Which of the following is not exempt from mortgage licensing?

• A. Federal Government
• B. A loan originator that works for a bank
• C. A processor who is employed by a lender
• D. An individual wishing to originate mortgage loans for a lender or broker

Answer: (D)

Licensing is required for people who take residential mortgage loan applications or negotiate terms of a loan for compensation. Many roles in lending are exempt because they don’t perform those originator duties or they operate under federal or employer-based protections.

A federal government employee is exempt because their activities fall under government programs, not private origination. A loan originator who works for a bank is exempt since depository institutions’ employees operate under federal or institutional rules without a separate state MLO license. A processor employed by a lender is exempt because processors assist with processing, not with negotiating loan terms or taking applications for compensation.

The individual who wishes to originate mortgage loans for a lender or broker is not exempt because that role directly involves taking applications and negotiating terms for compensation, which triggers licensing as a mortgage loan originator.