1301:8-7-06 Recordkeeping.

(A) In accordance with division (B) of section 1322.06 of the Revised Code, a registrant shall maintain records pertaining to business transacted pursuant to sections 1322.01 to 1322.12 of the Revised Code for four calendar years. If the loan is not serviced by the registrant, the retention period commences on the date the loan is closed or, if the loan is not closed, the date of the withdrawal or turndown of the loan application. If the loan is serviced by the registrant, the retention period commences on the date the loan is paid in full or the date the licensee ceases to service the loan.

(B) If a person surrenders its certificate of registration or otherwise ceases to engage in business as a mortgage broker, such person shall nonetheless preserve the records required by this rule.

(C) All books and records shall be kept in this state in a registered office that is readily accessible to the division of financial institutions. Should a registrant wish to maintain such records elsewhere, it must submit a written request to the superintendent and receive written authorization prior to said books, accounts, and records being maintained in any place other than the registered in-state office location designated on the registration application.

(D) Any registrant who is granted approval to store its books and records in a location outside this state shall pay the division's travel, lodging and per diem expenses incurred in travel to examine such books and records. At the request of the superintendent, payment of the estimated travel, lodging and per diem expenses, as determined by the superintendent, shall be made in advance and placed on deposit with the division. After actual costs are determined, any excess funds shall be refunded to the registrant.

(E) All records shall be kept current and shall be available at all times during normal business hours for review by the division of financial institutions. Records should 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.

(F) A registrant shall segregate the records relating to the business it conducts pursuant to sections 1322.01 to 1322.12 of the Revised Code from all other business records.

(G) Any books, accounts or records required to be maintained by this rule may be maintained in their original form, on microfiche or other electronic media, provided:

(1) The registrant obtains prior written approval from the superintendent; and

(2) At the request of the division, the records shall be printed on paper for inspection or examination without cost to the division, within forty-eight hours of the request.

(H) Every registrant must make, maintain, keep current and preserve the following books and records in a legible and readily accessible format:

(1) An alphabetical index of all buyers for whom the registrant has obtained mortgage loans, which lists the dates of the loan obtained for the buyers, the amounts of the loans, the individual responsible for originating the loan, and the identity of the lenders that funded or purchased the loan;

(2) HUD file. Each registrant shall create, maintain, keep current and preserve a file that contains a complete signed copy of each final HUD-1 and HUD-1A settlement statement, arranged chronologically, for each loan originated by the registrant on behalf of a buyer. The HUD file shall be maintained separately from the HUDs contained in the individual buyer files. Each HUD statement shall separately disclose all of the following, regardless of whether fees are paid outside of closing or are included in the amount of the loan:

(a) The amount, type, and identity of the recipient of each fee paid by the buyer in conjunction with loans originated by the registrant including, but not limited to appraisal fees, credit report fees, rate lock fees, yield spread premiums, courier fees, and title and settlement fees. This rule shall not be interpreted to require the disclosure of yield spread premiums and servicing release fees collected by registrants from investors as a result of the sale of mortgage loans on the secondary market; and

(b) The amount and type of every fee paid to the registrant by the buyer including, but not limited to, mortgage broker fees, application fees, document preparation fees, origination fees and underwriting fees.

(3) Individual Buyer Files. Each registrant shall create, maintain, and keep current, a separate file for each application received. Each individual buyer file shall contain, when applicable, at least the following:

(a) A copy of the original loan application signed and dated by the buyer and the individual originating the loan, including any attachments, supplements, or addenda thereto;

(b) Credit information such as written authorizations to order credit report(s), verifications, credit reports, and any correspondence regarding credit repair;

(c) Signed and dated copies of any and all contractual agreements or understandings, including, but not limited to, any interest rate lock-ins or loan commitments, broker or co-broker agreements, and all notes and memoranda of conversations or meetings with any mortgage applicant or any other party in connection with that mortgage loan application or its ultimate disposition;

(d) A copy of the original signed and dated mortgage loan origination disclosure statement, as well as any revised copies, as mandated by section 1322.062 of the Revised Code and in compliance with rule 1301:8-7-15 of the Administrative Code;

(e) Copies of all applicable federal disclosures given to the individual buyer, including but not limited to:

(i) The original dated, as well as any revised: Good Faith Estimate; HUD-1 and HUD 1-A settlement statements; Required Use Disclosure; Affiliated Business Arrangement Disclosure; and or Mortgage Servicing Disclosure, as required under the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. sections 2601 - 2617 , and the rules promulgated thereunder, known as Regulation X and codified in 24 C.F.R. Part 3500 and in effect on January 1, 2007. Each HUD statement shall comply with the disclosure requirements of paragraph (H)(2) of this rule;

(ii) The original dated, as well as any revised Truth in Lending Disclosure Statement, as required by the federal Truth in Lending Act, 15 U.S.C. sections 1601 - 1667 f., and the rules promulgated under the act, known as Regulation Z, found in 12 C.F.R. Part 226 and in effect on January 1, 2007; and

(iii) Copies of any disclosure required by the federal Equal Credit Opportunity Act, 15 U.S.C. sections 1691 - 1691 f, and the corresponding rules, titled Regulation B, found in 12 C.F.R. Part 202 effective January 1, 2007, including any required thirty-day notification; notice of right to receive a copy of the appraisal; and denial notices;

(f) A copy of each appraisal and the corresponding appraisal invoice;

(g) Receipts or other documentation acceptable to the superintendent for any fees collected by the registrant from the buyer on behalf of third-party service providers such as real estate appraisers, title companies, credit reporting services, and couriers, including receipts for any rate lock fees collected from buyers on behalf of mortgage lenders, or flood plain certification reports. This rule shall apply whether or not the collection or receipt of the fees occurs prior to the closing of the loan or the fees are paid to the registrant from the proceeds of the loan: and

(h) Copies of applicable disclosures required by state law.

(4) Special Account Records. Each registrant shall create, maintain, and keep current, records related to the special account required by section 1322.08 of the Revised Code. Such records shall comply with rule 1301:8-7-05 of the Administrative Code.

(5) Advertisement file. Each registrant shall create, maintain, and keep current, the advertisement file mandated by rule 1301:8-7-07 of the Administrative Code.

(6) General Business Records. The following general business records must be maintained and kept current:

(a) All correspondent agreements with lenders to whom loan applications are submitted;

(b) All checkbooks, check registers, bank statements, deposit slips, withdrawal slips, and cancelled checks or electronic images;

(c) Copies of any checks made payable to a registrant from a buyer or other entity paying a fee for the services of the registrant or an employee of the registrant;

(d) Documentation to support the source of and purpose for each receipt and disbursement of funds in order that the receipts may be reconciled to bank deposits and to the books of the registrant. HUD-1 and HUD-1A settlement statements are not acceptable proof of receipt for purposes of this rule;

(e) Copies of all federal tax withholding forms, reports of income for federal taxation, and evidence of payments to all employees, independent contractors and others compensated by the registrant in connection with the conduct of mortgage lending business;

(f) Copies of all contractual arrangements or understandings with employees, independent contractors, and third parties that relate in any way to the providing of mortgage broker services, including but not limited to any agreements for the pricing of goods or services, any investor contracts, any employment agreements, and any non-compete agreements;

(g) Copies of articles of incorporation, corporate minutes, and documents evidencing corporate name changes, change of ownership or officers; and

(h) Such other books and records as the superintendent of the division of financial institutions may from time to time specify in writing.

Effective: 06/01/2007
R.C. 119.032 review dates: 11/15/2009
Promulgated Under: 119.03
Statutory Authority: 1322.12
Rule Amplifies: 1322.06
Prior Effective Dates: 1-22-95, 9-1-06