Colorado Regulatory Update

Colorado Regulatory Update

The Colorado Department of Regulatory Agencies, Division of Real Estate (“Division”), recently promulgated rules related to mortgage loan originator and mortgage company licensing, effective October 3, 2015.

 

4 CCR 725-3

 

“General Business Day” means a day on which the offices of the creditor are open to the public carrying on substantially all of the creditor’s business functions.

 

“Specific Business Day” means all calendar days except Sundays and federal holidays.

 

“Application” means the submission of a consumer’s financial information for the purposes of obtaining an extension of credit and consists of the submission of the following six pieces of information:

·        The consumer’s name;

·        The consumer’s income;

·        The consumer’s social security number to obtain a credit report;

·        The property address;

·        An estimate of the value of the property; and

·        The mortgage loan amount sought.

 

“TILA-RESPA Integrated Disclosure Rule” means the Consumer Financial Protection Bureau’s Integrated Mortgage Disclosures final rule, set forth in the Real Estate Settlement Procedures Act (Regulation X), and in the Truth in Lending Act (Regulation Z), effective October 3, 2015, incorporated by reference, and does not include any later amendments or editions of the final rule.  A certified copy of the TILA-RESPA Integrated Disclosure rule is readily available for public inspection at the offices of the Board of Mortgage Loan Originators at 1560 Broadway, Suite 925, Denver, Colorado.  The TILA-RESPA Integrated Disclosure rule may be examined at the internet website of the Consumer Financial Protection Bureau at www.consumerfinance.gov.  The Consumer Financial Protection Bureau may also be contacted at 1700 G Street, NW, Washington, D.C. 20552 or by telephone at (202) 435-7000.

 

“MLO Compensation Rule” means the Consumer Financial Protection Bureau’s Loan Originator Compensation rule set forth in the Truth in Lending Act (Regulation Z), effective January 10, 2014, incorporated by reference, and does not include any later amendments or editions of the final rule.  A certified copy of the MLO Compensation rule is readily available for public inspection at the offices of the Board of Mortgage Loan Originators at 1560 Broadway, Suite 925, Denver, Colorado.  The MLO Compensation rule may be examined at the internet website of the Consumer Financial Protection Bureau at www.consumerfinance.gov.  The Consumer Financial Protection Bureau may also be contacted at 1700 G Street, NW, Washington, D.C. 20552 or by telephone at (202)435-7000.

 

“Colorado Lock-in Disclosure” means the Colorado Lock-in Disclosure form created by the Colorado Board of Mortgage Loan Originators (“Board”).  This form is to be used for any loan application or transaction that is exempt from the TILA-RESPA Integrated Disclosure rule. This disclosure may be found on the Division’s website atwww.colorado.gov/pacific/dora/mortgage-loan-originator-industry-forms.  A mortgage loan originator may use an alternate form if the alternate form includes all information required on the Colorado Lock-in Disclosure form, as determined by the Board.

 

Required Fees, Cost and Lock-In Disclosure must be provided within three (3) business days after receipt of a loan application (previously within 3 business days after receipt of a loan application or any moneys from borrower).

 

Mortgage loan originators must fully comply with all provisions of, disclose all fees and costs required by, and utilize the appropriate forms specified in the TILA-RESPA Integrated Disclosure Rule.  Full compliance with the provisions of the TILA-RESPA Integrated Disclosure Rule satisfies the disclosure requirements of Colorado law.

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For any mortgage loan application or transaction that is exempt from the TILA-RESPA Integrated Disclosure Rule, mortgage loan originators must disclose the following:

·        The Truth-in-Lending Disclosure;

·        A form that itemizes the disclosure of all third-party fees and costs and must include a mortgage loan originator and borrower signature and dates in which the disclosure was completed and signed.  (information commonly found in the pre-2010 HUD Good Faith Estimate Disclosure form); and

·        The Colorado Lock-in Disclosure.

 

When applicable, the disclosures set forth above must be made within three business days after receipt of a loan application, entering into a lock-in agreement, or if the annual percentage rate increases more than 1/8 of one percentage point from an earlier disclosure.

 

Compensation disclosure requirements must be disclosed pursuant to the MLO Compensation Rule.  Full compliance with the provisions of the MLO Compensation Rule satisfies the disclosure requirements of Colorado law.

 

Individuals who originate a mortgage or act as a mortgage loan originator are required to keep records of the above required disclosures for a period of five years (previously four years).

 

Persons who originate a mortgage, offer to originate a mortgage, act as a mortgage loan originator, or offer to act as a mortgage loan originator must maintain the Colorado Dual Status Disclosure form for a period of five years (previously four years).