DEPARTMENT OF REGULATORY AGENCIES
DIVISION OF REAL ESTATE
MORTGAGE LOAN ORIGINATORS AND MORTGAGE COMPANIES
4 CCR 725-3

NOTICE OF PROPOSED PERMANENT RULEMAKING HEARING
November 20, 2013

CHAPTER 2:	Requirements for Licensure

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 Colorado Board of Mortgage Loan Originators (the “Board”) to promulgate rules, or to amend, repeal or repeal and re-enact the present rules of the Board.

STATEMENT OF BASIS

The statutory basis for the rules titled Rules of the Board of Mortgage Loan Originators is Part 9 of Title 12, Article 61, Colorado Revised Statutes, as amended.  

STATEMENT OF PURPOSE

The purpose of this rule is to effectuate the legislative directive to promulgate necessary and appropriate rules in conformity with the state statutes of the Mortgage Loan Originator Licensing and Mortgage Company Registration Act.

SPECIFIC PURPOSE OF THIS RULEMAKING

The specific purpose of this rule is amend or repeal existing rules with respect to the requirements for licensure and ensures that mortgage loan originators and mortgage companies are familiar with current regulations.

Proposed New, Amended and Repealed Rules

[Deleted material shown struck through, new material shown ALL CAPS. Rules, or portions of rules, which are unaffected are reproduced.  Readers are advised to obtain a copy of the complete rules of the Board at www.dora.state.co.us/real-estate/.

CHAPTER 2:	Requirements for Licensure

2.1        AN APPLICANT FOR LICENSURE AS A COLORADO MORTGAGE LOAN  
ORIGINATOR SHALL SUCCESSFULLY COMPLETE THE REQUIREMENTS SET FORTH BELOW:

A.	SUBMIT A SET OF FINGERPRINTS FOR A CRIMINAL HISTORY CHECK TO THE COLORADO BUREAU OF INVESTIGATIONS (CBI) WITHIN 1 YEAR IMMEDIATELY PRECEDING THE DATE OF APPLICATION;

B.	REGISTER WITH THE NATIONWIDE MORTGAGE LICENSING SYSTEM AND REGISTRY IN ACCORDANCE WITH POLICIES AND PROCEDURES ESTABLISHED BY THE NATIONWIDE MORTGAGE LICENSING SYSTEM AND REGISTRY. THIS INCLUDES, BUT IS NOT LIMITED TO COMPLETION OF THE CORRECT REGISTRATION APPLICATION, AUTHORIZATION FOR THE REGISTRY TO PULL A CREDIT REPORT AND PAYMENT OF ANY FEES ASSOCIATED WITH REGISTRATION;

C.	SUBMIT FINGERPRINTS TO THE NATIONWIDE MORTGAGE LICENSING SYSTEM AND REGISTRY IN ACCORDANCE WITH POLICIES AND PROCEDURES ESTABLISHED BY THE NATIONWIDE MORTGAGE LICENSING SYSTEM AND REGISTRY;

D.	COMPLETE THE 20 HOURS OF PRE-LICENSING EDUCATION REVIEWED AND APPROVED BY THE NATIONWIDE MORTGAGE LICENSING SYSTEM AND REGISTRY OR BY A COMPANY CONTRACTED BY THE NATIONWIDE MORTGAGE LICENSING SYSTEM AND REGISTRY FOR THE REVIEW AND APPROVAL OF PRE-LICENSING COURSES;

E.	SUCCESSFUL COMPLETION OF THE S.A.F.E. MORTGAGE LOAN ORIGINATOR EXAMINATION, DEVELOPED BY THE NATIONWIDE MORTGAGE LICENSING SYSTEM AND REGISTRY WHICH WILL CONSIST OF TWO PARTS.  THESE TWO PARTS INCLUDE A NATIONAL COMPONENT AND A COLORADO STATE SPECIFIC COMPONENT.  AN INDIVIDUAL SHALL PASS THE TEST IN ACCORDANCE WITH POLICIES AND PROCEDURES DEVELOPED AND ADMINISTERED BY THE NATIONWIDE MORTGAGE LICENSING SYSTEM AND REGISTRY AND IN COMPLIANCE WITH THE S.A.F.E. MORTGAGE LICENSING ACT;

F.	ACQUISITION OF A SURETY BOND AS REQUIRED BY § 12-61-907, C.R.S. AND IN ACCORDANCE WITH ANY RULE OF THE BOARD THAT DIRECTLY OR INDIRECTLY ADDRESSES SURETY BOND REQUIREMENTS;

G.	ACQUISITION OF THE ERRORS AND OMISSIONS INSURANCE REQUIRED BY § 12-61-903.5, C.R.S. AND IN ACCORDANCE WITH ANY RULE OF THE BOARD THAT DIRECTLY OR INDIRECTLY ADDRESSES ERRORS AND OMISSIONS INSURANCE REQUIREMENTS; 

H.	COMPLETION OF THE COLORADO DIVISION OF REAL ESTATE SPECIFIC MORTGAGE LOAN ORIGINATOR APPLICATION; AND

I.	PAYMENT OF THE APPLICATION FEE ESTABLISHED BY THE BOARD AND IS NON-REFUNDABLE.

2.2        AUTHORITY TO AUDIT EDUCATION PROVIDER
	
THE BOARD OR THE BOARD’S DESIGNEE MAY AUDIT ANY MORTGAGE LOAN ORIGINATOR COURSES OFFERED AND MAY REQUEST FROM EACH EDUCATION PROVIDER OR SCHOOLS OFFERING SUCH COURSES, ALL RELATED INSTRUCTIONAL MATERIALS, STUDENT ATTENDANCE RECORDS AND OTHER INFORMATION THAT MAY BE NECESSARY FOR AN AUDIT. FAILURE TO COMPLY WITH THIS RULE MAY RESULT IN THE WITHDRAWAL OF COURSE APPROVAL.

2.3       RETESTING
	
A.	AN INDIVIDUAL MAY RETAKE A TEST THREE (3) CONSECUTIVE TIMES WITH EACH CONSECUTIVE TAKING OCCURRING AT LEAST THIRTY (30) DAYS AFTER THE PRECEDING TEST.

B.	AFTER FAILING THREE (3) CONSECUTIVE TESTS, AN INDIVIDUAL SHALL WAIT AT LEAST SIX (6) MONTHS BEFORE TAKING THE TEST AGAIN.  

C.	INDIVIDUALS WHO FAIL TO MAINTAIN A VALID LICENSE FOR A PERIOD OF FIVE (5) YEARS OR LONGER SHALL RETAKE THE TEST PRIOR TO RE-APPLICATION, NOT TAKING INTO ACCOUNT ANY TIME DURING WHICH SUCH INDIVIDUAL WAS LICENSED.

2.4  	TEMPORARY LICENSE 

MORTGAGE LOAN ORIGINATORS DEMONSTRATING TO THE BOARD 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.	THE INDIVIDUAL HAS COMPLETED ALL REQUIREMENTS SET FORTH BY THE NATIONWIDE MORTGAGE LICENSING SYSTEM AND REGISTRY, INCLUDING PAYMENT OF REQUISITE FEES,  AND HAS BEEN APPROVED BY THE BOARD OF MORTGAGE LOAN ORIGINATORS ON THE NATIONWIDE MORTGAGE LICENSING SYSTEM AND REGISTRY;

B.	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);

C.	ACQUISITION OF A SURETY BOND AS REQUIRED BY § 12-61-907, C.R.S. AND IN ACCORDANCE WITH ANY RULE OF THE BOARD THAT DIRECTLY OR INDIRECTLY ADDRESSES SURETY BOND REQUIREMENTS;

D.	ACQUISITION OF THE ERRORS AND OMISSIONS INSURANCE REQUIRED BY § 12-61-903.5, C.R.S. AND IN ACCORDANCE WITH ANY RULE OF THE BOARD THAT DIRECTLY OR INDIRECTLY ADDRESSES ERRORS AND OMISSIONS INSURANCE REQUIREMENTS;

E.	COMPLETION OF THE COLORADO DIVISION OF REAL ESTATE SPECIFIC MORTGAGE LOAN ORIGINATOR APPLICATION; AND

F.	PAYMENT OF THE APPLICATION FEE ESTABLISHED BY THE BOARD AND IS NON-REFUNDABLE.

2.5        ONLY INDIVIDUALS WHO ARE LICENSED AS STATE-LICENSED LOAN 
ORIGINATORS MAY HIRE AND SPONSOR UNLICENSED MORTGAGE LOAN ORIGINATORS UNDER THE TEMPORARY LICENSE PROVISION.

A.	LICENSED MORTGAGE LOAN ORIGINATORS WHO EMPLOY AND SPONSOR SUCH A TEMPORARILY LICENSED 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 TEMPORARILY LICENSED MORTGAGE LOAN ORIGINATOR TO WHOM A TEMPORARY LICENSE HAS BEEN ASSIGNED, AND ARE PERSONALLY SUBJECT TO ALL APPLICABLE PENALTIES UNDER THE LAW.

B.	LICENSED MORTGAGE LOAN ORIGINATORS SHALL NOTIFY THE DIVISION OF REAL ESTATE, IN A MANNER ACCEPTABLE TO THE BOARD, OF EXACT DATES OF HIRE AND TERMINATION OF EMPLOYMENT FOR TEMPORARILY LICENSED MORTGAGE LOAN ORIGINATORS.  SPONSORING MORTGAGE LOAN ORIGINATORS SHALL COMPLETE THE MORTGAGE LOAN ORIGINATOR TEMPORARY LICENSE UPDATE FORM, AND FORWARD TO THE DIVISION OF REAL ESTATE, IN A MANNER ACCEPTABLE TO THE BOARD, ALL OTHER INFORMATION REQUIRED FOR THE POSSIBLE RECEIPT OF A TEMPORARY LICENSE.

C.	LICENSED MORTGAGE LOAN ORIGINATORS SHALL BE HELD RESPONSIBLE FOR THE ACTIVITY OF TEMPORARILY LICENSED MORTGAGE LOAN ORIGINATORS THROUGH AND INCLUDING THE DATE OF TERMINATION AND REQUIRED NOTIFICATION OF SUCH TERMINATION TO THE DIVISION OF REAL ESTATE. 

2.6        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 LOAN 
	ORIGINATOR WITH WHOM THE TEMPORARY LICENSEE IS OPERATING 
             UNDER.

2.7        INDIVIDUALS SEEKING TEMPORARY LICENSES SHALL BE GRANTED ONE 
	TEMPORARY LICENSE.  ADDITIONAL OR EXTENDED TEMPORARY LICENSES 
	SHALL BE PROHIBITED.

2.8      TEMPORARY LICENSEES SHALL REQUEST ON THE APPLICATION THAT THE 
	BOARD INACTIVATE THEIR TEMPORARY LICENSE UPON DETERMINATION BY THE 
	BOARD THAT THE REQUIREMENTS OF THE LAW HAVE NOT BEEN MET.  

2.9      ANY TEMPORARY LICENSE ISSUED BY THE BOARD 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.

2.10     ONCE THE APPLICANT FULLY COMPLIES WITH THE TERMS OF THE LAW AS 
	DETERMINED BY THE BOARD, THE BOARD SHALL LICENSE THE APPLICANT IN 
	ACCORDANCE WITH § 12-61-903, C.R.S.  

2.11	PRELIMINARY ADVISORY OPINION

POTENTIAL APPLICANTS FOR A STATE LICENSE OR A REGISTRATION THROUGH THE NATIONWIDE MORTGAGE LICENSING SYSTEM AND REGISTRY MAY SUBMIT INFORMATION IN ORDER FOR THE BOARD OR AN AUTHORIZED REPRESENTATIVE OF THE BOARD TO REASONABLY ASCERTAIN THE LIKELIHOOD OF LICENSE OR REGISTRATION APPROVAL THROUGH A DEFINED PRELIMINARY ADVISORY OPINION PROCESS.

2.12	POTENTIAL APPLICANTS MAY REQUEST A PRELIMINARY ADVISORY OPINION FOR ANY OF THE FOLLOWING REASONS:

A.	IF THE INDIVIDUAL HAS BEEN CONVICTED, PLEAD GUILTY OR NOLO CONTENDERE TO ANY CRIME IN A DOMESTIC, FOREIGN OR MILITARY COURT.

B.	IF THE INDIVIDUAL HAS BEEN ENJOINED IN THE IMMEDIATELY PRECEDING FIVE (5) YEARS UNDER DOMESTIC OR FOREIGN LAWS FROM ENGAGING IN DECEPTIVE CONDUCT RELATING TO THE ORIGINATION OF A MORTGAGE LOAN;

C.	IF THE INDIVIDUAL HAS HAD OTHER PROFESSIONAL LICENSES, CERTIFICATIONS OR REGISTRATIONS ISSUED BY COLORADO, THE DISTRICT OF COLUMBIA, ANY OTHER STATES OR FOREIGN COUNTRIES, REVOKED OR SUSPENDED FOR FRAUD, THEFT, DECEIT, MATERIAL MISREPRESENTATIONS OR THE BREACH OF A FIDUCIARY DUTY AND SUCH SUSPENSION OR REVOCATION DENIED AUTHORIZATION TO PRACTICES AS: A MORTGAGE LOAN ORIGINATOR OR SIMILAR LICENSE; REAL ESTATE BROKER; REAL ESTATE APPRAISER; AN INSURANCE PRODUCER; AN ATTORNEY; A SECURITIES BROKER-DEALER; A SECURITIES SALES REPRESENTATIVE; AN INVESTMENT ADVISOR; OR AN INVESTMENT ADVISOR REPRESENTATIVE; OR

D.	IF THE INDIVIDUAL HAS BEEN ASSESSED A CIVIL OR CRIMINAL PENALTY FOR VIOLATING ANY PROVISION OF THE COLORADO CONSUMER PROTECTION ACT.

2.13	INDIVIDUALS REQUESTING A PRELIMINARY ADVISORY OPINION SHALL COMPLETE THE PRELIMINARY ADVISORY APPLICATION LOCATED ON THE DIVISION OF REAL ESTATE’S WEBSITE.  

2.14	INDIVIDUALS REQUESTING A PRELIMINARY ADVISORY OPINION SHALL SUBMIT ALL CORRESPONDING, OR RELEVANT DOCUMENTS RELATED TO ANY CONDUCT OR ACTIONS AS SET FORTH IN RULE 2.12.  INCOMPLETE REQUESTS WILL NOT BE PROCESSED.  THE BOARD OR AN AUTHORIZED REPRESENTATIVE OF THE BOARD MAY, AT ANY TIME, REQUEST ADDITIONAL INFORMATION REGARDING THE PRELIMINARY ADVISORY OPINION REQUEST.  SUCH CORRESPONDING, RELEVANT OR RELATED DOCUMENTS MAY INCLUDE, BUT ARE NOT LIMITED TO:

A.	POLICE OFFICER REPORTS;

B.	DISPOSITIONS DOCUMENTS;

C.	COURT DOCUMENTS;

D.	ORIGINAL CHARGES DOCUMENTS;

E.	STIPULATED AGREEMENTS; OR

F.	FINAL AGENCY ORDERS. 

2.15	INDIVIDUALS REQUESTING A PRELIMINARY ADVISORY OPINION SHALL SUBMIT A WRITTEN AND SIGNED PERSONAL EXPLANATION AND DETAILED ACCOUNT OF THE FACTS AND CIRCUMSTANCES.

2.16	ANY PRELIMINARY ADVISORY OPINION SHALL NOT BE BINDING ON THE BOARD OR LIMIT THE BOARD’S AUTHORITY TO INVESTIGATE A FUTURE FORMAL APPLICATION FOR LICENSURE. 

2.17	AN INDIVIDUAL SEEKING A PRELIMINARY ADVISORY OPINION IS NOT AN APPLICANT FOR LICENSURE AND THE ISSUANCE OF AN UNFAVORABLE OPINION SHALL NOT PREVENT SUCH INDIVIDUAL FROM MAKING APPLICATION FOR LICENSURE PURSUANT TO THE MORTGAGE LOAN ORIGINATOR LICENSING ACT.

2.18	THE BOARD OR AN AUTHORIZED REPRESENTATIVE OF THE BOARD WILL PROVIDE A FAVORABLE OR AN UNFAVORABLE OPINION. 

2.19	SURETY BOND

MORTGAGE LOAN ORIGINATORS ARE DEEMED COMPLIANT WITH THE SURETY BOND REQUIREMENT IF THEIR SURETY BOND MEETS THE REQUIREMENTS DEFINED IN ONE OF THE FOLLOWING OPTIONS:

A.	 MORTGAGE LOAN ORIGINATORS, AT A MINIMUM, MAY ACQUIRE AND MAINTAIN AN INDIVIDUAL SURETY BOND IF:

1.	THE SURETY BOND IS IN THE AMOUNT OF $25,000.00;

2.	THE SURETY BOND IS IN CONFORMANCE WITH ALL RELEVANT COLORADO STATUTORY REQUIREMENTS;

3.	THE SURETY BOND IS EXCLUSIVE TO COVERING ACTS CONTEMPLATED UNDER CURRENT COLORADO MORTGAGE LOAN ORIGINATOR LICENSING LAWS;

4.	THE SURETY BOND IS NOT APPLICABLE TO ANY CONDUCT OR TRANSACTIONS OUTSIDE THE JURISDICTION OF THE BOARD; AND

5.	THE SURETY BOND IS IDENTICAL TO THE INDIVIDUAL SURETY BOND FORM DEVELOPED AND APPROVED BY THE BOARD.  

B.	MORTGAGE LOAN ORIGINATORS WHO ARE W-2 EMPLOYEES OR EXCLUSIVE AGENTS FOR COMPANIES WITH LESS THAN 20 INDIVIDUALS WHO ARE REQUIRED TO BE LICENSED PURSUANT TO CURRENT COLORADO MORTGAGE LOAN ORIGINATOR LICENSING LAWS AND WHO DO NOT WORK FOR MORE THAN ONE COMPANY, MAY, AT A MINIMUM, OPERATE UNDER THEIR COMPANY’S SURETY BOND IF THE SURETY BOND MEETS THE FOLLOWING CRITERIA:

1.	THE SURETY BOND IS IN THE AMOUNT OF $100,000.00;

2.	THE SURETY BOND IS IN CONFORMANCE WITH ALL RELEVANT COLORADO STATUTORY REQUIREMENTS;

3.	THE SURETY BOND IS EXCLUSIVE TO COVERING ACTS OF ALL OF THE COMPANY’S W-2 EMPLOYEES OR EXCLUSIVE AGENTS CONTEMPLATED UNDER CURRENT COLORADO MORTGAGE LOAN ORIGINATOR LICENSING LAWS; AND

4.	THE SURETY BOND IS IDENTICAL TO THE INDIVIDUAL SURETY BOND FORM DEVELOPED AND APPROVED BY THE BOARD.  

C.	MORTGAGE LOAN ORIGINATORS WHO ARE W-2 EMPLOYEES OR EXCLUSIVE AGENTS FOR COMPANIES WITH 20 OR MORE INDIVIDUALS WHO ARE REQUIRED TO BE LICENSED PURSUANT TO CURRENT COLORADO MORTGAGE LOAN ORIGINATOR LICENSING LAWS AND WHO DO NOT WORK FOR MORE THAN ONE COMPANY, MAY, AT A MINIMUM, OPERATE UNDER A COMPANY’S SURETY BOND IF THE SURETY BOND MEETS THE FOLLOWING CRITERIA:

1.	THE SURETY BOND IS IN THE AMOUNT OF $200,000.00;

2.	THE SURETY BOND IS IN CONFORMANCE WITH ALL RELEVANT COLORADO STATUTORY REQUIREMENTS;

3.	THE SURETY BOND IS EXCLUSIVE TO COVERING ACTS OF ALL OF THE COMPANY’S W-2 EMPLOYEES OR EXCLUSIVE AGENTS CONTEMPLATED UNDER CURRENT COLORADO MORTGAGE LOAN ORIGINATOR LICENSING LAWS; AND

4.	THE SURETY BOND IS IDENTICAL TO THE COMPANY SURETY BOND FORM DEVELOPED AND APPROVED BY THE BOARD.  

2.20	REGARDING COMPANY SURETY BONDS, THE COMPANY SHALL PROVIDE THE BOARD OR AN AUTHORIZED REPRESENTATIVE OF THE BOARD WITH ANY AND ALL REQUESTED SURETY BONDS RELEVANT TO RULE 2.19 OR CURRENT MORTGAGE LOAN ORIGINATOR LICENSE LAWS AND SHALL VERIFY AND PROVIDE ADEQUATE PROOF REGARDING THE TIMELINE OF EMPLOYMENT FOR EACH INDIVIDUAL OPERATING UNDER SUCH COMPANY POLICY.  FAILURE ON THE PART OF THE COMPANY TO PROVIDE SUCH INFORMATION SHALL RESULT IN NON-COMPLIANCE REGARDING THE SURETY BOND REQUIREMENT FOR INDIVIDUAL LICENSEES OPERATING UNDER SUCH COMPANY BOND.

2.21	MORTGAGE LOAN ORIGINATORS SHALL BE REQUIRED TO PROVIDE PROOF OF CONTINUOUS SURETY BOND COVERAGE AND THAT ALL REQUIRED INFORMATION IS CURRENT.  THE MORTGAGE LOAN ORIGINATOR MAY UPDATE ALL REQUIRED INFORMATION ELECTRONICALLY ON THE DIVISION OF REAL ESTATE’S WEBSITE.

2.22	ANY LICENSEE WHO SO FAILS TO OBTAIN AND MAINTAIN A SURETY BOND IN ACCORDANCE WITH BOARD RULES OR FAILS TO PROVIDE PROOF OF CONTINUOUS COVERAGE SHALL BE SUBJECT TO DISCIPLINARY ACTION.

2.23	ERRORS AND OMISSIONS INSURANCE

MORTGAGE LOAN ORIGINATORS MAY OBTAIN ERRORS AND OMISSIONS COVERAGE FROM THE QUALIFIED INSURANCE CARRIER CONTRACTED WITH THE BOARD OF MORTGAGE LOAN ORIGINATORS TO OFFER LICENSEES AND LICENSE APPLICANTS A GROUP POLICY OF INSURANCE OR LICENSEES AND APPLICANTS MAY OBTAIN ERRORS AND OMISSIONS COVERAGE INDEPENDENT OF THE GROUP PLAN.  MORTGAGE LOAN ORIGINATORS ARE DEEMED COMPLIANT WITH THE ERRORS AND OMISSIONS INSURANCE REQUIREMENTS IF THEIR ERRORS AND OMISSIONS INSURANCE MEETS THE REQUIREMENTS DEFINED IN ONE OF THE FOLLOWING OPTIONS:

A.	MORTGAGE LOAN ORIGINATORS, AT A MINIMUM, MAY ACQUIRE AND MAINTAIN INDIVIDUAL ERRORS AND OMISSIONS INSURANCE IN THEIR OWN NAME WITH THE FOLLOWING TERMS OF COVERAGE:

1.	THE CONTRACT AND POLICY ARE IN CONFORMANCE WITH ALL RELEVANT COLORADO STATUTORY REQUIREMENTS;

2.	COVERAGE INCLUDES ALL ACTS FOR WHICH A MORTGAGE LOAN ORIGINATOR LICENSE IS REQUIRED, EXCEPT THOSE ILLEGAL, FRAUDULENT, OR OTHER ACTS WHICH ARE NORMALLY EXCLUDED FROM SUCH COVERAGE;

3.	COVERAGE SHALL ENCOMPASS ALL TYPES OF TRANSACTIONS CONDUCTED BY THE MORTGAGE LOAN ORIGINATOR AND SHALL BE IN THE INDIVIDUAL MORTGAGE LOAN ORIGINATOR’S NAME; 

4.	COVERAGE IS FOR NOT LESS THAN $100,000.00 FOR EACH LICENSED INDIVIDUAL PER COVERED CLAIM, WITH AN ANNUAL AGGREGATE LIMIT OF NOT LESS THAN $300,000.00 PER LICENSED INDIVIDUAL; AND

5.	COVERAGE CONTAINS A DEDUCTIBLE NO GREATER THAN $1,000.00, OR A DEDUCTIBLE NO GREATER THAN $20,000.00 FOR POLICIES THAT PRIMARILY INSURE REVERSE MORTGAGE TRANSACTIONS.

B.	MORTGAGE LOAN ORIGINATORS WHO ARE EMPLOYEES OR EXCLUSIVE AGENTS FOR COMPANIES WITH LESS THAN 20 INDIVIDUALS WHO ARE REQUIRED TO BE LICENSED PURSUANT TO THE CURRENT COLORADO MORTGAGE LOAN ORIGINATOR LICENSING LAWS AND WHO DO NOT WORK FOR MORE THAN ONE COMPANY, MAY, AT A MINIMUM, OPERATE UNDER THE COMPANY’S ERRORS AND OMISSIONS INSURANCE POLICY IF THE POLICY MEETS THE FOLLOWING TERMS OF COVERAGE:

1.	THE CONTRACT AND POLICY ARE IN CONFORMANCE WITH ALL RELEVANT COLORADO STATUTORY REQUIREMENTS;

2.	COVERAGE INCLUDES ALL ACTS FOR WHICH A MORTGAGE LOAN ORIGINATOR LICENSE IS REQUIRED, EXCEPT THOSE ILLEGAL, FRAUDULENT, OR OTHER ACTS WHICH ARE NORMALLY EXCLUDED FROM SUCH COVERAGE;

3.	COVERAGE SHALL INCLUDE ALL ACTIVITIES CONTEMPLATED UNDER CURRENT COLORADO MORTGAGE LOAN ORIGINATOR LICENSING LAWS AND STATES THIS IN THE POLICY;

4.	COVERAGE SHALL ENCOMPASS ALL TYPES OF TRANSACTIONS CONDUCTED BY ALL OF THE MORTGAGE LOAN ORIGINATORS EMPLOYED AT THE COMPANY OR BY ALL MORTGAGE LOAN ORIGINATORS WHO ARE EXCLUSIVE AGENTS OF THE COMPANY;

5.	COVERAGE IS FOR NOT LESS THAN $1,000,000.00 PER COVERED CLAIM, WITH AN ANNUAL AGGREGATE LIMIT OF NOT LESS THAN $2,000,000.00 THAT IS EXCLUSIVE TO COLORADO CONSUMERS; AND

6.	COVERAGE CONTAINS A DEDUCTIBLE NO GREATER THAN $50,000.00.
	
C.	MORTGAGE LOAN ORIGINATORS WHO ARE W-2 EMPLOYEES OR EXCLUSIVE AGENTS FOR COMPANIES WITH 20 OR MORE EMPLOYEES AND WHO DO NOT WORK FOR MORE THAN ONE COMPANY, MAY, AT A MINIMUM, OPERATE UNDER THE COMPANY’S ERRORS AND OMISSIONS INSURANCE POLICY IF THE POLICY MEETS THE FOLLOWING TERMS OF COVERAGE:

1.	THE CONTRACT AND POLICY ARE IN CONFORMANCE WITH ALL RELEVANT COLORADO STATUTORY REQUIREMENTS;

2.	COVERAGE INCLUDES ALL ACTS FOR WHICH A MORTGAGE LOAN ORIGINATOR LICENSE IS REQUIRED, EXCEPT THOSE ILLEGAL, FRAUDULENT, OR OTHER ACTS WHICH ARE NORMALLY EXCLUDED FROM SUCH COVERAGE;
3.	COVERAGE SHALL INCLUDE ALL ACTIVITIES CONTEMPLATED UNDER CURRENT COLORADO MORTGAGE LOAN ORIGINATOR LICENSING LAWS AND STATES THIS IN THE POLICY;

4.	COVERAGE SHALL ENCOMPASS ALL TYPES OF TRANSACTIONS CONDUCTED BY ALL OF THE MORTGAGE LOAN ORIGINATORS EMPLOYED AT THE COMPANY OR BY ALL MORTGAGE LOAN ORIGINATORS WHO ARE EXCLUSIVE AGENTS OF THE COMPANY;

5.	COVERAGE SHALL ENCOMPASS ALL TYPES OF TRANSACTIONS CONDUCTED BY ALL OF THE MORTGAGE LOAN ORIGINATORS EMPLOYED AT THE COMPANY;

6.	COVERAGE IS FOR NOT LESS THAN $1,000,000.00 PER COVERED CLAIM, WITH AN ANNUAL AGGREGATE LIMIT OF NOT LESS THAN $4,000,000.00 THAT IS EXCLUSIVE TO COLORADO CONSUMERS; AND

7.	COVERAGE CONTAINS A DEDUCTIBLE NO GREATER THAN $100,000.00.

2.24	REGARDING COMPANY ERRORS AND OMISSIONS INSURANCE POLICIES, THE COMPANY SHALL PROVIDE THE BOARD, OR AN AUTHORIZED REPRESENTATIVE OF THE BOARD, WITH ANY AND ALL REQUESTED ERRORS AND OMISSIONS INSURANCE POLICIES RELEVANT TO RULE 2.23 OR CURRENT COLORADO MORTGAGE LOAN ORIGINATOR LICENSING LAWS AND SHALL VERIFY AND PROVIDE ADEQUATE PROOF REGARDING THE TIMELINE OF EMPLOYMENT FOR EACH INDIVIDUAL OPERATING UNDER SUCH COMPANY POLICY.  FAILURE ON THE PART OF THE COMPANY TO PROVIDE SUCH INFORMATION SHALL RESULT IN NON-COMPLIANCE REGARDING THE ERRORS AND OMISSIONS INSURANCE REQUIREMENT FOR INDIVIDUAL LICENSEES OPERATING UNDER THE COMPANY’S ERRORS AND OMISSIONS INSURANCE POLICY.

2.25	MORTGAGE LOAN ORIGINATORS SHALL BE REQUIRED TO PROVIDE PROOF OF CONTINUOUS ERRORS AND OMISSIONS INSURANCE COVERAGE AND THAT ALL REQUIRED INFORMATION IS CURRENT.  THE MORTGAGE LOAN ORIGINATOR MAY UPDATE ALL REQUIRED INFORMATION ELECTRONICALLY ON THE DIVISION OF REAL ESTATE’S WEBSITE.

2.26	ANY LICENSEE WHO SO FAILS TO OBTAIN AND MAINTAIN AN ERRORS AND OMISSIONS INSURANCE COVERAGE IN ACCORDANCE WITH BOARD RULES OR FAILS TO PROVIDE PROOF OF CONTINUOUS COVERAGE SHALL BE SUBJECT TO DISCIPLINARY ACTION.

A hearing on the above subject matter will be held on Wednesday, November 20, 2013, at the Colorado Division of Real Estate, 1560 Broadway, Suite 1250-C, Denver, Colorado 80202 beginning at 9:00 a.m. 

Any interested person may participate in the rule making through submission of written data, views and arguments to the Division of Real Estate.  Persons are requested to submit data, views and arguments to the Division of Real Estate in writing no less than ten (10) days prior to the hearing date and time set forth above. However, all data, views and arguments submitted prior to or at the rulemaking hearing or prior to the closure of the rulemaking record (if different from the date and time of hearing), shall be considered.

Please be advised that the rule being considered is subject to further changes and modifications after public comment and formal hearing.