DEPARTMENT OF REGULATORY AGENCIES

DIVISION OF REAL ESTATE

MORTGAGE BROKERS

4CCR 725-3

MORTGAGE BROKER TEMPORARY LICENSE

Pursuant to and in compliance with Title 12, Article 61 and Title 24, Article 4, C.R.S. as amended, notice of proposed rulemaking is hereby given, including notice to the Attorney General of the State of Colorado, and to all persons who have requested to be advised of the intention of the Director of the Colorado Division of Real Estate to promulgate rules.

Section 1. 	Authority
Section 2.	Scope and Purpose
Section 3. 	Applicability
Section 4. 	Rules Regarding a Mortgage Broker Temporary License
Section 5.	Effective Date

Section 1. 	Authority

The statutory basis for this rule, entitled Mortgage Broker Temporary License, is § 12-61-910.3, C.R.S.

The notice proposes to add rule 1-1-2.  The rule establishes a temporary license for mortgage brokers.

Section 2.	Scope and Purpose

Section 12-61-905(10), C.R.S. requires the Director of the Division of Real Estate to promulgate rules that allow licensed mortgage brokers to hire unlicensed mortgage brokers under temporary licenses.  The purpose of this regulation is to define the parameters under which an individual may receive a temporary license.

Section 3.	Applicability

This rule governs individuals who broker a mortgage, offer to broker a mortgage, act as a mortgage broker or offer to act as a mortgage broker and is not intended for individuals who remain exempt from licensing pursuant to § 12-61-904, C.R.S. (2007). 

Section 4.	Rules Regarding a Mortgage Broker Temporary License

1.	  	Mortgage brokers demonstrating to the Director a good-faith effort to comply  
with the requirements pursuant to § 12-61-901, et seq., C.R.S. may be issued a temporary license upon completion of the requirements set forth below.

a.	Prior to submitting an application, a set of fingerprints for a criminal history record check must be submitted to the Colorado Bureau of Investigation (CBI);

b.	Acquisition of a $25,000.00 surety bond as required by § 12-61-907, C.R.S. or the alternative to the surety bond as defined by rule;

c.	Acquisition of the errors and omissions insurance required by § 12-61-903.5, C.R.S. and in compliance with the terms and conditions defined by rule;

d.	On or after January 1, 2009, completion of the required pre-licensing education and the required written examination required by the Director;

e.	Completion of the mortgage broker application; and

f.	Payment of the fee established by the Director for the issuance of a license.

2.	 	Only individuals who hold and maintain a mortgage broker license may hire 
unlicensed mortgage brokers under the temporary license provision.

a.	Licensed mortgage brokers who employ such an unlicensed mortgage broker shall be held responsible under all applicable provisions of law, including without limitation this part 9 and section 38-40-105, C.R.S., for the actions of the unlicensed mortgage broker to whom a temporary license has been assigned.

i.	Licensed mortgage brokers shall notify the Division of Real Estate, in a manner acceptable to the Director, of exact dates of hire and termination of employment for unlicensed mortgage brokers.

ii.	Licensed mortgage brokers shall be held responsible for the activity of an unlicensed mortgage broker through and including the date of termination and required notification of such termination to the Division of Real Estate. 

b.	Temporary licenses shall expire 120 days after completion of the mortgage broker license application or when the temporary license is terminated by a licensed mortgage broker with whom the temporary licensee is operating under.

c.	Individuals seeking temporary licenses shall be granted one temporary license.  Additional or extended temporary licenses shall be prohibited.

3.	 	Temporary licenses will expire upon determination by the Director that the 
requirements of the law have not been met.  Applicants shall be notified via e- 
mail, fax or U.S. mail to the contact information provided to the Division of Real Estate in the applicant’s mortgage broker license application.

4.	 	Temporary licenses issued by the Director will remain in effect for 120 days after  
completion of the mortgage broker license application, unless the Director issues the applicant a full license, or unless the Director determines the license to be expired for failure to comply with the requirements to obtain a temporary license, set forth in this regulation.

5.	 	Any temporary license issued by the Director shall have the same force and effect 
of the license required by § 12-61-901, et seq., C.R.S. for the period of time it is in effect.

6.	 	Once the applicant fully complies with the terms of the new law as determined by 
the Director, the Director shall license the applicant in accordance with § 12-61-903, C.R.S.  The date this occurs will be the applicant’s anniversary date for purposes of compliance with the licensing and education requirements of  § 12-61-903, C.R.S.

Section 5.	Effective Date

This permanent rule becomes effective January 1, 2008.