(a) The Commissioner, or the Commissioner's designee(s),
will conduct periodic examinations of an originator as the Commissioner
deems necessary.
(b) Notice of Examination. Except when the Department
determines that giving advance notice would impair the examination,
the Department will give the primary contact person of the mortgage
banker or mortgage company sponsoring the originator listed in NMLS
or a person designated by the primary contact person advance notice
of each examination. Such notice will be sent to the primary contact
person's or designated person's mailing address or email address of
record with NMLS and will specify the date on which the Department's
examiners are scheduled to begin the examination. Failure to actually
receive the notice will not be grounds for delay or postponement of
the examination. The notice will include a list of the documents and
records that must be produced or made available to facilitate the
examination.
(c) Examinations will be conducted to determine compliance
with Finance Code, Chapters 157 and 180, and this chapter, and will
specifically address whether:
(1) all persons conducting residential mortgage loan
origination activities are properly licensed and sponsored;
(2) all office locations are properly licensed or registered,
as provided by §80.206 (relating to Physical Office) and §81.206
of this title (relating to Office Locations; Remote Work);
(3) all required books and records are being maintained
in accordance with §80.204 of this title;
(4) legal and regulatory requirements applicable to
the originator and the mortgage banker or mortgage company sponsoring
the originator are being properly followed; and
(5) other matters as the Commissioner may deem necessary
or advisable to carry out the purposes of Finance Code, Chapters 157
and 180.
(d) The examiners will review a sample of residential
mortgage loan files identified by the examiners and randomly selected
from the originator's mortgage transaction log. The examiner may expand
the number of files to be reviewed if, in his or her discretion, conditions
warrant.
(e) The examiners may require an originator, at his
or her own cost, to make copies of loan files or such other books
and records as the examiners deem appropriate for the preparation
of or inclusion in the examination report.
(f) Confidentiality. The work papers, compilations,
findings, reports, summaries, and other materials, in whatever form,
relating to an examination conducted under this section, will be maintained
as confidential except as required or expressly permitted by law.
(g) Failure to Cooperate; Disciplinary Action. Failure
by an originator to cooperate with the examination or failure to grant
the examiners access to books, records, documents, operations, and
facilities may result in disciplinary action including, but not limited
to, imposition of an administrative penalty.
(h) Reimbursement for Costs. When the Department must
travel outside of Texas to conduct an examination of an originator
because the required records are maintained at a location outside
of Texas, the Department will require reimbursement for the actual
costs incurred by the Department in connection with such travel including,
but not limited to, transportation, lodging, meals, communications,
courier service and any other reasonably related costs.
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Source Note: The provisions of this §81.300 adopted to be effective July 5, 2012, 37 TexReg 4873; amended to be effective January 3, 2021, 46 TexReg 157; amended to be effective November 4, 2021, 46 TexReg 7389 |