DAR File No. 28497

Commerce, Real Estate

R162-204

Residential Mortgage Record Keeping Requirements

NOTICE OF PROPOSED RULE

DAR File No.: 28497
Filed: 02/08/2006, 12:26
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The reason for the change is to clarify that it is the entity licensee that has the obligation to maintain records, as opposed to each individual licensee maintaining his or her own files, and that it is the manager of that entity who has the obligation to produce the records to the Division of Real Estate when required.

Summary of the rule or change:

The rule is changed to state that a licensed entity is required to maintain records instead of each licensed person, and that it is the entity's principal lending manager who will be required to produce the records on behalf of the entity.

State statutory or constitutional authorization for this rule:

Section 61-2c-302 and Subsection 61-2c-103(3)(c)

Anticipated cost or savings to:

the state budget:

None--The state budget is not impacted by who within a licensed mortgage entity is required to keep the entity's records or to produce records on behalf of the entity.

local governments:

None--Local governments do not engage in the residential mortgage loan business regulated by the Division of Real Estate, and therefore, the rules on who keeps or who produces records of that business do not impact local governments.

other persons:

The only persons impacted by the rules on who keeps and who produces mortgage records are licensed mortgage officers and the licensed entities for which they work. Since entities are legally "persons," the rule as currently written could be interpreted to require both individual licensees and entities to keep records. By eliminating this duplication, individual licensees will be relieved of substantial costs.

Compliance costs for affected persons:

Most, if not all, licensed mortgage companies already maintain the records required by this rule. There would be compliance costs for any mortgage entity that does not already maintain files on its transactions. However, a much larger number of individual licensees will be relieved of their obligation to maintain files and the accompanying expense.

Comments by the department head on the fiscal impact the rule may have on businesses:

This rule filing clarifies that the record keeping requirements by licensees apply to licensed entities rather than individuals. A cost savings to the industry may result from this clarification, but that savings is difficult to estimate as it will depend on the number of licensed entities and individuals. Francine A. Giani, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Direct questions regarding this rule to:

Shelley Wismer at the above address, by phone at 801-530-6761, by FAX at 801-530-6749, or by Internet E-mail at swismer@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

03/31/2006

This rule may become effective on:

04/01/2006

Authorized by:

Derek Miller, Director

RULE TEXT

R162. Commerce, Real Estate.

R162-204. Residential Mortgage Record Keeping Requirements.

R162-204-1. Residential Mortgage Record Keeping Requirements.

204.1.1 Entity Requirements. An [person]entity licensed under the Utah Residential Mortgage Practices Act must maintain for the period set forth in Utah Code Section 61-2c-302 the following records:

(a) Application forms;

(b) Disclosure forms;

(c) Truth-in-Lending forms;

(d) Credit reports and the explanations therefor;

(e) Conversation logs;

(f) Verifications of employment, paycheck stubs, and tax returns;

(g) Proof of legal residency, if applicable;

(h) Appraisals, appraisal addenda, and records of communications between the appraiser and the registrant or lender;

(i) Underwriter denials;

(j) Loan approval; and

(k) All other records required by underwriters involved with the transaction.

204.1.2. Principal Lending Manager Requirements. The principal lending manager of an entity shall be responsible to make the records set forth in Section 204.1.1 available to the Division as provided in Section 61-2c-302(3).

KEY: residential mortgage loan origination

Date of Enactment or Last Substantive Amendment: [April 12, 2004]2006

Authorizing, and Implemented or Interpreted Law: 61-2c-302

ADDITIONAL INFORMATION

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For questions regarding the content or application of this rule, please contact Shelley Wismer at the above address, by phone at 801-530-6761, by FAX at 801-530-6749, or by Internet E-mail at swismer@utah.gov

For questions about the rulemaking process, please contact the Division of Administrative Rules (801-538-3764). Please Note: The Division of Administrative Rules is NOT able to answer questions about the content or application of these administrative rules.