A substantial equity owner of a Delaware originating entity personally engages in mortgage loan originating in Delaware with respect to residential property. Which statement is most accurate?
Correct Answer
B) The owner can fit Delaware’s MLO definition for that activity
Delaware’s MLO definition includes any person who, as an originating entity or substantial equity owner of an originating entity, engages in mortgage loan originating in Delaware with respect to residential property.
Why This Is the Correct Answer
Delaware’s MLO definition includes any person who, as an originating entity or substantial equity owner of an originating entity, engages in mortgage loan originating in Delaware with respect to residential property.
Why the Other Options Are Wrong
Option A: Substantial equity owners are always outside the Delaware MLO definition even when originating
The exclusion is not absolute when the owner personally engages in MLO activity.
Option C: The owner is covered only if unpaid
Compensation is not the controlling limitation in the Delaware definition.
Option D: The owner is covered only for commercial property loans
The cited Delaware definition is tied to residential property.
Memory Technique
DE-C024 -> Delaware-definitions-and-exemptions
Exam Tip
Ownership status does not shield personal origination activity.
Common Mistakes to Avoid
- -Importing another state requirement into Delaware
- -Confusing NMLS baseline requirements with Delaware-specific rules
- -Treating operational assumptions as legal authority
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