| (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;
Cont'd... |
