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TITLE 7BANKING AND SECURITIES
PART 4DEPARTMENT OF SAVINGS AND MORTGAGE LENDING
CHAPTER 80RESIDENTIAL MORTGAGE LOAN COMPANIES
SUBCHAPTER CDUTIES AND RESPONSIBILITIES
RULE §80.204Books and Records

      (iv) if the borrower (mortgage applicant) uses the proceeds of the loan to pay off a non-homestead debt with the same lender, a written statement, signed by the mortgage applicant, indicating the proceeds of the home equity loan were voluntarily used to pay such debt (see Section 50(a)(6)(Q)(i));

      (v) notice of the right of rescission, as required by Section 50(a)(6)(Q)(viii) (as provided by §153.25 of this title (relating to Right of Rescission: Section 50(a)(6)(Q)(viii)), the notice of right of rescission required by TILA and Regulation Z fulfills this requirement);

      (vi) the written acknowledgement as to the fair market value of the homestead property, as required by Section 50(a)(6)(Q)(ix) and §153.26 of this title (relating to Acknowledgement of Fair Market Value: Section 50(a)(6)(Q)(ix)); and

      (vii) if the home equity loan is refinanced into a non-home equity loan, the Texas Notice Concerning Refinance of Existing Home Equity to Non-Home Equity Loan, as required by Section 50(f)(2)(D) and §153.45 of this title (relating to Refinance of an Equity Loan: Section 50(f));

    (G) Wrap Mortgage Loans. For wrap mortgage loan transactions subject to the requirements of Finance Code Chapter 159, the following records:

      (i) the disclosure statement required by Finance Code §159.101 and §78.101 of this title (relating to Required Disclosure), signed and dated by each mortgage applicant, and any foreign language disclosure statement required by Finance Code §159.102;

      (ii) the disclosure statement required by Tex. Prop. Code §5.016 provided to each existing lienholder (the disclosure statement required by Finance Code §159.101 and §78.101 of this title (relating to Required Disclosure) referenced in clause (i) of this subparagraph fulfills this requirement if it was provided to each existing lienholder); and

      (iii) documents evidencing that the wrap mortgage loan was closed by an attorney or a title company, as required by Finance Code §159.105;

    (H) Home Improvement Loans. For home improvement transactions (including repair, renovation, and new construction), the following records:

      (i) the mechanic's lien contract;

      (ii) documents evidencing the transfer of lien from the contractor to the lender;

      (iii) the residential construction contract;

      (iv) notice of the right of rescission required by Article XVI, Section 50(a)(5)(C), Texas Constitution (the notice of right of rescission required by TILA and Regulation Z fulfills this requirement); and

      (v) any other notice or disclosure required by Texas Property Code Chapter 53;

    (I) Reverse Mortgages. For reverse mortgage transactions, the following records:

      (i) the disclosure required by Article XVI, Section 50(k)(9), Texas Constitution;

      (ii) the certificate of counseling required by Article XVI, Section 50(k)(8), Texas Constitution;

      (iii) the servicing disclosure statement required by Regulation X, 12 C.F.R. §1024.33(a);

      (iv) the disclosures required by Regulation Z, 12 C.F.R. §1026.33(b); and

      (v) any other notice or disclosure required by federal or state law to originate a reverse mortgage;

  (3) General Business Records. General business records include:

    (A) all checkbooks, check registers, bank statements, deposit slips, withdrawal slips, and cancelled checks (or copies thereof) relating to residential mortgage loan origination business;

    (B) complete records (including invoices and supporting documentation) for all expenses and fees paid on behalf of a mortgage applicant, including a record of the date and amount of all such payments actually made by each mortgage applicant;

    (C) all federal tax withholding forms, reports of income for federal taxation, and evidence of payments to all mortgage company employees, independent contractors and all others compensated by the mortgage company in connection with residential mortgage loan origination business;

    (D) all written complaints or inquiries (or summaries of any verbal complaints or inquiries) along with any correspondence, notes, responses, and documentation relating thereto and the disposition thereof;

    (E) all contractual agreements or understandings with third parties in any way relating to a residential mortgage loan transaction including, but not limited to, any delegations of underwriting authority, any agreements for pricing of goods or services, investor contracts, or employment agreements;

    (F) all reports of audits, examinations, inspections, reviews, investigations, or similar, performed by any third party, including any regulatory or supervisory authorities;

    (G) all advertisements in the medium (e.g., recorded audio, video, Internet or social media site posting, or print) in which they were published or distributed; and

    (H) policies and procedures related to the origination of residential mortgage loans by the mortgage company and its sponsored originators, including, but not limited to:

      (i) identity theft prevention program (red flags rule; 16 C.F.R. §681.1(d));

      (ii) anti-money laundering program (31 C.F.R. §1029.210);

      (iii) information security program (16 C.F.R. §314.3(a));

      (iv) ability-to-repay underwriting policies, if any (Regulation Z, 12 C.F.R. §1026.43(c));

      (v) quality control policy, if any;

      (vi) compliance manual, if any; and

      (vii) personnel administration/employee policies, if any;

  (4) Other Records Required by Federal Law. A mortgage company must maintain such other books and records as may be required to evidence compliance with applicable federal laws and regulations, including, but not limited to:

    (A) the Fair Credit Reporting Act (15 U.S.C. §1681 et seq.) and Regulation V (12 C.F.R. §1022.1 et seq.);

    (B) the Gramm-Leach-Bliley Act (15 U.S.C. §6801 et seq.) and Regulation P (12 C.F.R. §1016.1 et seq.), and the regulations of the Federal Trade Commission (16 C.F.R. §313.1 et seq.);

    (C) the Secure and Fair Enforcement for Mortgage Licensing Act (12 U.S.C. §5101 et seq.) and Regulation H (12 C.F.R. §1008.1 et seq.); and

    (D) Regulation N (Mortgage Acts and Practices-Advertising (MAP Rule); 12 C.F.R. §1014.1 et seq.);

  (5) Other Records Designated by the Commissioner. A mortgage company must maintain such other books and records as the Commissioner or the Commissioner's designee may, from time to time, specify in writing;

  (6) Records Concerning Administrative Offices. A mortgage company must maintain a list reflecting any office constituting an "administrative office" of the mortgage company for purposes of §80.206 of this title (relating to Office Locations; Remote Work); and

  (7) Records Concerning Remote Work. A mortgage company must maintain records reflecting its compliance with the requirements for remote work, as provided by §80.206 of this title (relating to Office Locations; Remote Work).

(c) Records Retention After Terminating Operations. Within 10 days of termination operations, a mortgage company must provide the Department with written notice of where the records required by this section will be maintained for the prescribed period. If such records are transferred to another mortgage company licensed by the Department, the transferee must provide the Department with written notice within 10 days after receiving such records.


Source Note: The provisions of this §80.204 adopted to be effective May 14, 2022, 47 TexReg 2735

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