6-946. Required accounting practices and
records; refundable deposits; periodic impoundment payments;
disclosure
A. Every mortgage banker shall keep and maintain at all times correct and complete
records clearly reflecting the financial condition of the business as prescribed by the
superintendent that will enable him to determine whether the licensee is conducting his
business in accordance with this article. If the mortgage banker operates two or more
licensed places of business in this state, after notifying the superintendent, he may
maintain the records at his principal place of business in this state, except that a
mortgage banker, with the approval of the superintendent, may maintain the records
outside of this state. A mortgage banker shall, for records kept outside of this state,
make the records available to the superintendent in this state not more than three
business days after demand and provide for the acceptance of collect calls or provide a
toll free telephone number to borrowers to obtain information from the records if the
licensed places of business in this state cannot readily provide the information
requested by the borrowers. Every mortgage banker shall maintain original documents, or
clearly legible copies, of all mortgage banking loan transactions and mortgage loan
transactions, unless the mortgage banking loan or mortgage loan is paid in full or the
mortgage banking loan or mortgage loan and its servicing are sold, for not fewer than two
years after the date of the mortgage banking loan closing or the date of the last
disbursement of monies by the licensee, whichever occurs last. With the approval of the
superintendent, a licensee that uses a computer or mechanical record keeping system is
not required to keep a written copy of the records if the licensee is able to generate
all information required by this section in a timely manner for examination or for other
purposes.
B. Every mortgage banker shall observe generally accepted accounting principles and
practices.
C. If a mortgage banker requires an advance or fee to be paid in connection with an
application for a mortgage banking loan or mortgage loan, there shall be a written
agreement. The parties shall sign the written agreement, and the agreement shall contain
terms pertaining to the payment of the fee or disposition of the advance or fee, whether
the loan is finally consummated or not, and the term for which the agreement is to remain
in force before return of the advance or fee for nonperformance can be
required. Advances or fees shall be immediately deposited in a trust account in a bank,
savings bank or savings and loan association that is fully insured by the federal deposit
insurance corporation or any successor agency and shall not be commingled with other
monies. The trust account shall designate the licensee as trustee and shall provide for
withdrawal of the monies without previous notice. Withdrawals shall only be disbursed
according to the terms of the agreement. A licensee who receives advances or fees shall
preserve and on request make available to the superintendent all deposits, withdrawal
receipts and statements of account rendered by the bank or savings and loan
association. The licensee shall further preserve all agreements between the parties
involved in the transaction and all contracts, agreements and instructions to or with the
depository and shall keep an accurate accounting of each separate bank account in which
the trust funds have been deposited. If the loan is declined by or on behalf of the
lender or cancelled by the applicant, all documents provided by or at the expense of the
applicant, including any appraisal, are the property of the applicant. At the
applicant's discretion, said documents shall be returned or transferred to any financial
institution or enterprise so designated without additional consideration except for fees
for which the applicant has previously contracted, provided that any such document is not
prohibited by law from being transferred or returned.
D. If periodic payments are to be collected from the mortgagor to provide for
payments by the mortgagee of taxes, assessments, insurance premiums, ground rents or
other current charges against the real estate security, the estimated payment amount
stated to the mortgagor by the mortgage banker shall be such that the total of these
payments collected for each category during the tax or other period will approximate the
actual tax or other payment when due. All such periodic payments of taxes, assessments,
insurance premiums, ground rents and other current charges shall be accounted for
annually to the borrower and, to the extent monies have been collected for payment, shall
be paid promptly by the mortgage banker.
E. Before a mortgage banking loan closing on residential real property designed
principally for the occupancy of from one to four families, a licensee shall fully
comply, to the extent they apply, with the real estate lending disclosure requirements of
title I of the consumer credit protection act (15 United States Code sections 1601
through 1666j), the real estate settlement procedures act (12 United States Code sections
2601 through 2617) and the regulations promulgated under those acts.
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