09.03.06.04

.04 Records.

A. Preservation of Records.

(1) A licensee shall preserve the records of a mortgage loan transaction in one of the following ways:

(a) Original books, accounts, and files;

(b) An approved electronic equivalent; or

(c) An approved microphotographic copy.

(2) Time Period.

(a) A lender shall retain records for 25 months after a loan is denied, repayment of the loan is made in full, or the loan is sold, whichever occurs first.

(b) A servicer shall retain records for 25 months after final payment is made or the loan is sold, whichever occurs first.

(c) If a licensee acts as a broker in a loan transaction, records of the transaction shall be retained for 25 months after the loan is made or denied.

(3) Records required to be retained shall be maintained separately from the records of any other business of the licensee or its employees.

(4) Notwithstanding §A(3) of this regulation, a licensee may commingle records of mortgage loans with records of other types of loans made, brokered, or held by the licensee, if the mortgage loans can be readily retrieved for an examination.

B. Content of Records.

(1) For each mortgage loan made or serviced by a licensee, a file shall be maintained which contains, at a minimum, the following:

(a) The date of the loan closing;

(b) The annual percentage rate of interest payable on the loan;

(c) Documentation of all charges and fees disbursed from the proceeds of the loan or collected directly from the borrower;

(d) Documentation of disbursements of loan proceeds to creditors of the borrower;

(e) Documentation of any broker's agreement signed by the borrower if a broker fee is paid from the loan proceeds at closing;

(f) The amount of any origination or discount fee;

(g) A notation of any applicable governmental loan program for each loan;

(h) An accurate payment history;

(i) The objective index used to determine the interest rate from time to time if the loan has an adjustable rate;

(j) If the loan was assigned by the licensee, the name of the assignee, and the date of the assignment;

(k) Any document which indicates whether the security interest is in first or second lien position at the time the loan is made;

(l) All required truth-in-lending disclosure documents;

(m) Records of all monies received from a borrower for fees to be paid to third parties for services in connection with the loan;

(n) Records indicating that the services were provided and the fees paid by the licensee to the third party;

(o) A record of dates on which a credit report, appraisal, and other services or items were ordered by the licensee;

(p) Any other document on which the licensee relied in underwriting the loan;

(q) Optional insurance:

(i) Insurance information regarding optional insurance coverage purchased by the borrower in connection with the loan, including the premium charged, the types of coverages, and written authorization from the borrower for each type of coverage;

(ii) This paragraph does not apply to hazard insurance on the property securing the loan; and

(r) Records of any foreclosure action begun by the licensee by filing an order to docket or a complaint to foreclose including, if applicable:

(i) The name and mortgage originator license number of the mortgage originator that originated the loan if that information is contained in the security instrument underlying the foreclosure or is otherwise known to the licensee; and

(ii) The name and mortgage lender license number of the mortgage lender that originated the loan.

(2) Notwithstanding §B(1) of this regulation, a licensee acting as a broker in connection with a particular transaction:

(a) Shall retain copies of all records listed in §B(1) of this regulation which the licensee obtains in the course of processing or underwriting a loan;

(b) Shall retain a copy of the broker agreement between the licensee and the borrower;

(c) Shall retain a record of the lender to whom the loan was brokered; and

(d) Is not responsible for retaining any record unless the licensee at some time is in physical possession of a copy of that record.

(3) A licensee acting as a servicer shall compile and submit to the Commissioner, on or before the 25th day of each month, a report on the form required by the Commissioner that contains the following information for the preceding month:

(a) The number of mortgage loans the licensee is servicing;

(b) The number of mortgage loans that the licensee is servicing that are in payment default and a breakdown of these mortgage loans by length of payment delinquency, including 30-day, 60-day, and 90-day and longer delinquencies;

(c) Information on loss mitigation activities undertaken including, but not limited to, the following:

(i) The number of workout arrangements entered into by the licensee in connection with mortgage loans;

(ii) A description of the types of workout arrangements, including mortgage loan modifications, and the percentage of each type of workout arrangement entered into;

(iii) The proactive steps taken by the licensee to identify borrowers at a heightened risk of default, such as those with impending interest rate resets, including, but not limited to, contacts with borrowers to assess their ability to repay their mortgage loan obligations;

(d) The number of foreclosure actions commenced in this State in connection with mortgage loans the licensee is servicing;

(e) Information regarding adjustable rate mortgage loans; and

(f) Any other information that the Commissioner may consider necessary, including geographic information regarding applicable mortgage loans.

(4) The Commissioner may:

(a) Publish for public review the report required under §B(3) of this regulation, or any information contained in the report, except personally identifying information regarding borrowers;

(b) Require that the information contained in the report be for a period other than the preceding month; and

(c) Require that the report be provided to the Commissioner on a date later than the 25th day of each month or terminate the reporting requirement for such length of time as the Commissioner may consider appropriate.

(5) Records retained for longer than the minimum time period shall be made available to the Commissioner upon the Commissioner's reasonable request.