The Arkansas Securities Department (Department) recently amended provisions to the Rules of the Fair Mortgage Lending Act (Rules) that became effective on February 9, 2014. The new Rules concern the licensing of loan officers and mortgage brokers, servicing disclosure requirements, and record-keeping requirements, among other things. The changes the amendments made to the Rules are as follows:
• A person may be considered to be a loan officer or mortgage broker and be required to obtain licensing if he or she refers a consumer to a loan officer or mortgage broker and the person receives compensation from a mortgage broker or mortgage banker.
• Servicing disclosures for new and transferred loans are required to include any notice required under federal law or regulation, as well as a notice in the form and content acceptable to the Department that the mortgage servicer is licensed in Arkansas and that complaints about the mortgage servicer may be submitted to the Department.
• Licensees regulated by the Rules must maintain their records in a format compatible with electronic examination software and in a form acceptable to the Commissioner. In addition, the list of all mortgage loan applications or executed fee agreements maintained by licensed mortgage brokers and mortgage bankers must include the NMLS number of the entity that funded the loan and a record of all monies received from a borrower for fees to be paid to third parties for services related to the loan. A mortgage broker must also maintain any document on which it relied in underwriting the loan.
• Advertising that indicates the consumer's ability or likelihood to obtain any mortgage credit product or term, or obtain a refinancing or modification of any mortgage credit product or term, is prohibited. This includes advertising that contains misrepresentations of whether the consumer has been preapproved or guaranteed for any such refinancing or modification.