(a) Maintenance of Records, Generally. In order to
ensure a mortgage company will have all records necessary to facilitate
an inspection (including an examination) of the mortgage company by
the Commissioner or the Commissioner's designee, enable the Commissioner
or the Commissioner's designee to investigate complaints against a
mortgage company or its sponsored originators, and otherwise ensure
compliance with the requirements of Finance Code Chapter 156, and
this chapter, a mortgage company must maintain records as prescribed
by this section.
(1) Format. The records required by this section may
be maintained by using a physical, electronic, or digitally-imaged
recordkeeping system, or a combination thereof. The records must be
accurate, complete, current, legible, and readily accessible and sortable.
(2) Location. A mortgage company must ensure the records
required by this section (or true and correct copies thereof) are
maintained at or are otherwise readily accessible from either the
main office of the mortgage company or the location the mortgage company
has designated in its MU1 filing under "Books and Records Information"
in NMLS. (For purposes of this section "main office" has
the meaning assigned by §80.206 of this title (relating to Office
Locations; Remote Work.)
(3) Production of Records; Disciplinary Action. All
records required by this section must be maintained in good order
and produced for the Commissioner or the Commissioner's designee upon
request. Failure to produce records upon request after a reasonable
time for compliance may result in disciplinary action against the
mortgage company, including, but not limited to, suspension or revocation
of the mortgage company's license.
(4) Retention Period. All records required by this
section must be maintained for 3 years or such longer period as may
be required by other applicable law.
(5) Conflicting Law. If the requirements of other applicable
law governing recordkeeping by the mortgage company differ from the
requirements of this section, such other applicable law prevails only
to the extent this section conflicts with the requirements of this
section.
(b) Required Records. A mortgage company is required
to maintain the following items:
(1) Mortgage Transaction Log. A mortgage transaction
log, maintained on a current basis (which means all entries must be
made within no more than 7 days from the date on which the matters
they relate to occurred), setting forth, at a minimum:
(A) the name and contact information of each mortgage
applicant;
(B) the date of the initial loan application;
(C) the full name of the originator who took the initial
loan application, and his or her NMLS identification number;
(D) a description of the purpose for the loan (e.g.,
purchase, refinance, construction, home equity, home improvement,
land lot loan, wrap mortgage loan, etc.);
(E) a description of the owner's or prospective owner's
intended occupancy of the real estate secured or designed to be secured
by the loan (e.g., primary residence (including real estate (land
lot) or a dwelling not suitable for occupancy at the time the loan
is consummated but that the owner intends to occupy as their primary
residence after consummation of the loan), secondary residence, or
investment property (no intent to occupy as their residence));
(F) the lien type (e.g., first lien, second lien, or
wrap mortgage);
(G) a description of the current status or disposition
of the loan application (e.g., in-process, withdrawn, closed, or denied);
and
(H) if the loan is closed, the identity of the person
who initially funded and/or acquired the loan;
(2) Residential Mortgage Loan File. For each residential
mortgage loan transaction or prospective residential mortgage loan
transaction, a residential mortgage loan file containing, at a minimum:
(A) All Transactions. For all transactions, the following
records:
(i) the initial and any final loan application (including
any attachments, supplements, or addendum thereto), signed and dated
by each mortgage applicant and the sponsored originator, and any other
written or recorded information used in evaluating the application,
as required by Regulation B, 12 C.F.R. §1002.4(c);
(ii) the initial and any revised good faith estimate
(Regulation X, 12 C.F.R. §1024.7), integrated loan estimate disclosure
(Regulation Z, 12 C.F.R. §1026.37), or similar, provided to the
mortgage applicant;
(iii) the final settlement statement (Regulation X,
12 C.F.R §1024.8), closing statement, or integrated closing disclosure
(Regulation Z, 12 C.F.R. §1026.19(f) and §1026.38);
(iv) the disclosure statement required by Finance Code §156.004
and §80.200(a) of this title (relating to Required Disclosures),
signed and dated by each mortgage applicant and the sponsored originator;
(v) if provided to a mortgage applicant or prospective
mortgage applicant, the Conditional Pre-Qualification Letter, or similar,
as specified by Finance Code §156.105 and §80.201 of this
title (relating to Loan Status Forms);
(vi) if provided to a mortgage applicant or prospective
mortgage applicant, the Conditional Approval Letter, or similar, as
specified by Finance Code §156.105 and §80.201 of this title
(relating to Loan Status Forms);
(vii) each item of correspondence, all evidence of
any contractual agreement or understanding, and all notes and memoranda
of conversations or meetings with a mortgage applicant or any other
party in connection with the loan application or its ultimate disposition
(e.g., fee agreements, rate lock agreements, or similar documents);
(viii) if the loan is a "home loan" as defined
by Finance Code §343.001, the notice of penalties for making
a false or misleading written statement required by Finance Code §343.105,
signed at closing by each mortgage applicant;
(ix) if the transaction is a purchase money or wrap
mortgage loan transaction, the real estate sales contract or real
estate purchase agreement for the sale of the residential real estate;
(x) consumer reports or credit reports obtained in
connection with the loan or prospective loan, and if a fee is paid
by or imposed on the mortgage applicant for such consumer report or
credit report, invoices and proof of payment for the purchase of the
consumer report or credit report;
(xi) appraisal reports or written valuation reports
used to determine the value of the residential real estate secured
or designed to be secured by the loan, and if a fee is paid by or
imposed on the mortgage applicant for such appraisal report or written
valuation report, invoices and proof of payment for the appraisal
report or written valuation report;
(xii) invoices and proof of payment for any third party
fees paid by or imposed on the mortgage applicant;
(xiii) refund checks issued to the mortgage applicant;
(xiv) if applicable, the risk-based pricing notice
required by Regulation V, 12 C.F.R. §1022.72;
(xv) if applicable, invoices for independent loan processors
or underwriters;
(xvi) if the mortgage company or sponsored originator
acts in a dual capacity as the loan originator and real estate broker,
sales agent, or attorney in the transaction, the disclosure of multiple
roles in a consumer real estate transaction, signed and dated by each
mortgage applicant, as required by Finance Code §156.303(a)(13)
and §157.024(a)(10);
(xvii) the initial privacy notice required by Regulation
P, 12 C.F.R. §1016.4 or 16 C.F.R. §313.4;
(xviii) the mortgage applicant's written authorization
to receive electronic documents;
(xix) records reflecting compensation paid to employees
or independent contractors in connection with the transaction;
(xx) any other agreements, notices, disclosures, or
affidavits required by federal or state law in connection with the
transaction; and
(xxi) any written agreements or other records governing
the origination of the loan or prospective loan;
(B) Lender Transactions. For transactions where the
mortgage company acted as the lender, the following records:
(i) the promissory note, loan agreement, or repayment
agreement, signed by the borrower (mortgage applicant);
(ii) the recorded deed of trust, contract, security
deed, security instrument, or other lien transfer document, signed
by the borrower (mortgage applicant);
(iii) any verifications of income, employment, or deposits
obtained in connection with the loan;
Cont'd... |