciting, processing, placing and negotiating a mortgage loan shall mean performing or offering to perform such activities for compensation or gain, either directly or indirectly, with a lender on behalf of a third party.

For purposes of this Part: