Arkansas Modifies Fair Mortgage Lending Act Provisions
by: Matthew Dailey
On January 10, the Arkansas Securities Department finalized amendments to the Rules of the Fair Mortgage Lending Act. The provisions are effective as of February 9, 2014. The following is a summary of the changes.
RULE 5010-1 Licensee Duties-Servicing
For new loans and transferred loans, payment instructions must be in the form and content acceptable to the Department that the mortgage servicer is licensed in Arkansas and that the complaints about the mortgage servicer may be submitted to the Department.
RULE 5011-2 Escrow Funds or Trust Accounts Records Requirements
Each licensee shall maintain compliance records in a format that is compatible with the electronic examination software and is in a form acceptable to the Commissioner. Also, the licensee must maintain a list of all mortgage applications or fee agreements and include a record of all monies received from a borrower for fees to be paid to third parties for services in connection with the loan. Any other document on which the licensee relied on in underwriting the loan must also be kept and available.
As part of the revised rule, mortgage servicers must also keep a file for each Arkansas mortgage loan serviced containing the name and NMLS license number for the originating lender, optional insurance, copies of all notices sent to the borrower related to any foreclosure proceeding filed against the property securing the loan and a record of the final disposition of the loan including release or transfer documents.
Finally, there must be readily available a copy of the licensee’s Anti-Money Laundering Program including policy and procedures and proof of training of the Program with all employees.
RULE 5013- Prohibited Activities
Any advertising that indicates the consumer’s ability or likelihood to obtain a refinancing or modification of any mortgage credit product or term including any preapproval or guarantees, is prohibited.
About the Author
Matthew Daily is Regulatory Compliance Consultant at Bankers Advisory, Inc. He is a graduate of Stonehill College and earned his Juris Doctor at the New England School of Law. He is admitted to the Massachusetts Bar. Matthew can be reached at matthew@bankersadvisory.com
Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.
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