We believe that an employee who does not engage in any mortgage loan originator (MLO) activities would be allowed to service existing residential mortgage loans. If an employee is neither taking consumer residential mortgage loan applications (for personal, family, or household use) nor offering or negotiating the terms of such loans for compensation or gain, the employee is not required to register as an MLO. The employee’s ability to service residential mortgage loans is not affected. 12 CFR 1007.103(a).

Additionally, an employee who “arranges, negotiates, or otherwise obtains an extension of consumer credit” secured by a dwelling is exempt from the loan originator compensation restrictions and the prohibition on steering in Regulation Z. 12 CFR 1026.36(a)(1). Of course, a loan servicer who is servicing consumer loans secured by the consumer’s principal dwelling is subject to the servicing practices rules in Regulation Z. See 12 CFR 1026.36(c). (“Servicing” includes receiving payments from the borrower and making payments to the owner of the loan. 12 CFR 1026.36(c)(2)12 CFR 1024.2.)

Finally, we note that you are required to have policies and procedures in place to ensure compliance with the MLO rules, which must include a process of identifying which employees must be registered as MLOs. 12 CFR 1007.104(a).