Arkansas Administrative Code
Agency 003 - DEPARTMENT OF COMMERCE
Division 14 - Arkansas Securities Department
Rule 003.14.02-001 - Amendments to the Rules of the Arkansas Securities Commissioner pertaining to the adoption of Rules 1 and 2 under the Arkansas Mortgage Loan Broker Act
Universal Citation: AR Admin Rules 003.14.02-001
Current through Register Vol. 49, No. 2, February 2024
MORTGAGE LOAN COMPANY AND LOAN BROKER RULES
RULE 1. GENERAL PROVISIONS.
101
DEFINITIONS
Unless the context clearly indicates otherwise, the following definitions shall apply whenever the following terms are used in these Rules, the Mortgage Loan Company and Loan Broker Act, and all forms and orders of the Arkansas Securities Commissioner regarding mortgage loan companies and loan brokers:
(1)
ACT. The
Mortgage Loan Company and Loan Broker Act as set forth in Ark. Code Ann. §
23-39-101 through
23-39-405.
RULE 2 RECORDS AND REPORTS
201 REQUIRED
RECORDS
(A) In addition to any statutory
requirement regarding records, each registrant shall maintain books, records
and documents sufficient to allow the Commissioner to determine the
registrant's compliance with the Act. The registrant shall maintain all such
records for at least the period of time specified in Ark. Code Ann. §
23-39-204, and shall make them available to the Commissioner or his designee
within 72 hours notice to the registrant. Such records may be maintained in the
form of magnetic tape, magnetic disk or other form of computer, electronic or
microfilm media provided that the means to examine such records in a fashion
acceptable to the Commissioner is available at the office of the registrant.
However, books and records kept in such a manner shall be convertible into
clearly legible, tangible documents within 72 hours of request by the
Commissioner. This time period may be extended for an additional time at the
discretion of the Commissioner. Such books, records and documents shall
include, at a minimum, the following:
(1) A
list of all executed loan applications or executed fee agreements that includes
the following information:
a. The applicant's
name;
b. The date of the
application;
c. The amount of the
initial loan request;
d. The final
disposition of the application (whether funded, denied, etc.) and the date of
such disposition; and
e. The name
of the loan officer or employee processing the application;
(2) A record, such as a cash receipts
journal, of all money received in connection with a mortgage loan showing at
least:
a. The payor's name;
b. The date received;
c. The amount; and
d. The purpose of the receipt including
identification of any related loan;
(3) A general ledger which shows a
description and the balance of each of the mortgage loan company's asset
accounts, liability accounts, equity accounts, income accounts, and expense
accounts;
(4) A general journal in
which all entries to the general ledger, other than those posted in the cash
disbursement journal and cash receipts journal, are posted;
(5) A sequential listing of checks written
for each bank account, such as a cash disbursement journal, relating to the
registrant's business as a mortgage loan company or loan broker showing at
least:
a. The Payee's name;
b. The amount;
c. The date; and d. The purpose of the
payment including identification of any related loan;
(6) Bank activity source documents for the
registrant's business including receipted deposit tickets, numbered receipts
for cash, bank account statements, paid checks, and bank advices;
(7) An escrow and/or trust subsidiary ledger
for each borrower that deposits trust funds showing:
a. The borrower's name or co-borrowers'
names;
b. The loan number, if
any;
c. The Amount
received;
d. The purpose for the
amount received;
e. The date
received;
f. The date deposited
into the trust account;
g. The
amount disbursed;
h. The date of
disbursement;
i. The payee of such
disbursement;
j. The purpose of
such disbursement; and
k. The
balance;
(8) A file for
each application for a mortgage loan containing:
a. The agreement with the customer concerning
the broker's services, whether as a loan application or fee agreement,
including commitment and lock-in agreements where applicable;
b. A document showing the final disposition
of the application, such as a settlement statement or a denial or withdrawal
letter;
c. All correspondence sent
or received by the registrant;
d.
All contracts, agreements, and escrow instructions to or with any
depository;
e. Documents showing
compliance with the Consumer Credit Protection Act disclosure requirements (
15 U.S.C.
§§
1601 through
1666j
) and the Real Estate Settlement Procedures Act disclosure requirements (
12 U.S.C. §§
2601 through
2617 ), to
the extent applicable;
f. If the
loan is closed in the mortgage loan company or loan broker's name, a copy of
all closing documents including the closing instructions, any applicable
rescission notice, HUD-1 settlement statement, final truth-in-lending
disclosure, executed note, executed deed of trust or mortgage, and each
assignment of beneficial interest by the registrant; and
g. An itemized list of all fees taken in
advance including appraisal fee, credit report fee, and application
fee;
(9) A copy of all
advertising relating to the registrant's business in Arkansas;
(10) A copy of all governmental or regulatory
reviews;
(11) If the registrant is
not a natural person, a file containing:
a. A
copy of the organizational documents for the registrant with any amendments
thereto;
b. All minutes of meetings
of directors', shareholders', partners', or similar parties';
c. A record, such as a stock or ownership
transfer ledger, showing ownership of all proportional equity interests in the
registrant, ascertainable as of any given record date; and
d. All Franchise Tax Reports or Annual
Reports required by law to be filed;
(12) If the registrant or any person owning
or controlling directly or indirectly 20% or more of the registrant has a
felony conviction, a copy of the judgment or other record of
conviction;
(13) If the registrant
or any person owning or controlling directly or indirectly 20% or more of the
registrant has, in the previous 7 years, been named as a defendant in any civil
suit, a copy of the complaint, any answer filed by the registrant or person,
and any judgment, dismissal, or other final order disposing of the
action;
(14) A copy of each broker
agreement or independent contractor agreement that has been entered into with
an investor or organization that funds the loans;
(15) A file containing copies of all
complaint letters or correspondence received; and
(16) A balance sheet and income statement
prepared in accordance with generally accepted accounting procedures.
(B) All of the books and records
set forth in subparagraph (A) above shall be kept current on at least a monthly
basis, except those set forth in subparagraph (A)(16), which shall be prepared
and kept current on at least a quarterly basis.
(C) All of the books and records required
under subparagraph (A) shall be kept in either the registrant's home office or
in its principal place of business located in Arkansas unless the Commissioner
approves, in writing, a different location. Each registrant shall notify the
Commissioner at the time of application for registration or renewal of
registration of the location of its books and records. In addition, a copy of
the records set forth in subparagraph (A)(8) shall be maintained in the branch
office where the loan was originated if different than the office in which all
of the records are kept.
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