The requirement to obtain a mortgage license is broad and the exemptions to licensing are narrow.  There are four mortgage license types and the main sections of the statute which govern the requirement to be licensed are as follows:  (1)  Mortgage Broker – A.R.S. § 6-903; (2) Mortgage Banker – A.R.S. § 6-943; (3) Commercial Mortgage Broker – A.R.S. § 6-901; and (4) Commericial Mortgage Banker – A.R.S. § 6-973.  For example, the mortgage banker statutes provide at A.R.S. § 6-943(A):

A person shall not act as a mortgage banker if he is not licensed under this article.

“Mortgage banker” is defined at A.R.S. § 6-941(5):

[A] person who is not exempt under section 6-942 and who for compensation or in the expectation of compensation either directly or indirectly makes, negotiates or offers to make or negotiate a mortgage banking loan or a mortgage loan.

“Mortgage banking loan” is defined in A.R.S. § 6-941(6) as:

[A] a loan which is funded exclusively from the mortgage banker’s own resources, which is directly or indirectly secured by a mortgage or deed of trust or any lien interest on real estate located in this state and which is created with the consent of the owner of the real property. For the purposes of this paragraph, “own resources” means any of the following:

(a) Cash, corporate capital, warehouse credit lines at commercial banks, savings banks or savings and loan associations or other sources that are liability items on the mortgage banker’s financial statements for which its assets are pledged.

(b) Correspondent contracts between the mortgage banker and a bank, savings bank, trust company, savings and loan association, credit union, profit sharing or pension trust, consumer lender or insurance company.

(c) The mortgage banker’s affiliates’ cash, corporate capital, warehouse credit lines at commercial banks or other sources that are liability items on the affiliates’ financial statements for which the affiliates’ assets are pledged.

“Mortgage loan” is comprehensively defined in A.R.S. § 6-941(8) as:

[A]ny loan, other than a mortgage banking loan, secured by a mortgage or deed of trust or any lien interest on real estate located in this state and created with the consent of the owner of the real estate.

Exemptions to licensing are described in the following statutes:  (1) Mortgage Broker – A.R.S. § 6-902; (2) Mortgage Banker – A.R.S. § 6-942; (3) Commercial Mortgage Broker – A.R.S. § 6-902; and (4) Commericial Mortgage Banker – A.R.S. § 6-972.  Review of these provisions, along with consideration of policies of the AZDFI and interpretation by the Arizona Attorney General’s Office over the past twenty years, indicate that if a person or entity is originating loans involving Arizona real property or Arizona borrowers and negotiating with the borrower directly, the likelihood is high that a mortgage license is required.  Carolyn Goldman is available to discuss and provide advice as to the licensing requirements and if an exemption to licensing applies.