[THIS PAGE NOT FOR PUBLICATION IN THE CODE OF COLORADO REGULATIONS]

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

CHAPTER 4:	RENEWAL, REINSTATEMENT, INACTIVATION, SUSPENSION, SURRENDER OR REVOCATION OF A LICENSE OR REGISTRATION

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 license renewal, reinstatement, Inactivation, suspension, surrender, or revocation processes 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Proposed New, Amended and Repealed Rules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 4:	RENEWAL, REINSTATEMENT, INACTIVATION, SUSPENSION, SURRENDER OR REVOCATION OF A LICENSE OR REGISTRATION

4.1	Rrenewal process for active licensees.

A.	There are two existing databases that licensees shall independently renew their license through annually.  The two independent databases include:

1.	The license database managed by the Division of Real Estate.  This database may be located by visiting the Division of Real Estate’s website. 

2.	The registration database managed by the Nationwide Mortgage  Licensing System and Registry.  

B.	Mortgage loan originators renewing, reinstating or re-applying for registration through the Nationwide Mortgage Licensing System and Registry shall do so in accordance with established timelines, policies and procedures set forth by the Nationwide Mortgage Licensing System and Registry.  The Nationwide Mortgage Licensing System and Registry may collect fees for the purpose of registration applications, renewal applications, reinstatement applications, credit reports, criminal background checks and for other processes associated with registration through the Nationwide database.

C.	The Board shall issue or deny a license renewal or reinstatement application within thirty days after the applicant has submitted all of the information necessary for license renewal or reinstatement and after the Board has received all information necessary to make a determination regarding the applicants’ compliance.

D.	Regarding the license database managed by the Division of Real Estate, mortgage loan originators may renew or reinstate their license online or may do so by submitting a paper renewal or reinstatement application.

E.	For both databases, the license renewal period begins November 1st of each calendar year and ends December 31st of each calendar year.  Individuals who renew their license shall only do so if they are compliant with all provisions of the mortgage loan originator licensing act and all Board Rules.

F.	All licenses expire at 12 midnight on December 31st of each calendar year if the licensee has not properly renewed their license.
 
G.	If a license has expired, individuals may choose to reinstate their mortgage loan originator license.  The reinstatement period for both databases begins January 1st of each calendar year and ends on the last day of February of each calendar year.  Individuals who reinstate their license shall only do so if they are compliant with all provisions of the mortgage loan originator licensing act and all Board Rules.

H.	Individuals who fail to renew or reinstate their license shall re-apply in the manner set forth in Rule 4.3.

I.	All renewal, reinstatement or application fees shall be prescribed by the Board.  All fees collected for the purpose of applying for license renewal, reinstatement or re-application are non-refundable.

4.2 	Renewal process for inactive licensees.

A.	Individuals with inactive licenses shall renew their license annually in the manner set forth in Rule 4.1.  Individuals with inactive licenses are not required to maintain compliant errors and omissions insurance or a compliant surety bond, but they are required to stay current on all continuing education requirements in order to renew their license.  

B.	The fee for reinstatement is one and one half times the amount of the current renewal fee.

4.3	 Re-application.

A.	Individuals who fail to maintain a valid license for a period of up to five (5) years after the date of license expiration and who are compliant with the annual continuing education requirements will need to complete the following: 

1.	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;

2.	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;

3.	Obtain a compliant surety bond. Surety bond requirements are defined in section 12-61-907, C.R.S. and by Board Rule;

4.	Obtain compliant errors and omissions insurance. Errors and omission insurance requirements are defined in Section 12-61-903.5, C.R.S. and by Board Rule; and

5.	Complete the Colorado Division of Real Estate specific license application and pay the application fee.

B.	Individuals who fail to maintain a valid license for a period of up to five (5) years after the date of license expiration and who are not compliant with the annual continuing education requirements will need to complete the following: 

1.	Comply with all requirements set forth in section (a), subsection (1) to (5) of this Rule, and

2.	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;

C.	Individuals who fail to maintain a valid license for a period of more than five (5) years after the date of license expiration will need to complete the following:

1.	Comply with all requirements set forth in section (b), subsection (1) and (2) of this Rule; and

2.	Retake 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;

4.4 	Individuals who do not have an active license are prohibited from practicing as a mortgage loan originator.  Additionally, individuals who do not have an active license are prohibited from engaging in any mortgage related activities which require licensure pursuant to the Colorado mortgage loan originator licensing and Mortgage Company Registration Act, Board rule or as prescribed by Board position statement.

4.5	 Renewal process for mortgage companies.

A.	Mortgage companies shall renew the registration on the Nationwide Mortgage Licensing System and Registry.

B.	Mortgage companies renewing, reinstating or re-applying for registration through the Nationwide Mortgage Licensing System and registry shall do so in accordance with established timelines, policies and procedures set forth by the Nationwide Mortgage Licensing System and Registry.  The Nationwide Mortgage Licensing System and Registry may collect fees for the purpose of registration applications, renewal applications, reinstatement applications, credit reports, criminal background checks and for other processes associated with registration through the Nationwide database.

C.	The Board shall issue or deny a registration renewal application within thirty days after the applicant has submitted all of the information necessary for license renewal or reinstatement and after the board has received all information necessary to make a determination regarding the applicants’ compliance.

D.	The registration renewal period begins November 1st of each calendar year and ends December 31st of each calendar year.  Mortgage companies that renew or reinstate their license shall only do so if they are compliant with all provisions of the mortgage loan originator licensing and mortgage company registration act and all Board rules.

E.	All registrations expire at 12 midnight on December 31st of each calendar year if the licensee has not properly renewed their license.
 
F.	If a license has expired, mortgage companies may choose to reinstate their registration.  The reinstatement period for reinstatement begins January 1st of each calendar year and ends on the last day of February of each calendar year.  Mortgage companies that reinstate their registration shall only do so if they are compliant with all provisions of the mortgage loan originator licensing and mortgage company registration act and all Board Rules.

G.	Mortgage companies that fail to renew or reinstate their registration shall re-apply on the Nationwide Mortgage Licensing System and Registry in order for the Division of Real Estate to review their applications and determine whether the mortgage company is compliant with the registration requirements.

H.	All renewal, reinstatement or application fees shall be prescribed by the Board and are non-refundable.

4.6 	Mortgage companies that do not have an approved registration are prohibited from acting      through employees or other individuals who takes residential loan applications or offers or negotiates terms of a residential mortgage loan.  Additionally, mortgage companies that do  not have an approved registration are prohibited from engaging in any mortgage related conduct that requires a registration pursuant to the mortgage loan originator licensing and mortgage company registration act, Board Rule or as prescribed by the Board by Position Statement.

4.7	Mortgage loan originator license inactivation and reactivation
	
If a mortgage loan originator license or registration is inactivated by the Board of mortgage loan originators or an authorized representative of the Board for one or any combination of the following reasons, the mortgage loan originator shall pay an administrative fee determined by the board in order to reactivate their license:  
	
A.	The mortgage loan originator has failed or is failing to comply with the surety bond requirements of section 12-61-903(6), C.R.S. Section 12-61-907, C.R.S. or any rule of the Board that directly or indirectly addresses surety bond requirements;

B.	The mortgage loan originator has failed or is failing to comply with the errors and omissions insurance requirement in Section 12-61-903.5, C.R.S. or any Rule of the Board that directly or indirectly addresses errors and omissions insurance requirements;

C.	The mortgage loan originator has failed or is failing to maintain current contact information, surety bond information, or errors and omissions insurance information as required by this Part 9 or by any Rule of the Board that directly or indirectly addresses such requirements;

D.	The mortgage loan originator has failed or is failing to respond to an investigation or examination;

E.	The mortgage loan originator has failed or is failing to comply with any of the education or testing requirements set forth in this Part 9 or in any rule of the Board that directly or indirectly addresses education or testing requirements; or 

F.	The mortgage loan originator has failed or is failing to register with and provide all required information to the Nationwide Mortgage Licensing System and Registry.

4.8	Individuals who have an inactive license or registration are prohibited from practicing as a mortgage loan originator.  Additionally, individuals who have an inactive license or registration are prohibited from engaging in any mortgage related activities which requires licensure pursuant to the Colorado mortgage loan originator licensing and mortgage company registration act, Board rule or as prescribed by Board position statement.

4.9	In order for an inactive mortgage loan originator license or registration to be reactivated, the individual seeking reactivation shall provide the Division of Real Estate with proof of full compliance with current mortgage loan originator license law.

4.10	The Board has created the mortgage loan originator license reactivation form and this form may be found on the Division of Real Estate’s website.