Mortgage bankers, mortgage brokers, and real estate closing agents, amendments to ch 18
ARC 3080C
BANKING DIVISION[187]
Adopted and Filed
Pursuant to the authority of Iowa Code sections 17A.3 and 535B.14, the Iowa Division of Banking (IDOB) hereby amends Chapter 18, "Mortgage Bankers, Mortgage Brokers, and Real Estate Closing Agents," Iowa Administrative Code.
These amendments reflect the Iowa Division of Banking's compliance with Iowa Code section 17A.7(2), which states that, as of July 1, 2012, "over each five-year period of time, an agency shall conduct an ongoing and comprehensive review of all of the agency's rules [and t]he goal of the review is the identification and elimination of all rules of the agency that are outdated, redundant, or inconsistent or incompatible with statute or its own rules or those of other agencies." The amendments to Chapter 18 are a result of the IDOB's review of the existing administrative rules. These amendments are intended to replace antiquated terminology and statutory references, to eliminate outdated requirements, and to update certain ongoing requirements to accurately reflect current practice, specifically regarding the use of the nationwide multistate licensing system.
Notice of Intended Action was published in the Iowa Administrative Bulletin as ARC 2993C on March 29, 2017. No public hearing was held, and no comments were received. The adopted amendments are identical to those published under Notice.
These rules are subject to waiver and variance pursuant to 187—Chapter 12.
The Iowa Division of Banking adopted these amendments on May 4, 2017.
No existing authorized activities are being restricted, no new activities are being authorized, no existing fees are being increased, and no new fees are being added. The IDOB has therefore concluded that these amendments should not have an impact on jobs in Iowa.
These amendments are intended to implement Iowa Code chapters 17A and 535B.
These amendments will become effective July 1, 2017.
The following amendments are adopted.
Item 1. Amend rule 187—18.1(17A,535B), definitions of "License application," "Licensee," "Mortgage loan originator," "Nationwide mortgage licensing system and registry" and "Services a loan," as follows:
"License application" means an electronic application or registration submitted to the administrator for a license to operate as a mortgage banker, mortgage broker, or closing agent in accordance with the provisions of 2009 Iowa Code Supplement section 535B.4 as amended by 2010 Iowa Acts, Senate File 2348, section 4.
"Licensee" means a person who has a license to operate as a mortgage banker, mortgage broker, or closing agent in accordance with the provisions of 2009 Iowa Code Supplement section 535B.4 as amended by 2010 Iowa Acts, Senate File 2348, section 4.
"Mortgage loan originator" means a natural person who is licensed under 2009 Iowa Acts, Senate File 355, Iowa Code chapter 535D and 187—Chapter 19.
"Nationwide mortgage multistate licensing system and registry" or "NMLS&R NMLS" means a mortgage multistate 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 mortgage loan originators, mortgage providers, mortgage lenders, mortgage brokers, and mortgage servicers.
"Services a loan" or "servicing a loan" means undertaking the direct collection of payments on a loan from the borrower or holding the right to undertake direct collection of payments on a loan from the borrower. Undertaking the direct collection of payments means receiving any scheduled periodic payments from a borrower pursuant to the terms of any federally related mortgage loan. Holding the right to undertake direct collection of payments means holding the right to service a loan, including where the holder of this right contracts with or otherwise arranges for another person to service the loan.
Item 2. Amend rule 187—18.2(17A,535B) as follows:
187—18.2(17A,535B) Application for license.
18.2(1) Application for a license to operate as a mortgage banker, mortgage broker, or closing agent shall be submitted to the administrator through the NMLS&R NMLS, and all requested information shall be provided on or with the application form. The administrator may consider an application or registration withdrawn if it the application or registration does not contain all of the information required and the information is not submitted to the administrator within 30 days after the administrator requests the information.
18.2(2) Each officer, director, and individual who has control of an applicant must provide fingerprints, authorize a fingerprint background check through NMLS, and pay the appropriate fees for the purpose of conducting a national criminal history background check through the Federal Bureau of Investigation.
18.2(2) 18.2(3) The license application shall be accompanied by a fee of $500 plus $40 per additional branch location. The $500 fee is not subject to refund. The applicant shall also pay any additional fees required by the NMLS&R NMLS including but not limited to the following: system processing fees, background check fees, and credit background check fees.
18.2(3) 18.2(4) If any information changes after the filing of the initial application, the applicant shall provide updated information to the administrator in writing within 10 calendar days of the change. Failure to provide updated information when a change has occurred may result in denial of the application.
18.2(4) 18.2(5) The administrator shall approve or deny a license application in accordance with the provisions of 2009 Iowa Code Supplement section 535B.5 as amended by 2010 Iowa Acts, Senate File 2348, section 5. A person shall not be eligible for licensing as a mortgage banker or mortgage broker unless all mortgage loan originators who are employed by, under contract with, or exclusive agents of the person have successfully completed the licensing requirements of Iowa Code chapter 535D.
18.2(5) 18.2(6) An applicant for a mortgage banker or mortgage broker license must file with the administrator a bond complying with the provisions of 2009 Iowa Code Supplement section 535B.9 as amended by 2010 Iowa Acts, Senate File 2348, section 7. The bond amount required to be filed and maintained by the applicant shall be set and adjusted as necessary annually in accordance with the following scale, based on the volume of residential mortgage loans made, originated, arranged, brokered, processed, underwritten, and serviced, as the case may be, by the applicant or licensee during the preceding calendar year:
18.2(6) 18.2(7) An applicant for a closing agent license must file with the administrator a bond in the amount of $25,000 which complies with the provisions of 2009 Iowa Code Supplement section 535B.9 as amended by 2010 Iowa Acts, Senate File 2348, section 7.
18.2(7) 18.2(8) Licenses expire on the next December 31 after issuance. However, licenses granted on or after November 1 but before January 1 will not expire until December 31 of the following year. For example, a license granted on November 17, 2008, would not expire until December 31, 2009.
Item 3. Amend subrule 18.3(2) as follows:
18.3(2) Application to renew a license shall be submitted to the administrator before by December 1 of the year of expiration through the NMLS&R NMLS. All requested information shall be provided to the administrator as directed by the NMLS&R NMLS. Applications for renewal of a license to transact business solely as a mortgage broker or closing agent must be accompanied by a fee of $200. Applications for renewal of a license to transact business as a mortgage banker must be accompanied by a fee of $400. In addition, the mortgage banker or mortgage broker licensee shall pay a branch office renewal fee of $40 per branch. The administrator may assess late fees of up to $10 per day for applications submitted after December 1.
Item 4. Adopt the following new rule 187—18.4(17A,535B):
187—18.4(17A,535B) Grounds for approval or denial.
18.4(1) The superintendent shall approve or deny a license application in accordance with the provisions of Iowa Code section 535B.5.
18.4(2) The following may be considered evidence that the business of the applicant may not be operated honestly in the public interest consistent with the purposes of Iowa Code chapter 535B and may therefore be considered grounds for denial of an application:
a. An applicant, or an officer, director, or individual who has control of an applicant, has had a mortgage loan originator license or any lending license revoked in any governmental jurisdiction.
b. An applicant, or an officer, director, or individual who has control of an applicant, has been convicted of, or has pleaded guilty or no contest to, a felony in a domestic, foreign, or military court if such felony involved an act of fraud, dishonesty, or breach of trust, or money laundering. A pardon of a conviction shall not constitute a conviction for purposes of this subrule.
Item 5. Amend rule 187—18.7(17A,535B), introductory paragraph, as follows:
187—18.7(17A,535B) Notice of significant events. A licensee shall notify the administrator immediately and in writing within five business 10 days of the occurrence of any of the following events.
Item 6. Amend rule 187—18.8(17A,535B) as follows:
187—18.8(17A,535B) Changes in the licensee's business; fees.
18.8(1) No change.
18.8(2) A licensee shall notify the administrator through the NMLS&R NMLS of a change in the location, the addition, or the closing of any office prior to the change, addition, or closure.
18.8(3) A mortgage banker or mortgage broker licensee shall maintain on file with the administrator, through the NMLS&R NMLS, a list of all mortgage loan originators who are employed by, under contract with, or exclusive agents of the licensee. The licensee shall pay any fees assessed by the NMLS&R NMLS to add a mortgage loan originator to the licensee's list in the NMLS&R NMLS.
18.8(4) When a mortgage loan originator ceases to be employed by, under contract with, or an exclusive agent of a mortgage banker or mortgage broker licensee, the licensee shall notify the administrator, through the NMLS&R NMLS, within five business 10 days. The notification shall include the reasons for the termination of the mortgage loan originator's employment, contract, or agency.
18.8(5) A mortgage banker or mortgage broker licensee shall notify the administrator through the NMLS&R NMLS of the addition of any mortgage loan originator, owner, officer, partner, or director within five business 10 days of addition.
18.8(6) No change.
18.8(7) NMLS&R NMLS system processing fees. In addition to the fees set forth in this chapter, the applicant or licensee shall pay any fee assessed by the NMLS&R NMLS attributed to the licensee's record in the NMLS&R system NMLS including but not limited to the initial set-up fee, an annual processing fee, and a loan sponsorship transfer fee.
18.8(8) When a change of control of a licensee is proposed, the party that will assume control of the licensee shall give notice to the superintendent through the NMLS at least 60 days before the proposed change will take effect. Control is defined in Iowa Code section 535B.6A. The party that will assume control of the licensee shall furnish the superintendent through the NMLS with the same information required of initial applicants for a license, along with the appropriate fee. The party that will assume control may be required to provide fingerprints, authorize a fingerprint background check through NMLS, and pay the appropriate fees for the purpose of conducting a national criminal history background check through the Federal Bureau of Investigation. The superintendent shall approve or deny the request in accordance with the provisions of Iowa Code section 535B.5 and rule 187—18.4(17A,535B).
Item 7. Amend subrule 18.16(4) as follows:
18.16(4) Application log. A mortgage banker or mortgage broker licensee shall maintain an application log. The application log is a chronological list of applications received. The application log shall include the name of the applicant ,; date the application was completed , the; name of the broker, the lender, and the mortgage loan originator, as applicable, including the unique NMLS&R NMLS identification number assigned to each,; notes for action taken on applications (such as "approved," "denied," or "withdrawn"),; and date of action. For approved applications, the application log shall show the date the loan closed and the name of the lender. For purposes of these rules, information from an applicant becomes an application when the licensee obtains the name and social security number of the applicant.
Item 8. Amend subrule 18.16(5) as follows:
18.16(5) Loan register. A mortgage banker or mortgage broker licensee shall maintain a loan register. The loan register shall include the following information for every loan that is made: the date of the transaction ,; the name of the borrower ,; the name of the broker, the lender, the mortgage loan originator, and the closing agent, as applicable, including the unique NMLS&R NMLS identification number assigned to each,; and the amount financed. The register shall be kept chronologically in the order the loans closed. The loan register may be combined with the application log.
Item 9. Amend subrule 18.16(6) as follows:
18.16(6) Application file. A mortgage banker or mortgage broker licensee shall maintain an application file for each application received. The application file shall contain copies of the application and any required disclosures. A copy of any adverse action taken on the application, including any documentation supporting that action such as an appraisal report or credit report, shall also be placed in the application file. The application file shall also contain the name of the broker, the lender, and the mortgage loan originator, as applicable, including the unique NMLS&R NMLS identification number assigned to each.
Item 10. Amend subrule 18.16(7) as follows:
18.16(7) Loan file. A mortgage banker or mortgage broker licensee shall maintain a loan file for each loan made. The loan file consists of the application file, the appraisal report, underwriting verifications, the closing file described in subrule 18.22(6) including other supporting documentation, and documents from the loan closing. These documents include: note, mortgage, all truth-in-lending disclosures, and all Real Estate Settlement Procedures Act disclosures. The loan file shall also contain the name of the broker, the lender, the mortgage loan originator, and the closing agent, as applicable, including the unique NMLS&R NMLS identification number assigned to each.
Item 11. Amend subparagraph 18.16(11)"a"(3) as follows:
(3)Information included in the "good faith estimate" (GFE) initial disclosure required under the federal Real Estate Settlement Procedures Act, including the rate, the date of any interest rate lock, and an itemization of settlement charges and all broker compensation.
Item 12. Amend subparagraph 18.16(11)"a"(4) as follows:
(4)Information included in the final HUD-1 Settlement Statement closing disclosure.
Item 13. Amend rule 187—18.17(17A,535B) as follows:
187—18.17(17A,535B) Mortgage call reports. Each mortgage banker and mortgage broker licensee shall submit to the NMLS&R NMLS reports of condition, which shall be in such form and shall contain such information as the NMLS&R NMLS shall require. For each day after the NMLS&R-established NMLS-established due date that the report is no not received, the administrator may assess late fees of $10 per day.
Item 14. Amend paragraph 18.18(1)"d" as follows:
d. An advertisement shall clearly show the licensee's unique NMLS&R NMLS identification number.
Item 15. Amend paragraph 18.20(2)"j" as follows:
j. The licensee fails to notify the administrator within five 10 days of the occurrence of one of the significant events set forth in rule 187—18.7(17A,535B).
Item 16. Amend subrule 18.22(2) as follows:
18.22(2) A closing agent shall disburse or deliver funds only in accordance with closing instructions from the lender, the attorney's title opinion or title commitment, and the real estate purchase agreement, when applicable. All disbursements shall agree to with the final signed settlement statement closing disclosure.
Item 17. Amend paragraph 18.22(6)"b" as follows:
b. A signed settlement statement closing disclosure that totals properly and is supported by written instructions for all amounts (such as closing instructions, invoices, or written payoffs). If the settlement closing disclosure requires changes, a copy of the new settlement statement closing disclosure with changes clearly documented shall be maintained in the file.
Item 18. Amend paragraph 18.22(6)"e" as follows:
e. Detailed records of the individuals present at each closing, including copies of photo identification, and specifying where and when each closing is held.
Item 19. Amend 187—Chapter 18, implementation sentence, as follows:
These rules are intended to implement Iowa Code chapter chapters 17A and 535B and 2010 Iowa Acts, Senate File 2348.
[Filed 5/4/17, effective 7/1/17]
[Published 5/24/17]
Editor's Note: For replacement pages for IAC, see IAC Supplement 5/24/17.
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The official published PDF of this document is available from the Iowa General Assembly’s Administrative Rules page.
View the Iowa Administrative Bulletin for 5/24/2017.
The following administrative rule references were added to this document. You may click a reference to view related notices.
Rule 187-18.1 Rule 187-18.16(11)"a" Rule 187-18.16(4) Rule 187-18.16(5) Rule 187-18.16(6) Rule 187-18.16(7) Rule 187-18.17 Rule 187-18.18(1)"d" Rule 187-18.2 Rule 187-18.20(2)"j" Rule 187-18.22(2) Rule 187-18.22(6) Rule 187-18.22(6)"b" Rule 187-18.22(6)"e" Rule 187-18.3(2) Rule 187-18.4 Rule 187-18.7 Rule 187-18.8The following Iowa code references were added to this document. You may click a reference to view related notices.
Iowa Code 17A Iowa Code 535B Iowa Code 535B.4 Iowa Code 535B.5 Iowa Code 535B.6A Iowa Code 535B.9 Iowa Code 535DThe following keywords and tags were added to this document. You may click a keyword to view related notices.
Application file Application for license Application log Changes in the licensee’s business; fees Grounds for approval or denial Loan file Loan register Mortgage call reports Notice of significant events© 2024; State of Iowa | Privacy Policy