DEPARTMENT OF REGULATORY AGENCIES
DIVISION OF REAL ESTATE
MORTGAGE BROKERS
4 CCR 725-3

NOTICE OF PROPOSED RULEMAKING HEARING
February 12, 2008

The Director of the Division of Real Estate will hold a public hearing on February 12, 2008, at the Colorado Division of Real Estate, 1560 Broadway, Suite 925, Denver, Colorado, 80202, beginning at 9:00 a.m. in the conference room. 

The full text of the proposed rules will be available for review approximately one week prior to the hearing on the internet at www.dora.state.co.us/real-estate/rulemaking/index.htm.  Additionally, written comments may be submitted to the Division of Real Estate, 1560 Broadway, Suite 925, Denver, Colorado, 80202, 303.894.2166, fax 303.894.2683. 

1-3-1 Errors and Omissions Rule 

The Director of the Division of Real Estate proposes to adopt the following permanent rule entitled, Errors and Omissions Insurance for Mortgage Brokers, according to her authority as found in §§ 12-61-910.3.  Section 12-61-903.5, C.R.S. requires the Director to determine the terms and conditions of coverage required, including the minimum limits of coverage, the permissible deductible and permissible exemptions.  The purpose of this rule is to define the terms and conditions of the requisite errors and omission coverage.

8-1-1 Advertising Rule 

The Director of the Division of Real Estate seeks to adopt the following permanent rule entitled, Mortgage Broker Advertising, according to her authority as found in § 12-61-910.3, C.R.S.  Section 12-61-910.4, C.R.S., states the Director shall adopt rules regarding the marketing of nontraditional mortgages by mortgage brokers.  In adopting such rules, the Director is required to incorporate appropriate provisions of the final “Interagency Guidance on Nontraditional Mortgage Product Risks” released on September 29, 2006.  Section 12-61-911(1)(j), C.R.S., in summary, prohibits mortgage brokers from failing to comply with the Truth in Lending Act.  The Truth in Lending Act defines specific requirements for advertising.  The purpose of this rule is to ensure that individuals who broker a mortgage or act as a mortgage broker are familiar with all current regulations that address advertising and to ensure the advertising of nontraditional mortgage products is addressed.

5-1-2 Mortgage Broker Disclosures

The Director of the Division of Real Estate seeks to adopt the following permanent rule entitled, Mortgage Broker Disclosures, according to her authority as found in § 12-61-910.3, C.R.S.  Section 12-61-914, C.R.S. requires mortgage brokers, within three business days after receipt of a loan application or any moneys from a borrower, to disclose specific details of a loan transaction to the borrower.  Some of these details include, but are not limited to: the annual percentage rate; finance charge; amount financed; total amount of all payments; third party costs; and terms of a lock-in agreement.  The Director has learned that uncertainty exists in the mortgage industry regarding some of the requisite disclosures.  The purpose of this rule is to ensure that these disclosures, set forth in § 12-61-914, C.R.S., are met and that borrowers are provided with accurate and clear disclosures regarding their mortgage loan transaction.