Current through Register Vol. 47, No. 6, September 18, 2024
(1)
General record requirements. A licensee must keep records that
allow the administrator to determine the licensee's compliance with relevant
statutes and regulations.
a. The licensee may
keep the records as a hard copy or in an electronic equivalent.
b. The licensee shall keep records for at
least 36 months from the date of the final transaction with the borrower or a
party in a real estate transaction.
c. The licensee shall maintain all books and
records in good order and shall produce books and records for the administrator
upon request. Failure to produce such books and records within 30 days of the
administrator's request may be grounds for disciplinary action against the
licensee.
d. The obligation to
maintain records continues even after the licensee ceases business operations
in Iowa and turns in or surrenders its license. The owners and directors of the
licensee are responsible for ensuring this requirement is met.
e. Effective January 1, 2012, mortgage
bankers and mortgage brokers shall have the capability to provide information
on the characteristics of loan originations as described in subrule 18.16(11)
in an electronic format prescribed by the administrator within 30 days of:
(1) The end of each calendar quarter or some
other regular interval determined by the administrator; or
(2) Notice from the administrator in the case
of an examination.
(2)
Required records.
a. A mortgage broker shall keep an index,
application log, and application files.
b. A mortgage banker shall keep an index,
application log, application files, loan register, and loan files. If the
mortgage banker also services loans, the mortgage banker must also keep account
ledgers.
c. A mortgage banker who
only services loans needs to keep only an index, a loan register, loan files,
and account ledgers.
d. A closing
agent shall keep the general business records outlined in subrule 18.16(9). The
general business records are records relating to the closing agent's general
business and do not include records relating to individual customer files. A
closing agent shall also keep the following records relating to individual
files:
(1) A closing register containing the
information outlined in subrule 18.22(5); and
(2) A closing file containing the information
outlined in subrule 18.22(6).
(3)
Index. All mortgage
banker and mortgage broker records shall be accessible by the borrower's name
(including the name of any endorser, comaker, or surety who is indebted to the
lender) and account number.
(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; name of the broker, the lender,
and the mortgage loan originator, as applicable, including the unique 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.
(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 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.
(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 identification number assigned to each.
(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 identification
number assigned to each.
(8)
Account ledger. A mortgage banker licensee shall maintain an
account ledger for each loan that is serviced, which shall include the
following information:
a. The name and address
of the borrower, loan number, loan date, payment terms, maturity date,
principal amount of loan, amount financed, total of payments, property listed
as security, and distribution of the loan proceeds.
b. The transaction history. Payments shall be
posted to the account ledger effective the date payments were received. Payment
entries will show the date payment was received, the total amount of the
payment, and a description of how the payment was applied to the borrower's
account (amount applied to principal, interest, escrow, late fees, or
additional written description). Other transactions shall be fully described.
Corrections to the transaction history shall be made by corrective entry and
not by erasure.
c. The remaining
balances due from the borrower, including principal, escrow, late fees, and
other charges.
d. Any change to the
interest rate and the effective date of that change.
e. Full descriptions of payments made outside
the normal course of business, for example, payments made by the sale of
security, insurance claim, or endorser. For any payments made by death claims
on credit insurance, the date of death shall be noted in the account ledger.
f. When a loan is prepaid in full,
the dates and amounts of any rebates made to the borrower including escrow
rebates and the refunds of unearned insurance premiums.
(9)
General business
records. A licensee must keep the following general business records
for at least 36 months:
a. All checkbooks,
check registers, bank statements, deposit slips, withdrawal slips, and canceled
checks (or copies thereof) relating to the mortgage or real estate closing
business of the licensee.
b.
Complete records (including invoices and supporting documentation) for all
expenses and fees paid on behalf of each mortgage applicant, including a record
of the date and amount of all such payments actually made by each mortgage
applicant.
c. 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 a
licensee in connection with the conduct of the mortgage lending or real estate
closing business.
d. All
correspondence and other records relating to the maintenance of any surety bond
required by Iowa Code chapter 535B.
e. Copies of all contractual arrangements or
understandings with third parties in any way relating to the provision of
mortgage lending services or real estate closing services (including, but not
limited to, any delegations of underwriting authority, any agreements for
pricing of goods or services, any investor contracts, any employment
agreements, and any noncompete agreements).
f. Copies of all reports of audits,
examinations, inspections, reviews, investigations, or other similar functions
performed by any third party, including but not limited to the administrator or
any other regulatory or supervisory authority.
g. Copies of all advertisements and
solicitations concerning mortgage business directed at Iowa residents,
including advertisements and solicitations on the Internet or by other
electronic means, in the format (e.g., recorded sound, video, print) in which
the advertisements and solicitations were published or distributed.
(10)
Disposal of
records. If the licensee or former licensee disposes of records at the
end of the retention period, the licensee or former licensee shall dispose of
the records in a reasonable manner that safeguards any identification
information, as defined in Iowa Code section
715A.8(1)
"a." The owners and directors of licensees and former
licensees are responsible for ensuring this requirement is met.
(11)
Loan records required to be
maintained electronically.
a.
Effective January 1, 2012, mortgage bankers and mortgage brokers shall maintain
the following records electronically in a format prescribed by the
administrator:
(1) Information sufficient to
identify the mortgage loan and the unique identifier of the mortgage loan
originator, the mortgage broker (if applicable), and the lender for the
loan.
(2) Information sufficient to
enable a computation of key items in the federal truth-in-lending disclosures,
including the annual percentage rate, the finance charge, and a schedule of
payments, and any deviations between the final disclosures and the most recent
disclosures issued prior to the final disclosures.
(3) Information included in the 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.
(4) Information included in the final closing
disclosure.
(5) Information related
to the terms of each loan, including adjustable rate loan features (including
timing of adjustments, indices used in setting rates, maximum and minimum
adjustments, floors and ceilings of adjustments), the undiscounted interest
rate (if maintained by the lender in an electronic format), penalties for late
payments, and penalties for prepayment (including computation of the penalty
amount, the duration of prepayment penalty, and the maximum amount of
penalty).
(6) Information typically
used in underwriting, including the appraised value of the property, the sales
price of the property (if a purchase loan), each borrower's income, the monthly
payment amount, the housing debt-to-income ratio, the total debt-to-income
ratio, and the credit score of each borrower.
(7) Information included in a Loan
Application Register for mortgage lenders required to submit information
pursuant to the federal Home Mortgage Disclosure Act.
b. Mortgage brokers shall provide information
identified in paragraph 18.16(11) "a" unless such information is not prepared
or known by the mortgage broker and the mortgage broker does not reasonably
have access to the information in an electronic format.
c. The administrator shall permit mortgage
bankers and mortgage brokers to utilize compatible third-party software to
provide information required under this subrule.
