Chapter 1301:8-3 Second Mortgage Loan Act

1301:8-3-03 Definitions.

(A) "Assets," as used in division (B)(2) of section 1321.53 of the Revised Code, shall mean properties of value that are owned by the applicant or registrant. Therefore, assets include cash on hand and in depository institutions, readily marketable securities, accounts receivable (less allowances for uncollectible accounts) and real estate (less liens and depreciation). However, the term "assets" as used in this section shall not include: office premises, leasehold improvements, office furniture, fixtures, and equipment, or intangible assets.

(B) "Net worth," as used in division (B)(1) of section 1321.53 of the Revised Code shall mean the amount by which the business assets exceed the business liabilities.

(C) "Direct mail," as used in this chapter, shall mean a loan arranged via an application through the mail or internet where the loan proceeds are delivered through the mail or electronic transmission to the benefit of a borrower. A loan is not made by "direct mail" if it is facilitated by face to face, personal contact in this state between the lender, lender's employee or agent, or lender's attorney and the borrower or borrower's agent. For purposes of this rule, a bona fide third party title agency, notary, insured depository, or attorney which is suggested as part of a list of three or more recommended but not required closing providers, shall not be considered an agent of the lender. Nothing in this rule shall prohibit a registrant from creating a list of disapproved vendors, nor shall persons selected by the borrower only to witness the borrower's signature in compliance with a list be considered an agent of the lender.

(D) "Collecting" as used in division (A)(1)(b) of section 1321.52 of the Revised Code and "collected" as used in paragraph (E) of rule 1301:8-3-12 of the Administrative Code shall mean the servicing of a loan or receipt of payments from a borrower for a loan made pursuant to sections 1321.51 to 1321.60 of the Revised Code.

(E) The term "condition of the loan" as used in division (H)(2) of section 1321.57 of the Revised Code shall mean that approval or denial of a borrower's loan application shall not be based on the borrower's acceptance of any other transactions made in conjunction with the loan. This restriction shall not apply to insurance placed by registrants to insure loan collateral as provided for by division (F) of section 1321.57 of the Revised Code.

(F) The phrase "refuse to provide information" as used in division (C) of section 1321.59 of the Revised Code shall mean the failure of a registrant to provide a borrower with information regarding the amount required to pay the borrower's loan in full within five business days after the receipt of a written request from a borrower or the borrower's designee.

(G) The term "prepayment penalty" as used in sections 1321.51 to 1321.60 of the Revised Code and this chapter shall mean a charge incurred for early payment of a loan in full prior to the loan's repayment due date.

(H) "Affiliation" or "affiliated with" as used in sections 1321.51 to 1321.60 of the Revised Code and this chapter shall mean directly or indirectly through one or more intermediaries controlled by or under common control with another person or enterprise. "Control" shall mean the authority to direct or cause the direction of the management and policies through ownership, by contract, or otherwise.

(I) "Final entry on a loan," as used in this chapter, means, as to that lender, the latter of the date the loan is:

(1) Paid in full,

(2) Deemed uncollectible,

(3) Assigned to another registrant or exempt entity and all records are transferred to the new lender, or

(4) Discharged or otherwise settled by an order terminating litigation governing the loan transaction.

(J) The phrase "settlement or closing costs" as used in division (H)(1) of section 1321.57 of the Revised Code shall mean fees for settlement or closing services provided by others that are passed on to the borrower without a premium and are not included as a finance change under the terms of the Truth in Lending Act, 15 U.S.C. 1601 et seq. as of January 1,2008. Fees paid to any affiliate for underwriting or processing as a settlement or closing costs, as well as for use of any office for closing, shall be deemed made for the purpose of evasion of section 1321.57 of the Revised Code. Fees paid to any broker for settlement or closing costs will be counted as compensation under division (D) of section 1321.59 of the Revised Code. Nothing herein limits the division from determining other settlement or closing costs are assessed for purpose of evasion of section 1321.57 of the Revised Code, or permits a settlement or closing cost otherwise prohibited or limited by law or rule.

Replaces: 1301:8-3-03

Effective: 07/01/2008
R.C. 119.032 review dates: 11/15/2012
Promulgated Under: 119.03
Statutory Authority: 1321.54(A)
Rule Amplifies: 1321.51 to 1321.60
Prior Effective Dates: 2-1-86, 4-1-90, 11/13/97

1301:8-3-04 Recordkeeping requirements.

(A) All records required to be maintained by this rule shall be kept current and shall be available at all times during normal business hours for review by the division of financial institutions. Records shall be legible and maintained in a type size that is clearly readable without magnification, and in conformity with any specific typeface or font size that may be required by state or federal law. Except where otherwise provided by federal or state law, records shall be maintained in English. When records are allowed to be in a language other than English, the registrant, at its expense, shall be responsible for providing the division with a full and accurate translation. For purposes of recordkeeping, "current" means within thirty business days from the date of the occurrence of the event required to be recorded. Pursuant to section 1321.55 of the Revised Code, each registrant shall maintain the following records for all loans made pursuant to sections 1321.51 to 1321.60 of the Revised Code for at least two years after making the final entry on the records at either the registered premises or any other location approved in advance in writing by the superintendent of financial institutions.

(1) Copies of loan statements shall be maintained in one file, in chronological order, and kept available for examination. Loan statements shall disclose the following information:

(a) Principal borrower's name;

(b) Account number;

(c) Date of loan;

(d) An itemization of the charges for all credit related insurances and real estate related fees provided for by divisions (E) and (H) of section 1321.57 of the Revised Code; and

(e) Type of security.

(2) A ledger record shall be kept for each outstanding loan and loan paid in full within the last two years. The ledger record shall disclose the following information if applicable:

(a) Account number;

(b) Principle borrower's name and residence address;

(c) Date of loan;

(d) Date finance charges being to accrue;

(e) Contractual rate of loan interest;

(f) Federal annual percentage rate;

(g) Loan origination charge;

(h) Original principal amount;

(i) Scheduled or precomputed interest;

(j) Total of payments;

(k) Type of security;

(l) Terms of repayment;

(m) Types and amounts of credit-related insurance;

(n) Unit default charge;

(o) A chronological entry of all debits, credits, payments and charges received, assessed or disbursed in connection with the loan, recorded thereon in an identifiable manner in order to show the actual date of receipt, assessment or disbursement and the balance due on the account;

(p) The amount of points charged to borrowers; and

(q) The amount of prepayment penalties charged to borrowers.

(3) All loan agreements, mortgages, notes, disclosure forms, closing statements, security agreements and other documents signed by the obligors and taken in connection with loans made, shall be identified by the loan number and maintained in a separate file for each borrower.

(4) The cash receipt and disbursement record, which shall include the account number and name of principal borrowers, all transactions involving either the receipt or disbursement of money on the account of borrowers, and the actual date of any the transaction, shall be made available to the division of financial institutions upon request.

(5) An alphabetical index of all borrowers, comakers, guarantors and other obligors identified by account number shall be maintained with respect to all persons obligated on loans made under the provisions of sections 1321.51 to 1321.60 of the Revised Code.

(6) A record of all loans in litigation shall be maintained in a litigation record. The litigation record shall be maintained for at least two years after the final entry has been made on the loan, be kept current, and include the following information:

(a) Loan number and name of principal borrower;

(b) Date litigation proceedings were initiated, the date and amount of the judgment and the judgment rate of interest;

(c) All original litigation records and documents, including pleadings, court orders, judgments and documentation of all court costs paid by the borrower to or through the registrant, or copies thereof shall be maintained in the file of original papers; and

(d) In cases of garnishment or attachment all notices served on employers or copies thereof and the amounts collected shall be maintained in the file of original loan papers.

(7) A record of all loans in repossession and foreclosure shall be maintained in a repossession and foreclosure record. The repossession and foreclosure record shall be maintained for at least two years after the final entry has been made on the loan, be kept current, and include the following information:

(a) Loan number and name of principal borrower;

(b) Type of security foreclosed, attached, replevied, repossessed or surrendered;

(c) Date of repossession or foreclosure, date of sale of the security, the gross amount received from the sale of the security, expenses deducted from the sale of the security and the amount of money applied to the outstanding loan balance;

(d) All original repossession and foreclosure legal documents and other records, including bills for all expenses or copies thereof shall be maintained in the file of original loan papers; and

(e) In instances where the security is offered for private sale, there must be in the borrower's file not less than three bona fide written bids or appraisals in order to establish that the terms of sale were fair to the borrower. Where the security is offered for private or public sale, the sale must be consummated in compliance with the provisions of sections 1309.610 , 1309.611 , 1309.615 , 1309.617 , and 1309.624 of the Revised Code.

(8) A credit life claims record shall be maintained for all loans upon which a credit life claim has been paid by the insurer. The credit life claims record shall be maintained for at least two years after the final entry has been made on the loan, be kept current, and include the following information:

(a) Loan number and name of principal borrower;

(b) Date of death and certified copy of the death certificate or a copy thereof;

(c) Name and address of second beneficiary, if any; and

(d) Copies of all checks received or paid pertaining to a credit life claim.

(9) Histories of nonpublished indices used to establish interest rates for variable rate loans shall be maintained for two years from date of usage, and shall be available for review by the division of financial institutions.

(10) Each registrant conducting business as a lender shall maintain a log for business conducted with brokers. This log shall be kept in chronological order and shall contain the following information:

(a) Amounts of fees paid to brokers;

(b) Names and addresses of brokers; and

(c) Dates of transactions with brokers.

(B) A registrant may, for any business purpose, retain a document, paper, or other instrument or record by use of a process to record, copy, photograph, or store a representation of the original document, paper, or other instrument or record, if all of the following apply:

(1) The process correctly and accurately copies or reproduces, or provides a means for correctly and accurately copying or reproducing, the original document, paper, or other instrument or record with regard to both its substance and appearance, except the copy or reproduction need not reflect the original paper or other medium, size, or color unless the medium, size or color is necessary to establish the authenticity of the original.

(2) The process does not permit the recording, copy, photographic image, or stored representation of the original document, paper, or other instrument or record to be altered or manipulated.

(3) Any medium the process uses to record, copy, photograph, or store a representation of the original document, paper, or other instrument or record is a durable medium for retaining and reproducing records.

(4) The process is used in the registrant's regular course of business.

(5) The superintendent has given written authorization in advance to the registrant to use of the process.

(6) Written printouts or hard copies of the required data are readily available.

(C) Due bills, receipts, invoices or other evidence shall be maintained in the file of original loan papers for any amount in excess of twenty dollars paid by the borrower to or through the registrant for any dishonored check, negotiable order of withdrawal, share draft or any other negotiable instrument.

(D) Receipts, invoices, due bills or other evidence must be maintained in the file of original loan papers for any amount paid for the borrower and included in the principal amount of the loan which represents payment for title examination, abstract of title, title insurance, surveys, appraisal fees or preparation of the mortgage, settlement statement or other documents prepared in connection with a mortgage loan.

(E) In order to reduce the risk of consumer fraud and related harms, including identity theft, registrants shall be required to comply with the provisions of the "Fair and Accurate Credit Transactions Act of 2003," 117 Stat. 1952, 15 U.S.C. 1681w as in effect on January 1, 2008, the "Gramm Leach Bliley Act," 113 Stat. 1138 (1999), 15 U.S.C. 6801 as in effect on January 1, 2008, and the rules promulgated pursuant to those federal acts, including 16 C.F.R. 682, as in effect January 1, 2008, pertaining to the maintenance, security, and disposal of consumer information and records.

(F) Before ceasing to conduct or discontinuing business as a registrant, the registrant shall arrange for and be responsible for the preservation of the books and records required to be maintained and preserved under this rule for the remainder of the period specified in this rule, and shall notify the division in writing of the exact address where the books and records will be maintained during the required period.

(G) The division of financial institutions may suspend, revoke, or refuse to renew any registration issued by the division or bring any other authorized administrative enforcement action in accordance with section 1321.54 of the Revised Code against any person for failure to maintain records in accordance with section 1321.55 of the Revised Code or this rule.

Replaces: 1301:8-3-15

Effective: 07/01/2008
R.C. 119.032 review dates: 02/08/2008 and 11/15/2012
Promulgated Under: 119.03
Statutory Authority: 1321.54(A)
Rule Amplifies: 1321.55
Prior Effective Dates: 2/1/1986, 4/1/1990, 11/13/1997, 3/18/1999

1301:8-3-05 Advertising.

(A) The following advertising requirements shall be observed by all registrants:

(1) The words "advertisement" and "advertising," as used in section 1321.51 to 1321.60 of the Revised Code and this chapter, shall include all material printed, published, displayed, distributed or broadcast for the purpose of obtaining applications for loans. Materials displayed or distributed over the internet, telephone, facsimile, or other electronic transmission for the purposes of obtaining applications for loans are considered advertising for purposes of this rule.

(2) A registrant shall not advertise that loans will be made at any place other than that named in the certificate of registration. Every advertisement shall state and clearly indicate the identity of the registrant and shall do so in such a manner that prevents confusion with the name of any other unrelated registrant. Registrants shall be identified by means of tradenames, service marks or business names which are filed with the division of financial institutions and Ohio secretary of state.

(3) A registrant shall not use loan advertisements which provide only telephone or facsimile numbers or newspaper box addresses and do not clearly indicate the identity of the registrant.

(4) A registrant shall not advertise that loans shall be made within a specified time after the loan application is received, unless it is the general practice of the registrant to make loans within the specified time.

(5) A registrant shall not advertise special terms, reduced rates, reduced payments, or any other special feature of a loan within a specified limited time, unless the advertisement clearly states any limitations that apply to the offer.

(6) A registrant shall not advertise by the use of unqualified superlatives, including but not limited to "lowest rates," "lowest costs," "lowest payment plan," or "cheapest loans," or by making offers which cannot be reasonably fulfilled.

(7) A registrant shall not advertise the words "new" or "reduced," or words of similar import, in connection with rates, costs, payments or plans, for more than ninety days after the rates, costs, payments or plans shall have become effective.

(8) Any registrant specifying in any advertisement charges on loans in dollars shall also state the length of time required to repay the loans as well as the method of repayment, and shall, when the rate of interest is stated, do so in a manner to prevent misunderstanding.

(9) Any registrant advertising flat or average payments on loans which include principal and interest shall specify the number and frequency of payments required to repay the loans. Whenever the amounts of periodic payments are advertised, the amounts must include all interest to the borrower, as well as principal. The principal payments alone may be shown separately provided the interest charges are also clearly stated with equal prominence.

(10) A registrant shall not advertise rebates, rates, or charges below the maximum lawful rate of interest which are conditioned upon prompt payment unless such the condition is clearly indicated.

(11) A registrant shall not advertise:

(a) Waiver of payments in the event of sickness or disability or other contingency, without advertising that the interest and other charges, if assessed, continue during the waiver period.

(b) That the first payment on any loan may be made more than thirty days after the date of loan closing, without advertising that the interest and other charges, if assessed, will accrue from the date of disbursement of the loan funds until the first payment is due.

(12) A registrant shall not advertise for loans for illegal purposes.

(13) A registrant shall not advertise specific amounts of loans to be made on designated makes and models of automobiles unless it is also stated that the amounts so specified are only the average loan values and are subject to the actual condition of such the automobiles.

(14) A registrant shall not give, or advertise an offer to give any article or merchandise or anything of value, other than a reduction in interest, as an inducement to a borrower to make a loan.

(15) A registrant shall not advertise the availability of credit-related insurance without disclosing the charge, if any, for the insurance.

(B) Every registrant shall maintain in each registered office or in a central location, approved by the superintendent of financial institutions, a records file of all advertising, including newspaper, magazine, direct mailing facsimile advertising and solicitations, roadside advertising, internet and scripts of radio and television commercials, for a period of two years from the date disseminated. A record or other file shall be readily available for inspection by the division of financial institutions at all times. Every registrant shall notify the division of financial institutions in writing of the location of the record or file. All registrants shall, upon the request of the superintendent, provide to the division of financial institutions any printed or electronic advertising done regarding any business conducted under sections 1321.51 to 1321.60 of the Revised Code. Text of advertising shall be maintained by the registrant for two years from the date of usage.

Effective: 07/01/2008
R.C. 119.032 review dates: 02/08/2008 and 11/15/2012
Promulgated Under: 119.03
Statutory Authority: 1321.54(A)
Rule Amplifies: 1321.60
Prior Effective Dates: 2/1/1996, 4/1/1990, 11/13/1997

1301:8-3-06 Out-of-state examination.

In the event books, records, data and documents of a registrant are located outside Ohio, the registrant shall be required, upon the request of the superintendent, to pay in advance the estimated costs of the examination of the registrant outside the state of Ohio, including the proportionate cost of the salaries of division of financial institutions employees who conduct the examination. The estimated costs of an out-of-state examination, as determined by the superintendent, shall be deposited with the division of financial institutions upon demand. After the actual costs of the out-of-state examination have been determined, any funds in the deposit account in excess of costs as itemized by the division of financial institutions shall be returned to the registrant.

Effective: 07/01/2008
R.C. 119.032 review dates: 02/08/2008 and 11/15/2012
Promulgated Under: 119.03
Statutory Authority: 1321.54(A)
Rule Amplifies: 1321.55
Prior Effective Dates: 2/1/1986, 4/1/1990, 11/13/1997

1301:8-3-07 General provisions for registrants.

(A) Except in the cases of loans made by direct mail as defined in this chapter, loans where the additional signature of a spouse, co-signor or guarantor is necessary or loans where one or more of the obligors is ill or disabled, no loan agreements, security agreements or other documents or papers involved with the making or renewing of a loan shall be signed by any obligor anywhere other than on the registrant's registered premises. In the instances when the additional signature of a spouse, co-signor or guarantor is necessary or when one or more of the obligors is ill or disabled, the signature may be obtained at an address other than that registered, but in no case may the signature be obtained by any person other than an obligor, an employee of the registrant, or authorized agent of the registrant.

(B) For purposes of sections 1321.51 to 1321.60 of the Revised Code, a loan is considered closed upon the signature of the obligor or obligors unless the loan contract is not executed by signature, in which case the loan is considered closed upon disbursement of loan funds.

(C) All loans made pursuant to sections 1321.51 to 1321.60 of the Revised Code, if made by direct mail as defined in this chapter, shall be made from a place of business for which the registrant holds a valid certificate of registration pursuant to section 1321.52 of the Revised Code.

(D) Registrants have an ongoing duty to notify the division of financial institutions of material changes in the information contained in the application and exhibits, schedules and other documentation submitted in conjunction with the application, and to report all changes or additions to information in the application within thirty days of the change. Material changes in the information include changes in affiliations, controlling interest, officers, directors, criminal record, and any change in net worth below the requirements in section 1321.53 of the Revised Code and section 1301:8-3-03 of the Administrative Code.

(E) The registrant shall obtain written consent of the borrower for any purchase of insurance on property other than that which is used as security for the loan.

(F) A registrant under sections 1321.51 to 1321.60 of the Revised Code shall permit payment to be made in advance in any amount on any contract at any time, but the registrant may apply the payment first to interest and charges due up to the date of payment.

(G) The registrant shall notify the borrower:

(1) In writing of any interest rate change at least thirty but not more than one hundred twenty days prior to the effective date of the changes except as set forth in paragraph (G)(3) of this rule, provided that if the interest rate is tied to a published and verifiable index and the contractual rate of interest is adjusted within forty-five days of change in the published index rate, the registrant shall notify the borrower in writing of any interest rate change at least thirty days prior to the effective date of the change. The notice required herein shall contain the disclosures required in paragraphs (G)(3)(a) to (G)(3)(h) of this rule.

(2) In the instance of a non-amortized or partially amortized interest-bearing loan, the registrant shall provide the borrower with written notice of maturity at least ninety but not more than one hundred twenty days prior to the expected maturity date.

(3) In writing where the loan is an adjustable rate mortgage having an initial fixed rate period, of the pending date when the adjustable rate mortgage is to reset to a variable rate at least six months but not more than seven months in advance of the initial scheduled reset date. The registrant shall also attempt to convey by telephone the information set forth in paragraphs (G)(3)(a) to (G)(3)(d) of this rule. The written notice shall be a separate and independent disclosure that includes:

(a) A statement of the borrower's current interest rate and corresponding monthly payment prior to the reset date;

(b) A good faith statement of the borrower's anticipated future interest rate and corresponding monthly payment following the reset date;

(c) A statement that notifies the borrower to contact the registrant for workout options in the event that there is a possible problem of repayment at the higher interest rate and monthly payment following the adjustable rate mortgage's reset;

(d) A toll-free number by which borrowers can discuss possible payment problems and workout options;

(e) An explanation of the index and/or formula that is being used to reset the interest rate and the source of that index and/or formula;

(f) A statement that notifies the borrower of alternative options that may be pursued including refinancing, payment forbearances, and pre-foreclosure sales;

(g) Contact information for the United States department of housing and urban development certified or approved counseling agencies that the borrower may use to seek counseling services in Ohio; and

(h) Contact information for the state housing finance authority in the state in which the property is located.

(H) Registrants shall clearly indicate by prominently disclosing on, or in, the loan documents, the federal or state statutory authority pursuant to which a loan is made. For purposes of this chapter, registrants shall be required to provide this prominent disclosure on loans made:

(1) Solely in reliance on the provisions of sections 1321.51 to 1321.60 of the Revised Code;

(2) Partially in reliance on the provisions of sections 1321.51 to 1321.60 of the Revised Code; or

(3) In reliance on any combination of federal or state provisions that do not include sections 1321.51 to 1321.60 of the Revised Code.

(I) A registrant is not prohibited from holding other licenses or registrations issued by the division of financial institutions as long as the registrant is in compliance with section 1321.551 of the Revised Code and other applicable provisions of state and federal laws.

(J) A registrant shall execute the release of any mortgage made pursuant to sections 1321.51 to 1321.60 of the Revised Code in compliance with Chapter 5301. of the Revised Code.

(K) In providing any payment history requested by the borrower or by the division, the registrant shall provide a clear and accurate payment statement in a manner a reasonable borrower should understand that sets forth the dates and amounts due and owing and the dates and amounts received and paid.

(L) In circumstances where the registrant has determined not to modify a defaulting mortgage loan or an agreement on modification cannot be reached, and it has initiated foreclosure proceedings, the registrant servicing the loan shall provide notice to the borrower stating the contact information for the loss mitigation, foreclosure prevention, or loan workout staff authorized to discuss options for reinstatement and foreclosure avoidance options. The notice shall be provided by writing or telephone at least ten days before referral to the registrant's foreclosure counsel.

(M) In the case of any default of a mortgage loan the registrant shall in its written notice of the payment deficiency provide a toll-free number by which the borrower can discuss the payment problem and workout options.

(N) The registrant is liable for payment of the annual assessment described in section 1321.20 of the Revised Code on any loan made by the registrant which has been sold, transferred, or assigned to another person if servicing rights have been retained by the registrant.

(O) The registrant may in addition to, or as part of, its loan modification process offer the borrower the option to have the matters under dispute submitted for mediation before an unbiased private third party.

Replaces: 1301:8-3-08, 1301:8-3-09, 1301:8-3-12, 1301:8-3-14, 1301:8-3-16, 1301:8-3-18, 1301:8-3-19, 1301:8-3-22

Effective: 07/01/2008
R.C. 119.032 review dates: 11/15/2012
Promulgated Under: 119.03
Statutory Authority: 1321.54(A)
Rule Amplifies: 1321.51 to 1321.60
Prior Effective Dates: 2/1/1986, 4/1/1990, 3/18/1999

1301:8-3-08 Loan closing. [Rescinded].

Rescinded eff 7-01-08

1301:8-3-09 Loans made by direct mail. [Rescinded].

Rescinded eff 7-01-08

1301:8-3-10 Annual report.

Pursuant to division (B) of section 1321.55 of the Revised Code, the annual report shall include a sworn statement affirming the validity of the reported interest, loan origination charges, points and credit line charges and upon the request of the superintendent, the registrant shall demonstrate the method by which these figures were calculated.

R.C. 119.032 review dates: 08/26/2009 and 11/15/2012

Promulgated Under: 119.03

Statutory Authority: 1321.54(A)

Rule Amplifies: 1321.55

Prior Effective Dates: None

1301:8-3-11 Sale, assignment or collection of loans by registrant; payment of annual assessment. [Rescinded].

Rescinded eff 7-01-08

1301:8-3-12 Prohibitions.

(A) No registrant shall take any note or other promise to pay that does not set forth the entire agreement made with the borrower.

(B) No registrant shall take any note or promise to pay in which blanks are left to be filled in after execution.

(C) No registrant shall charge or collect interest prior to the date of disbursement of the loan funds to the borrower.

(D) A new loan shall not be made for the purpose of paying any part of the interest or principal due on an existing loan with the same registrant unless the interest and principal balance of the existing loan is paid in full from the proceeds of the new loan.

(E) Loans made pursuant to sections 1321.51 to 1321.60 of the Revised Code which are secured by a mortgage on a borrower's real estate other than a first lien on the real estate shall not be collected by persons other than a registrant pursuant to sections 1321.51 to 1321.60 of the Revised Code or an exempt entity described in division (D) of section 1321.53 of the Revised Code that is properly conducting business under and as permitted by any law or authority referred to in that section.

Replaces: 1301:8-3-11

Effective: 07/01/2008
R.C. 119.032 review dates: 02/08/2008 and 11/15/2012
Promulgated Under: 119.03
Statutory Authority: 1321.54(A)
Rule Amplifies: 1321.51 to 1321.60
Prior Effective Dates: 2/1/1986

1301:8-3-13 Cancellation and return of original loan documents; receipt upon payment.

(A) Upon repayment of the loan in full, the original note signed by any obligor or copy, photograph, or stored representation of the original note as retained in accordance with rule 1301:8-3-04 of the Administrative Code shall be plainly marked"paid" or "canceled" and the note or the reproduction of the note shall be returned to the obligor or, if there are two or more obligors, to one of them.

(B) If requested, the registrant shall give to the borrower a receipt for each payment made on account of any interest-bearing or precomputed loan.

Effective: 07/01/2008
R.C. 119.032 review dates: 02/08/2008 and 11/15/2012
Promulgated Under: 119.03
Statutory Authority: 1321.54(A)
Rule Amplifies: 1321.55 , 1321.57 , 1321.58
Prior Effective Dates: 2/1/1986, 3/18/1999

1301:8-3-14 Notice of interest rate adjustment or maturity. [Rescinded].

Rescinded eff 7-01-08

1301:8-3-15 Receipts for dishonored check charges; receipts for mortgage documentation fees. [Rescinded].

Rescinded eff 7-01-08

1301:8-3-16 Written consent to insurance on non-security. [Rescinded].

Rescinded eff 7-01-08

1301:8-3-17 Policy or certificate of insurance; disclosure of credit life, credit accident and health, and unemployment insurance cancellation rights; Ohio insurance law.

(A) When, in connection with a loan, a registrant furnishes or places insurance written on behalf of the borrower at the borrower's expense, a policy or certificate of insurance properly executed shall be furnished to the borrower within fifteen days of the closing date of the loan. The policy or certificate shall state the name of the insurance company, the nature of the insurance, the extent of the coverage, the amount of the premium, and the effective and expiration dates of the policy.

(B) If a registrant furnishes or places credit life insurance, credit accident and health insurance or unemployment insurance on behalf of the borrower at the borrower's expense, the registrant shall give written notice to the borrower at the time the loan is made. The notice shall disclose the borrower's right to cancel the insurance within twenty-five days of the purchase of the insurance with a full refund of the premium or identifiable charge for the insurance. The notice shall further disclose that the cancellation may be effected upon the written request of the borrower together with the return of the policy or certificate of insurance to the registrant.

(C) All insurance sold or obtained in connection with the making of a loan shall be governed by Title 39 of the Revised Code.

(D) In any transaction in which the registrant furnishes or places insurance on behalf of the borrower at the borrower's expense, the registrant shall, prior to furnishing or placing insurance, provide written disclosure to the borrower of the business relationship, beneficial ownership or affiliation, whether direct or indirect, between the registrant and the insurer.

Effective: 07/01/2008
R.C. 119.032 review dates: 02/08/2008 and 11/15/2012
Promulgated Under: 119.03
Statutory Authority: 1321.54(A)
Rule Amplifies: 1321.57(E)
Prior Effective Dates: 2/1/1986, 4/1/1990

1301:8-3-18 Other loans. [Rescinded].

Rescinded eff 7-01-08

1301:8-3-19 Affiliation of registrant. [Rescinded].

Rescinded eff 7-01-08

1301:8-3-22 Mortgage releases. [Rescinded].

Rescinded eff 7-01-08

1301:8-3-23 Interpretation.

The language contained in division (H)(1)(a) of section 1321.57 of the Revised Code permits registrants to use funds received from borrowers, in amounts authorized by law to record, file or release security interest and mortgages on a loan for purposes either of purchasing insurance to insure the registrant against losses for failure to record or file or creating a self-insurance fund to reimburse the registrant against losses for failure to record or file.

Replaces: 1301:8-3-23

Effective: 07/01/2008
R.C. 119.032 review dates: 11/15/2012
Promulgated Under: 119.03
Statutory Authority: 1321.54(A)
Rule Amplifies: 1321.57(H)
Prior Effective Dates: 4/1/1990, 11/30/1997

1301:8-3-24 Points and prepayment penalties on real estate loans.

Pursuant to sections 1321.51 to 1321.60 of the Revised Code, no points or prepayment penalties are permissible on loans not secured by real estate. No prepayment penalty permitted by division (G)(1) of section 1321.57 of the Revised Code shall extend beyond the time allowed pursuant to division (C)(1) of section 1343.011 of the Revised Code. First lien mortgages made subject to sections 1321.51 to 1321.60 of the Revised Code shall not be subject to prepayment penalties if otherwise contrary to the applicable provisions of section 1343.011 of the Revised Code.

Replaces: 1301:8-3-24

Effective: 07/01/2008
R.C. 119.032 review dates: 11/15/2012
Promulgated Under: 119.03
Statutory Authority: 1321.54(A)
Rule Amplifies: 1321.57(G)
Prior Effective Dates: 4/1/1990, 6/1/07

1301:8-3-25 Temporary mortgage loan originator license application.

(A) Pursuant to division (C) of section 1321.537 of the Revised Code, the application for a temporary mortgage loan originator license shall be accompanied by a nonrefundable application fee of one hundred fifty dollars and all other required fees, including any fees required by the "Nationwide Mortgage Licensing System and Registry."

(B) A temporary mortgage loan originator license shall be valid for ninety days from the date of issuance. The superintendent of financial institutions may extend the expiration of the temporary license an additional thirty days upon receiving a written request from the temporary mortgage loan originator at least five business days prior to the expiration date on the license.

(C) The term of a temporary mortgage loan originator license begins on the issuance date and ends on the expiration date as printed on the temporary license.

Effective: 06/07/2013
R.C. 119.032 review dates: 06/07/2018
Promulgated Under: 119.03
Statutory Authority: 1321.54 , 1321.537
Rule Amplifies: 1321.537