A 4-person brokerage takes applications and places them with 3 wholesale lenders, holding no warehouse line and funding nothing. Does this mortgage brokerage have an AML program obligation despite not funding loans itself?
Correct Answer
A) It is a loan or finance company and owes an AML program of its own
The anti-money laundering program requirement reaches residential mortgage lenders and originators as loan or finance companies, and taking applications and offering or negotiating terms is originating whether or not the company funds anything. Other choices: the wholesale lender having its own obligations does not transfer this one; there is no carve-out at 10 employees; and the number of lenders a file is placed with has no bearing on whether the program is owed. Source: 31 CFR 1029.100 and 1029.210, covered loan or finance companies
Why This Is the Correct Answer
The anti-money laundering program requirement reaches residential mortgage lenders and originators as loan or finance companies, and taking applications and offering or negotiating terms is originating whether or not the company funds anything. Other choices: the wholesale lender having its own obligations does not transfer this one; there is no carve-out at 10 employees; and the number of lenders a file is placed with has no bearing on whether the program is owed. Source: 31 CFR 1029.100 and 1029.210, covered loan or finance companies
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