Allowing commercial loan officers to conduct mortgage loan closings without registering as MLOs would be highly suspect. Any contact between the employees and borrowers before the loan closing, no matter how minor, would probably cause a regulator to consider the employees to be MLOs.

We agree that the MLO definition states that an individual will be considered an MLO if the individual “(i) Takes a residential mortgage loan application; and (ii) Offers or negotiates terms of a residential mortgage loan for compensation or gain.” 12 CFR 1007.102. However, this should not be interpreted to mean that an individual may either take mortgage loan applications or negotiate mortgage loan terms without being considered an MLO. Instead, we recommend referring to the exceptions to that definition, which are listed in the rule and detailed in Appendix A (particularly the exception for “purely administrative or clerical tasks”).  12 CFR 1007.102Appendix A to Part 1007—Examples of Mortgage Loan Originator Activities.

There is a de minimis exception for any employee who “who has never been registered or licensed through the Registry as a mortgage loan originator if during the past 12 months the employee acted as a mortgage loan originator for 5 or fewer residential mortgage loans.” 12 CFR 1007.101(c)(2). If a loan officer does not fall under the de minimis threshold, and will be closing residential mortgage loans, the loan officer should register as an MLO.