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Colorado Modifies Statutes related to Mortgage Loan Originators
By Robert Harrison, J.D.
The state of Colorado amended state statutes governing mortgage loan originators in order to conform more closely to applicable Federal laws.
Colorado Revised Statutes 12-61-907(1) has been amended to change the amount of the surety bond required from $25,000 to an amount prescribed by the board by rule and the surety bond may be held by the individual mortgage loan originator or the company by which they are employed.
Colorado Revised Statutes 12-61-911 has been repealed
- Colorado Revised Statutes 12-61-903(3)(a) has been amended; Each applicant for a mortgage loan originator license must have completed an approved mortgage lending fundamentals course of at least 9 hours of instruction and must have completed a written exam approved by the board. For the state specific test that is required the board may adopt the uniform state test administered through the NMLS.
- Colorado Revised Statutes 12-61-904(1)(b) has been amended; to exclude from the exemptions in part 9 of the section; a Parent who is acting as a loan originator in providing loan financing to his or her child with respect to a residential mortgage loan.
- Colorado Revised Statutes 12-61-905.5 has been amended and added to; the board now shall investigate the activities of any mortgage loan originator upon its own motion or the complaint in writing of any person. Previously the board was not compelled to investigate and the decision whether of whether or not to investigate was up to the board. Provisions were also added to broaden the grounds for discipline; The board has the power to impose discipline in a number of ways and can now do so for more reasons including:
- Engaging in unfair and deceptive practice
- Obtaining property by fraud or misrepresentation
- Entering into a contract where the originator can receive compensation even though no loan is actually originated
- Soliciting, advertising, or contracting for financing terms that are not actually available at the time
- Failing to make a disclosure to a loan applicant in accordance with applicable state and federal laws
- Making false or deceptive statements about financing terms
- Failing to comply with the Truth In Lending Act, Real Estate Settlement Procedures Act of 1974, as well as various other state and federal regulation.
- Failing to pay 3rd party providers in a timely manner
- Collecting fees prohibited by SECTION 12-61-914 OR 12-61-915
These provisions are effective on August 10, 2016. A link to the complete text of Colorado House Bill 16-1306 can be found in the PDF version of this article on our website.
About the Author
Robert Harrison, J.D. is a Regulatory Compliance Consultant at Bankers Advisory. He is a graduate of Boston University and earned his Juris Doctor at the Boston University School of Law. Robert is admitted to the Bar in Massachusetts. He can be reached at robert.harrison@bankersadvisory.com
Robert Harrison, J.D. is a Regulatory Compliance Consultant at Bankers Advisory. He is a graduate of Boston University and earned his Juris Doctor at the Boston University School of Law. Robert is admitted to the Bar in Massachusetts. He can be reached at robert.harrison@bankersadvisory.com