(a) The Commissioner, or the Commissioner's designee(s),
will conduct periodic examinations of a mortgage company or sponsored
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
company 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, Chapter 156 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 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 (relating to Books and
Records);
(4) legal and regulatory requirements applicable to
the mortgage company and its originators are being properly followed;
and
(5) other matters as the Commissioner may deem necessary
or advisable to carry out the purposes of Finance Code, Chapter 156.
(d) The examiners will review a sample of residential
mortgage loan files identified by the examiners and randomly selected
from the mortgage company'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 a mortgage company, 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 required or expressly permitted by law.
(g) Failure to Cooperate; Disciplinary Action. Failure
of a mortgage company or a sponsored 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 a mortgage company
or a sponsored 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 §80.300 adopted to be effective July 5, 2012, 37 TexReg 4866; amended to be effective January 3, 2021, 46 TexReg 151; amended to be effective November 4, 2021, 46 TexReg 7384 |