DEPARTMENT OF REGULATORY AGENCIES

DIVISION OF REAL ESTATE

MORTGAGE BROKERS OR MORTGAGE LOAN ORIGINATORS

EMERGENCY RULE

4 CCR 725 -3

TEMPORARY LICENSES – REPEALING THE EDUCATION AND TESTING REQUIREMENTS

Section 1.	Authority
Section 2.	Scope and Purpose
Section 3.	Applicability
Section 4. 	Rules Regarding Temporary Licenses – Repealing the Education and Testing Requirements
Section 5. 	Enforcement
Section 6. 	Effective Date

Section 1. 	Authority

The Director of the Division of Real Estate adopts the following emergency rule entitled, Temporary Licenses – Repealing the Education and Testing Requirements, according to her authority as found in §§ 12-61-910.3, 12-61-905(10) and 24-4-103(6), C.R.S.

Section 2.	Scope and Purpose

The Director finds that immediate adoption of this rule is imperatively necessary for the preservation of public health, safety or welfare and that compliance with the rulemaking requirements of § 24-4-103, C.R.S., applicable to non-emergency rules, would be contrary to the public interest.

The Director has learned through discussions with representatives from the mortgage industry that current economic challenges have made it more difficult for consumers to acquire mortgage related financing.  Specifically, mortgage brokers or mortgage loan originators who work for depository institutions that have gone out of business find this environment increasingly difficult to provide financing to their clients, many of which have pending transactions.  Current temporary licensing provisions require mortgage brokers or mortgage loan originators to complete 40 hours of course work and pass the requisite test.  The amount of time associated with this requirement, in some instances, may come at the detriment of Colorado consumers.  Additionally, current temporary license provisions require that a licensed mortgage broker or mortgage loan originator sponsor a pending applicant into temporary licensure.  The sponsoring mortgage broker or mortgage loan originator is accountable and responsible for all transactions and conduct of their temporary licensee.

As a result, the Director adopts this emergency rule in order to repeal the education and testing requirements as a precursor to applying for and possibly receiving a temporary license.  The purpose of this rule is to repeal the education and testing requirements in order to receive a temporary license and to clearly notify the mortgage industry of such change.

Without the immediate adoption of this emergency rule, the public’s interest is not served.  Wherefore, the Director, pursuant to § 24-4-103(6), C.R.S. has an obvious and stated need to adopt this rule.

Section 3.	Applicability

This rule applies to mortgage brokers or mortgage loan originators as that term is defined in § 12-61-902(5), C.R.S. and includes those persons who originate a mortgage, offer to originate a mortgage, act as a mortgage broker or mortgage loan originator, or offer to act as a mortgage broker or 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. 	Rules Regarding Temporary Licenses – Repealing the Education and Testing Requirements

1.	Upon adoption of this emergency rule, as referenced in Section 6 of this rule, mortgage brokers or mortgage loan originators are not required to complete the required classes or pass the requisite test developed and approved by the Director in order to apply for and possibly receive a temporary license.

2.	Mortgage brokers or 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 broker or mortgage loan originator application; and

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

3.	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. 

4.	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 mortgage loan originator with whom the temporary licensee is operating under.

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

6.	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. 

7.	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.

8.	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.

9.	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.  

10.	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.	Enforcement

1.	Noncompliance with this rule, whether defined or reasonably implied in the rule, may result in the imposition of any of the sanctions allowable under Colorado law, including, but not limited to:

a.	Revocation;

b.	Refusal to renew a license;

c.	Imposition of fines; and 

d.	Restitution for any financial loss.

Section 6.	Effective Date

This emergency rule shall be effective April 17, 2009.