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Banking Interpretations

July 10, 2001

Philip K. Johnson
Lathrop & Gage, L.C.
Suite 2600
2345 Grand Boulevard
Kansas City, MO 64108-2684

Re:  Requirement for registration as a mortgage broker

Dear Mr. Johnson:

Your letter to Mr. Ted McElroy, Public Information Office, New York State Banking Department ("Department") regarding whether your client would be required to obtain a mortgage broker registration in order to conduct certain business activities in New York State has been referred to me for response.

According to your letter, your client would be retained by a licensed mortgage banker or registered mortgage broker ("Company") to place telephone calls to individuals listed in a database provided by the Company.  Your client would ask each individual whether he would be interested in speaking to a representative from the Company about refinancing his current mortgage or obtaining a second mortgage.  If the individual expresses such an interest, your client will inform him that a representative of the Company will be contacting him.  If the individual is not interested, then your client will remove that individual's name from the database.  This telephone call shall be the only contact between your client and the individual.

Further, you state that your client will not participate in any aspect of the negotiation of the prospective mortgage and it will not provide the individual with any information respect to the rates, terms or other conditions of the loan nor will it obtain any personal or financial information from the individual.  Importantly, the compensation paid to your client by the Company shall be strictly on a fixed fee, per hour basis and it will not receive any compensation on commission basis or that is otherwise dependent upon the application being accepted or the mortgage loan being funded.

Please be advised that in accordance with previous opinions issued by the Department's Mortgage Banking Division, the activity described in your letter does not constitute mortgage brokerage and therefore, Article 12-D of the Banking Law does not require your client to register as a mortgage broker.

I trust this is responsive to your inquiry.

Very truly yours,

Alvin A. Narin
Assistant Counsel

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