| (a) Purpose. This section clarifies and establishes
requirements related to the Commissioner's authority to make inspections
of a wrap lender required to register as a residential mortgage loan
servicer under Finance Code Chapter 158, as provided by Finance Code §159.252.
(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 wrap lender
registrant 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) Scope. Examinations will be conducted to determine
compliance with Finance Code Chapter 159, and this chapter, and will
specifically address whether:
(1) all required books and records are being maintained
in accordance with §78.401 of this title (relating to Required
Books and Records by a Wrap Lender Registrant);
(2) all legal and regulatory requirements applicable
to the wrap lender registrant are being properly followed; and
(3) other matters as the Commissioner may deem necessary
or advisable to carry out the purposes of Finance Code Chapter 159.
(d) The examiners will review a sample of wrap mortgage
loan files identified by the examiners and randomly selected from
the wrap lender registrant's wrap mortgage servicing 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 a wrap lender registrant,
at its 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 permitted or required by law.
(g) Reimbursement for Costs. When the Department must
travel outside of Texas to conduct an examination of a wrap lender
registrant 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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