Md. Code Regs. 09.03.06.05

Current through Register Vol. 51, No. 22, November 1, 2024

Section 09.03.06.05 - Records

A. Preservation of Records.

(1) A licensee shall preserve the records of a mortgage loan in one or more of the following ways:

(a) Original books, accounts, and files;

(b) An approved electronic equivalent; or

(c) An approved microphotographic copy.

(2) A licensee's use of electronic or microphotographic preservation of records, or storage of books and records at a location other than the licensee's place of business, shall be considered approved by the Commissioner if the licensee:

(a) Completes an attestation in the format prescribed by the Commissioner; and

(b) Uploads an electronic copy of the attestation to NMLS in accordance with directions provided by the Commissioner.

(3) A licensee who stores records in the form of electronic copies shall:

(a) Store the records in a format that shall allow the Commissioner to read the records using common, readily available software;

(b) Maintain electronic copies of the original documents that are:

(i) Complete;

(ii) Accurate;

(iii) Unaltered; and

(iv) Unabridged;

(c) Ensure that, -when printed, the records -will be legible;

(d) Protect the records from:

(i) Deletion;

(ii) Damage to or failure of electronic storage media; and

(iii) Unauthorized access, use, modification, or disclosure; and

(e) Be permitted to alter electronic documents in any manner that does not affect the content of the records.

(4) A licensee who stores records at a location other than its licensed address shall:

(a) Ensure that all records are:

(i) Complete;

(ii) Accurate;

(iii) Unaltered; and

(iv) Unabridged;

(b) Protect the records from:

(i) Deletion;

(ii) Damage to, or failure of, electronic storage media; and

(iii) Unauthorized access, use, modification, or disclosure; and

(c) Immediately notify the Commissioner when a licensee discovers or is notified of a potential loss of records, completes a reasonable and prompt investigation, and then determines that records have been lost or are reasonably likely to be lost.

(5) Time Period.

(a) A lender shall retain records for 61 months after a loan is denied, repayment of the loan is made in full, or the loan is sold, whichever occurs first.

(b) A mortgage servicer shall retain records for 61 months after final payment is made or the right to service the loan under either a servicing or subservicing agreement is terminated or transferred, whichever occurs first.

(c) If a licensee acts as a broker in a mortgage loan, records of the mortgage loan shall be retained for 61 months after the mortgage loan is made or denied.

(6) Records required to be retained shall be maintained separately from the records of any other business of the licensee or its employees.

(7) Notwithstanding §A(3) of this regulation, a licensee may commingle records of mortgage loans with records of other types of loans made, brokered, or held by the licensee, if the mortgage loans can be readily retrieved for an examination.

B. Content of Records.

(1) For each mortgage loan made or serviced by a licensee, a file shall be maintained which contains, at a minimum, the following:

(a) The date of the loan closing;

(b) The annual percentage rate of interest payable on the loan;

(c) Documentation of all charges and fees disbursed from the proceeds of the loan or collected directly from the borrower;

(d) Documentation of disbursements of loan proceeds to creditors of the borrower;

(e) Documentation of any broker's agreement signed by the borrower if a broker fee is paid from the loan proceeds at closing;

(f) The amount of any origination or discount fee;

(g) A notation of any applicable governmental loan program for each loan;

(h) An accurate history or audit trail, since the date of loan closing, of the application of all:

(i) Payments;

(ii) Charges; and

(iii) Credits;

(i) The objective index used to determine the interest rate from time to time if the loan has an adjustable rate;

(j) If the loan was assigned by the licensee, the name of the assignee, and the date of the assignment;

(k) Any document which indicates whether the security interest is in first or second lien position at the time the loan is made;

(l) All required State and federal disclosure documents;

(m) Records of all monies received from a borrower for fees to be paid to third parties for services in connection with the loan;

(n) Records indicating that the services were provided and the fees paid by the licensee to the third party;

(o) A record of dates on which a credit report, appraisal, and other services or items were ordered by the licensee;

(p) Any other document on which the licensee relied in underwriting the loan;

(q) Optional insurance:

(i) Insurance information regarding optional insurance coverage purchased by the borrower in connection with the loan, including the premium charged, the types of coverages, and written authorization from the borrower for each type of coverage;

(ii) This paragraph does not apply to hazard insurance and flood insurance on the property securing the mortgage loan;

(r) Records of any foreclosure action begun by the licensee by filing an order to docket or a complaint to foreclose including, if applicable:

(i) The name and license number or NMLS unique identifier of the mortgage originator that originated the loan if that information is contained in the security instrument underlying the foreclosure or is otherwise known to the licensee;

(ii) The name and license number or NMLS unique identifier of the mortgage lender that originated the loan; and

(iii) Copies of all documents provided to the borrower or filed with a court in conjunction with the foreclosure action;

(s) Copies of all documents filed by or on behalf of the licensee in a borrower's bankruptcy proceeding involving the mortgage loan;

(t) If the licensee is a mortgage servicer:

(i) Copies of all written correspondence between the licensee or its vendors and the borrower;

(ii) Written records of verbal communications between the mortgage servicer or its vendors and the borrower; and

(iii) Copies of any audio recordings of communication with the borrower; and

(u) Other documents necessary to prove compliance with any State or federal statute or regulation applicable to the mortgage loan.

(2) Notwithstanding §B(1) of this regulation, a licensee acting as a broker in connection with a particular mortgage loan:

(a) Shall retain copies of all records listed in §B(1) of this regulation which the licensee obtains in the course of processing or underwriting a loan;

(b) Shall retain a copy of the broker agreement between the licensee and the borrower;

(c) Shall retain a record of the lender to whom the loan was brokered;

(d) Shall retain a record of the amount of any finder's fee received;

(e) Shall retain a record of any compensation, as required by federal law; and

(f) Is not responsible for retaining any record unless the licensee at some time is in physical possession of a copy of that record.

(3) A licensee shall maintain all records that demonstrate that the licensee meets the general qualifications for a license as described in Financial Institutions Article, §11-506, Annotated Code of Maryland.

(4) Records retained for longer than the minimum time period shall be made available to the Commissioner upon the Commissioner's reasonable request.

C. Provision of Records to the Commissioner.

(1) A licensee who keeps books and records at a licensed location shall, at the request of the Commissioner, immediately make those books and records available to the Commissioner at the licensed location.

(2) A licensee who keeps books and records at a location other than the licensed location with prior permission by the Commissioner shall, within 5 business days of a request by the Commissioner, make those books and records available to the Commissioner at the licensed location.

(3) A licensee shall ensure that the Commissioner receives any records requested in writing by the Commissioner within 10 business days from the date of the request.

(4) When delivered to the Commissioner, records shall be:

(a) In an electronic format agreed to by the Commissioner;

(b) In paper form, if the licensee does not maintain its records in an electronic format; and

(c) Organized in any manner requested by the Commissioner.

D. Loss of Records. A licensee shall immediately notify the Commissioner of any actual or potential loss of records required to be kept by this regulation.

Md. Code Regs. 09.03.06.05

Regulations .05, Code of Conduct_Mortgage Lenders, adopted as an emergency provision effective July 1, 1989 (16:14 Md. R. 1564); emergency status extended at 16:26 Md. R. 2782 (Emergency provisions are temporary and not printed in COMAR)
Regulations .05, Mortgage Lenders, adopted effective February 19, 1990 (17:3 Md. R. 297); amended and recodified from .04 effective 46:19 Md. R. 813, eff. 10/4/2019