DEPARTMENT OF REGULATORY AGENCIES

DIVISION OF REAL ESTATE

MORTGAGE LOAN ORIGINATORS

4CCR 725-3

1-1-2 MORTGAGE LOAN ORIGINATOR 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. 	1-1-2 Mortgage Loan Originator Temporary License
Section 5.	Effective Date

Section 1. 	Authority

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

The notice proposes to update rule 1-1-2.  The rule establishes a temporary license for mortgage loan originators.

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 loan originators to hire unlicensed mortgage loan originators 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 applies to mortgage loan originators as that term is defined in § 12-61-902(6), C.R.S. and includes those persons who originate a mortgage, offer to originate a mortgage, act as a mortgage loan originator, or offer to act as a mortgage loan originator.  This rule applies to all individuals required to be licensed pursuant to §§ 12-61-902 and 12-61-903, C.R.S. 

Section 4.	1-1-2 Mortgage Loan Originator Temporary License

1.	  	Mortgage loan originators 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 surety bond as required by § 12-61-907, C.R.S. and in accordance with any rule of the Director that directly or indirectly addresses surety bond requirements;

c.	Acquisition of the errors and omissions insurance required by § 12-61-903.5, C.R.S. and in accordance with any rule of the Director that directly or indirectly addresses errors and omissions insurance requirements;

d.	Completion of the mortgage loan originator application; and

e.	Payment of the application fee established by the Director.

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

a.	Licensed mortgage loan originators who employ and sponsor such an unlicensed mortgage loan originator shall be held responsible under all applicable provisions of law, including without limitation this part 9 and § 38-40-105, C.R.S., for the actions of the unlicensed mortgage loan originator to whom a temporary license has been assigned, and are personally subject to all applicable penalties under the law.

i.	Licensed mortgage loan originators 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 loan originators.  Sponsoring mortgage brokers or mortgage loan originators shall complete the Mortgage Broker Temporary License Update Form, found on the Division of Real Estate website at http://www.dora.state.co.us/real-estate/mortgage/MBForms.htm, and forward to the Division of Real Estate, in a manner acceptable to the Director, all other information required for the possible receipt of a temporary license.

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

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

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

5.	Individuals seeking a temporary license shall complete the paper version of the  
mortgage broker or mortgage loan originator license application posted on the Division of Real Estate’s website at http://www.dora.state.co.us/real-estate/mortgage/MBForms.htm. 

6.	Temporary licensees shall request on the application that the Director inactivate their temporary license 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 loan originator license application.

7.	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.

8.	Once the applicant fully complies with the terms of the law as determined by 
the Director, the Director shall license the applicant in accordance with § 12-61-903, C.R.S.  

9.	Due to the changes defined in this rule, the names of temporary licensees will be posted to the Division of Real Estate website at http://www.dora.state.co.us/real-estate/mortgagebrokerregistration.htm. 

Section 5. 	Effective Date

This permanent rule shall be effective August 6, 2009.