Code of Colorado Regulations
700 - Department of Regulatory Agencies
725 - Division of Real Estate
4 CCR 725-3 - MORTGAGE LOAN ORIGINATORS AND MORTGAGE COMPANIES
Chapter 1 - DEFINITIONS

Universal Citation: 700 CO Code Regs 1

Current through Register Vol. 47, No. 17, September 10, 2024

1.1. Active: A current, Valid license that allows a person to engage in residential mortgage loan origination activities.

1.2. Address: The street address, city, state and postal code.

1.3. Advertisement: Has the same meaning as set forth in 12 C.F.R. § 1026.2(a)(2) as incorporated by reference in Rule 1.39.

1.4. Applicant: A natural person that submits an application to the Board to perform the activities of a Mortgage Loan Originator.

1.5. Application: Has the same meaning as set forth in 12 C.F.R. § 1026.2(a)(3) and 12 C.F.R.§ 1024.2(b) as incorporated by reference in Rule 1.39.

1.6. Board: The Board of Mortgage Loan Originators as defined pursuant to section 12-10-702(3), C.R.S.

1.7. Board Insurance Policy: The qualified insurance carrier contracted by the Board to offer a group policy of errors and omissions insurance pursuant to section 12-10-707, C.R.S. The qualified insurance carrier of the Board Insurance Policy may be found on the Division's website.

1.8. Bona Fide Nonprofit Organization: An organization that complies with the following criteria:

A. Has the status of tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1986, incorporated by reference in compliance with Section 24-4-103 (12.5), C.R.S., and does not include later amendments or editions of the Code. A certified copy of the Code is readily available for public inspection at the offices of the Board of Mortgage Loan Originators at 1560 Broadway Suite 925, Denver, Colorado. The Internal Revenue Code of 1986 may be examined at the internet website of the Internal Revenue Service at www.irs.gov. The Internal Revenue Service may also be contacted at 1999 Broadway, Denver, Colorado 80202 or by telephone at (303) 446-1675;

B. Promotes affordable housing or provides homeownership education, or similar services;

C. Conducts its activities in a manner that serves public and charitable purposes, rather than commercial purposes;

D. Receives funding and revenue and charges fees in a manner that does not incentivize it or its Employees to act other than in the best interests of its clients;

E. Compensates its Employees to act only in the best interests of its clients; and

F. Provides or identifies for the borrower residential mortgage loans with terms favorable to the borrower and comparable to mortgage loans and housing assistance provided under the government housing assistance programs.

1.9. Business Day: Has the same meaning as set forth in 12 C.F.R. § 1026.2(a)(6) and 12 C.F.R.§ 1024.2(b) as incorporated by reference in Rule 1.39.

1.10. Business Name: The company for which individuals who originate a mortgage, offer to originate a mortgage, act as a mortgage loan originator, or offer to act as a mortgage loan originator are officers, partners, members, managers, owners, exclusive agents, contractors, independent contractors or Employees.

1.11. Colorado Lock-in Disclosure: means the Colorado Lock-in Disclosure form created by the Board of Mortgage Loan Originators. This form is to be used for any loan application or transaction that is not under the authority of the TILA-RESPA Integrated Disclosure Rule as defined and incorporated by reference in Board Rule 1.39. This disclosure may be found on the Division of Real Estate's Website. A mortgage loan originator may use an alternate form if the alternate form includes all information required on the Colorado Lock-in Disclosure form, as determined by the Board.

1.12. Consumer Credit: may be either closed-end or open-end credit. It is credit that is extended primarily for personal, family, or household purposes. It excludes business and agricultural loans, and loans exceeding $25,000 that are not secured by real property or a dwelling. It also must be extended by a "creditor".

1.13. Director: The Director of the Division as defined pursuant to section 12-10-101(1), C.R.S.

1.14. Division: The Colorado Division of Real Estate as defined pursuant to section 12-10-101(2), C.R.S.

1.15. Employee: An individual whose manner and means of performance of work are subject to the right of control of, or are controlled by, a person, and whose compensation for federal income tax purposes is reported, or required to be reported, on a W-2 form issued by the controlling person.

1.16. Family Member: A person who is related by blood, marriage, civil union, or adoption.

1.17. Fee: The prescribed non-refundable license fee as set by the Division.

1.18. Good Faith Estimate Disclosure: Is the same disclosure form established in the Real Estate Settlement Procedures Act, specific to Regulation X, Appendix C as incorporated by reference in Rule 1.39.

1.19. Housing Finance Agency: An authority that is chartered by the State of Colorado to help meet the affordable housing needs of the residents of Colorado; is supervised directly or indirectly by the state government; is subject to audit and review by the State of Colorado; and whose activities make it eligible to be a member of the National Council of State Housing Agencies.

1.20. HUD Approved Housing Counseling Agency: is an agency which is either a private or public nonprofit organization that is exempt from taxation under Section 501(a) pursuant to Section 501(c), of the Internal Revenue Code of 1996, 26, U.S.C. 501(a) and 501(c), and approved by the U.S. Department of Housing and Urban Development, in accordance with Housing Counseling Program Handbook 7610.1 and Code of Federal Regulations Title 24, Part 214.

1.21. Inactive: A Mortgage Loan Originator who holds a Valid license shown in the Board's records as being Inactive is not permitted to engage in residential mortgage loan origination activities. To maintain licensure on Inactive status, a Mortgage Loan Originator must still continue to renew their license and meet the continuing education requirements as set forth in Chapters 3 and 4 of these Rules.

1.22. Independent Contractor: An individual who performs his or her duties other than at the direction of and subject to the supervision and instruction of an individual who is licensed by the Board or is not required to be licensed based on one of the following:

A. The individual is lawfully registered with, and maintains a unique identifier through, the Nationwide Mortgage Licensing System and Registry, and who is an Employee of:
1. A depository institution;

2. A subsidiary that is:
a. Owned and controlled by a depository institution; and

b. Regulated by a Federal banking agency; or

3. An institution regulated by the Farm Credit Administration; or

B. An individual who is an Employee of a federal, state, or local government agency or housing finance agency and who acts as a loan originator only pursuant to his or her official duties as an Employee of a federal, state, or local government agency or housing finance agency; or

C. An Employee of a bona fide nonprofit organization who acts as a loan originator only with respect to his or her work duties to the bona fide nonprofit organization, and who acts as a loan originator only with respect to residential mortgage loans with terms that are favorable to the borrower.

1.23. Jurisdiction: All fifty (50) states, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands.

1.24. Loan Modification: A temporary or permanent change in one or more of the terms of a mortgagor's existing loan, allows the loan to be reinstated, and often results in a more affordable mortgage payment. The borrower retains ownership of the real property and the mortgage note and the deed of trust remains intact.

1.25. Loan Modifier: An individual who in the course of the person's business, vocation, or occupation offers to assist, provide, or negotiate on behalf of a borrower to facilitate the receipt of a loan modification from the borrower's current mortgage lender, generally for a fee or other thing of value.

1.26. Mortgage Company: Has the same meaning pursuant to section 12-10-702(12), C.R.S.

1.27. Mortgage Loan Originator or MLO: Has the same meaning pursuant to section 12-10-702(14), C.R.S.

1.28. Nationwide Mortgage Licensing System and Registry or NMLS: A mortgage licensing system developed to track the licensing and registration of mortgage loan originator as further defined in section 12-10-702(15), C.R.S. The system is also known as the Nationwide Multistate Licensing System and Registry.

1.29. Offering or Negotiating Terms of a Residential Mortgage Loan: To present for consideration to a borrower or prospective borrower particular residential mortgage loan terms, or to communicate directly or indirectly with a borrower, or prospective borrower for the purpose of reaching a mutual understanding about prospective residential mortgage loan terms. An individual's generic referral to or recommendation of a particular lender in and of itself, is not offering or negotiating the terms of a residential mortgage loan.

1.30. Petitioner: For the purposes of implementing the provisions of Chapter 7 of these Rules, any person who has filed with the Board a petition or has been granted leave to intervene by the Board for a declaratory order pursuant to section 24-4-105(11), C.R.S. and as set forth in Chapter 7 of these Rules.

1.31. Physical Address: The physical location of the property.

1.32. Practice Act: The Mortgage Loan Originator Licensing and Mortgage Company Registration Act found at section 12-10-701, et. seq., C.R.S.

1.33. Rate: The teaser rate, payment rate or interest rate used to determine a borrower's monthly payment or deferred interest specific to reverse mortgage transactions.

1.34. Responsible Mortgage Loan Originator or Responsible MLO: A Mortgage Loan Originator who holds an Active license and is shown in the Board records as supervising the actions and residential mortgage loan origination activities of the Mortgage Loan Originator holding a temporary license.

1.35. Safe and Secure Manner: Reasonable measures are taken to minimize the risk of loss, damage, or theft.

1.36. Short Sale: The sale of a real property for less than the mortgage loan balance. In the settlement of the short sale transaction the existing mortgage is extinguished. Any deficiency created from the settlement of the transaction may be transformed into a promissory note, charged off, forgiven, or pursued as a judgment against the previous owner.

1.37. Sponsor or Sponsorship: A relationship status as shown in the records of the NMLS between a Mortgage Company and a Mortgage Loan Originator. The Mortgage Loan Originator will only conduct business under the Mortgage Company as shown in the records of the NMLS.

1.38. Taking a Residential Mortgage Loan Application: The receipt of a residential mortgage loan application by an individual for the purpose of facilitating a decision whether to extend an offer of residential mortgage loan terms to a borrower or prospective borrower, whether the application is received directly or indirectly from the borrower or prospective borrower. An individual's generic referral to or recommendation of a particular lender, in and of itself, is not taking a residential loan application.

1.39. TILA-RESPA Integrated Disclosure Rule: means the Consumer Financial Protection Bureau's Integrated Mortgage Disclosures final rule, set forth in 12 C.F.R. § 1024, et seq., the Real Estate Settlement Procedures Act (Regulation X), and in 12 C.F.R. § 1026, et seq., the Truth in Lending Act (Regulation Z), effective October 3, 2015, incorporated by reference in compliance with Section 24-4-103 (12.5), C.R.S., and does not include any later amendments or editions of the final rule. A certified copy of the TILA-RESPA Integrated Disclosure rule is readily available for public inspection at the offices of the Board of Mortgage Loan Originators at 1560 Broadway, Suite 925, Denver, Colorado. The TILA-RESPA Integrated Disclosure rule may be examined at the internet website of the Consumer Financial Protection Bureau at www.consumerfinance.gov. The Consumer Financial Protection Bureau may also be contacted at 1700 G Street, NW, Washington, D.C. 20552 or by telephone at (202)435-7000.

1.40. Truth-in-Lending Disclosure: Is the same disclosure form established by the Truth in Lending Act, specific to Regulation Z, Appendices H-2, H-3, H-4(a), (b), (c) and (d) as incorporated by reference in Rule 1.39.

1.41. Uniform Residential Loan Application: Is the Freddie Mac form 65 or the Fannie Mae form 1003 used in residential loan transactions on properties of four or fewer units.

1.42. Valid: A license that is approved and shown in the Board's records as either Active or Inactive as well as being eligible for renewable status.

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