The Finance Commission of Texas (“the Commission”) recently adopted regulations effective January 5, 2012 governing residential mortgage loan servicers under the Residential Mortgage Loan Servicer Registration Act (the “Act”).
7 TEXAS ADMINISTRATIVE CODE SECTIONS 79.1-79.5, 79.20, 79.30, 79.40, 79.50
“Department” means the Department of Savings and Mortgage Lending.
“Nationwide Mortgage Licensing System and Registry” (“NMLSR”) means a mortgage licensing system developed and maintained by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators for the licensing and registration of state residential mortgage loan originators.
“Commissioner” means the Savings and Mortgage Lending Commissioner.
“Commissioner’s designee” means an employee of the Department performing his or her assigned duties of such other person as the Commissioner may designate in writing. A Commissioner’s designee is deemed to be the Commissioner’s authorized “personnel or representative.”
“Person” means any individual, corporation, company, limited liability company, partnership, or association.
“Registrant” means a person registered under the Act.
Residential mortgage loan servicer registrants must provide borrowers with the following disclosure in all correspondence provided to borrowers:
“COMPLAINTS REGARDING THE SERVICING OF YOUR MORTGAGE SHOULD BE SENT TO THE DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 North Lamar, Suite 201, Austin, Texas 78705. A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT (877) 276-5550.”
This disclosure is available on the Department’s website at: http://www.sml.texas.gov/ResidentialMortgageLoanServicer/documents/rmls_news_information/rmls_required_disclosure_statement.pdf
A registrant must provide to the borrower of each residential mortgage loan the disclosure not later than the 30th day after the registrant begins servicing the loan.
Registration
Applications for residential mortgage loan servicer registrations must be submitted through the NMLSR and must be on the prescribed application form. A registration, notice, or any other filing with the Department will be deemed submitted only if it is complete. A filing is complete only if all required supporting documentation is included and only if all required fees have been received by the Department. If an applicant fails to provide the Department any information or supplemental documentation within 30 days from the date of request, the application may be deemed withdrawn.
All registrations issued are valid for a term of not more than one year from the date of issuance and expire on December 31st. The registration fee of a residential mortgage loan servicer will be established by the Commissioner. The amount of the fees may be modified upon not less than 30 days advance notice posted on the Department’s website. The fees are nonrefundable and nontransferable. The registrant must notify the Department of any change to any information provided in the registration application within 30 days after the date of the information change.
Bonds submitted for approval of a residential mortgage loan servicer registration application must be on the prescribed form and for the applicable amount. Bonds should be payable to the Commissioner. Any recovery made against a bond by the Commissioner requires a new bond to be filed within 10 days. The name of the principal insured on the bond must exactly match the name as it will appear on the registration information as approved by the Texas Secretary of State. The surety seal and an attached power of attorney must accompany the bond when submitted to the Department.
A registration may be renewed upon the submission of a completed application for renewal through the NMLSR together with the payment of the application renewal fee and determination that that applicant continues to meet the minimum requirements for registration issuance.
Complaints and Investigations
Upon receipt of a signed, written complaint from a person setting forth known, suspected, or asserted facts relating to acts or omissions of a person required to be registered, the Commissioner or the Commissioner’s designee will:
- Make an initial determination whether the complaint sets forth reasonable cause to warrant an investigation;
- If it has been determined that the complaint warrants an investigation, advise the residential mortgage loan servicer who is the subject of the complaint by written notice to the authorized office specified on that person’s registration that a complaint has been filed;
- If it is determined that a complaint does not warrant investigation, advise the complainant and close the file, advising the complainant of the right to bring forth additional facts or information to have the initiation of an investigation reconsidered;
- If an investigation is to be conducted, advise the party who is the subject of the complaint that an investigation will be conducted and conduct the investigation as is deemed appropriate in light of all the relevant facts and circumstances then known. The investigation may include any or all of the following:
- Review of documentary evidence;
- Interviews with complainants, registrants, and third parties;
- Obtaining reports, advice, and other comments and assistance of other state and/or federal regulatory, enforcement, or oversight bodies; and
- Other lawful investigative techniques as the Commissioner reasonably deems necessary or appropriate, including, but not limited to, requesting that complainants and/or other parties made the subject of complaints provide explanatory, clarifying, or supplemental information.
If the Department requests reports or other information of the registrant and the registrant does not respond as required, a $150 penalty may be assessed against the registrant. A complaint investigation fee may be assessed against a person required to be registered after the Department opens a fifth complaint or expends 12 hours of investigative work on an annual basis from September 1st to August 31st. The amount of the complaint investigation fee assessed will be at the discretion of the Commissioner and may be set at an amount not to exceed $975 per complaint.
The Commissioner may conduct a Departmental investigation if the Commissioner, after due consideration of the circumstances, determines that the investigation is necessary to prevent immediate harm and to carry out the Commissioner’s purposes.
The Hearings Officer for the Commission is designated as the hearings officer. All hearings, unless specifically authorized by the Commissioner, must be conducted in Austin, Travis County, Texas.
In order to provide clarification on the implementation of the Act, the Commissioner may publish written interpretations of the Act and these regulations.