| (a) Maintenance of Records, Generally. In order to
ensure a mortgage banker or an originator will have all records necessary
to facilitate an inspection (including an examination) of an originator,
enable the Commissioner or the Commissioner's designee to investigate
complaints against a mortgage banker or an originator, and otherwise
ensure compliance with the requirements of Finance Code Chapters 157
and 180, and this chapter, a mortgage banker and an originator 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 banker 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 banker or the location the mortgage banker
has designated in its MU1 filing under "Books and Records Information"
in NMLS. An originator must ensure the records required by this section
(or true and correct copies thereof) are maintained at or are otherwise
readily accessible from the main office of the mortgage banker or
the mortgage company sponsoring the originator, or the location the
mortgage banker or 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 §81.206 of
this title (relating to Office Locations; Remote Work), with respect
to a mortgage banker, and §80.206 of this title (relating to
Office Locations; Remote Work), with respect to a mortgage company.)
(3) Production of Records; Disciplinary Action or Violation.
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 by an originator to produce records upon request
after a reasonable time for compliance may result in disciplinary
action against the originator, including, but not limited to, suspension
or revocation of the originator's license. Failure by a mortgage banker
to produce records upon request after a reasonable time for compliance
in response to a complaint investigation conducted by the Department
may be treated as a failure by the mortgage banker to provide evidence
in violation of the requirements of Finance Code §157.0022(b).
(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 banker or originator 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.
(6) Compliance by the Mortgage Banker or Mortgage Company
on Behalf of the Originator. An originator fulfills the requirements
of subsection (b) of this section if his or her sponsoring mortgage
banker or mortgage company maintains the required books and records
on behalf of the originator.
(b) Required Records of an Originator. An originator
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) for an originator sponsored by a mortgage banker,
the disclosure statement required by Finance Code §157.0021 and §81.200(a)
of this title (relating to Required Disclosures); or, for an originator
sponsored by a mortgage company, 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 §157.02012 and §81.201 of this
title (relating to Loan Status Forms), with respect to an originator
sponsored by a mortgage banker, or Finance Code §156.105 and §80.201
of this title (relating to Loan Status Forms), with respect to an
originator sponsored by a mortgage company;
(vi) if provided to a mortgage applicant or prospective
mortgage applicant, the Conditional Approval Letter, or similar, as
specified by Finance Code §157.02012 and §81.201 of this
title (relating to Loan Status Forms), with respect to an originator
sponsored by a mortgage banker, or Finance Code §156.105 and §80.201
of this title (relating to Loan Status Forms), with respect to an
originator sponsored by a mortgage company;
(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, invoices/receipts 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 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 originator or the mortgage banker or mortgage
company sponsoring the 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 §157.024(a)(10) and §156.303(a)(13);
(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 banker or mortgage company sponsoring the originator 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;
(iv) copies of any title insurance policies with endorsements
or title search reports obtained in connection with the loan, and
receipts/invoices for the title insurance policy or title search report;
and
(v) if applicable, the flood determination certificate
obtained in connection with the loan, and if a fee is paid by or imposed
on the mortgage applicant for such flood certificate, invoices and
proof of payment for the flood determination certificate;
(C) Truth in Lending Act (TILA). For transactions that
are subject to the requirements of TILA (15 U.S.C. §1601 et seq.)
and Regulation Z (12 C.F.R. §1026.1 et seq.), the following records:
(i) the initial Truth-in-Lending statement for home
equity lines of credit and reverse mortgage transactions required
by Regulation Z, 12 C.F.R. §1026.19;
(ii) if the transaction is an adjustable rate mortgage
transaction, the adjustable rate mortgage program disclosures;
(iii) records relating to the mortgage applicant's
ability to repay the loan, as required by Regulation Z, 12 C.F.R. §1026.43(c);
(iv) if the mortgage applicant is permitted to shop
for a settlement service, the written list of providers required by
Regulation Z, 12 C.F.R. §1026.19(e)(1)(vi)(C);
(v) the notice of intent to proceed with the transaction
required by Regulation Z, 12 C.F.R. §1026.19(e)(2)(i)(A);
(vi) if applicable, records related to a changed circumstance
required by Regulation Z, 12 C.F.R. §1026.19(e)(3)(iv);
(vii) the notice of right to rescission required by
Regulation Z, 12 C.F.R. §1026.15 or §1026.23;
(viii) for high-cost mortgage loans, the disclosures
required by Regulation Z, 12 C.F.R. §1026.32(c);
(ix) for high-cost mortgage loans, the certification
of counseling required by Regulation Z, 12 C.F.R. §1026.34(a)(5)(i);
and
(x) any other notice or disclosure required by TILA
or Regulation Z;
(D) Real Estate Settlement Procedures Act (RESPA).
For transactions that are subject to the requirements of RESPA (12
U.S.C. §2601 et seq.) and Regulation X (12 C.F.R. §1024.1
et seq.), the following records:
(i) records reflecting delivery of the special information
booklet required by Regulation X, 12 C.F.R. §1024.6;
(ii) any affiliated business arrangement disclosure
statement provided to the mortgage applicant in accordance with Regulation
X, 12 C.F.R. §1024.15;
(iii) records reflecting delivery of the list of homeownership
counseling organizations required by Regulation X, 12 C.F.R. §1024.20;
and
Cont'd... |
