(a) Record availability.

1. (1) In addition to any state or federal laws and rules, or other requirements regarding records, each licensee shall maintain books, records, and documents sufficient to allow the Securities Commissioner to determine the licensee’s compliance with the Fair Mortgage Lending Act, Arkansas Code § 23-39-501 et seq., and this part.

2. (2)

   1. (A) The licensee shall maintain all records required by this section for at least five (5) years.
   2. (B) Records may be kept in an electronic format that is convertible into legible, tangible documents, provided that the means to examine such records are in a format that is compatible with the electronic examination software and is in a form acceptable to the commissioner, is available at the office of the licensee, and the hardware and software needed to access the records is maintained during the retention period.
   3. (C) Records shall be made available to the commissioner immediately upon request, or within seventy-two (72) hours after notice to the licensee if the records are not readily available.
3. (3) All records required by this section shall be available for inspection and copying at the expense of the licensee upon request by the commissioner.
4. (4) All records required to be maintained shall be secured against unauthorized access and damage.
5. (5) All records required to be maintained shall at all times be true, accurate, and complete to the best of the knowledge, information, and belief of the licensee and its agents.
6. (6) A licensee shall notify the commissioner through the NMLS&R of any change in the location of its books and records within thirty (30) days following such change.

(b) Required books and records.

1. (1)

   1. (A) A licensed mortgage broker and mortgage banker shall maintain a list of all mortgage loan applications or executed fee agreements.
   2. (B) The list should include:

(i) The loan applicant’s name;

1. (ii) The date of the loan application;

   1. (iii) The amount of the loan;

      1. (iv) The property address;
      2. (v) The purpose of the loan;
      3. (vi) The final disposition of the loan application (whether funded, denied, etc.) and the date of such disposition;
      4. (vii) The name and NMLS number of the entity that funded the loan, if that entity differs from the licensee;
      5. (viii) The name of each loan officer or employee, including any employee processing the application or offering the fee agreement, who receives compensation other than such person’s normal hourly wages as a result of the funding of the loan;
      6. (ix) Broker fees collected; and
      7. (x) A record of all monies received from a borrower for fees to be paid to third parties for services in connection with the loan.

2. (2) A mortgage broker shall maintain a file for each mortgage loan application containing:

   1. (A) A copy of any agreement with the borrower concerning the licensee’s services;
   2. (B) A document showing the final disposition of the application, such as a Form HUD-1, other settlement statement or denial, or withdrawal letter;
   3. (C) All material correspondence sent or received by the licensee to or from the borrower or any agent of the borrower;
   4. (D) Any other document on which the licensee relied in underwriting the loan;
   5. (E) A copy of the initial loan application and the final loan application that is signed and dated by the loan applicant and the loan officer;
   6. (F) All contracts, agreements, and escrow instructions to or with any depository institution, to the extent applicable when used by a mortgage broker to table fund a mortgage loan; and
   7. (G) The initial and final documents showing compliance with the Consumer Credit Protection Act disclosure requirements, 15 U.S.C. § 1601 et seq., and the Real Estate Settlement Procedures Act disclosure requirements, 12 U.S.C. § 2601 et seq.

3. (3) A mortgage banker shall maintain a file for each mortgage loan containing the information required by subdivision (b)(2) in addition to the following information:

   1. (A) A copy of all closing documents including:

      1. (i) The closing instructions;
      2. (ii) Any applicable rescission notice;
      3. (iii) Form HUD-1;
      4. (iv) Other settlement statement;
      5. (v) Final truth-in-lending disclosure;
      6. (vi) Executed note;
      7. (vii) Executed deed of trust or mortgage; and
      8. (viii) Each assignment of beneficial interest by the licensee to the extent applicable; and
   2. (B) A copy of each appraisal obtained in connection with the mortgage loan, whether or not the loan actually closed.

4. (4) A mortgage servicer shall maintain a file for each Arkansas mortgage loan serviced containing:

   1. (A) The borrower’s name;
   2. (B) The property address;
   3. (C) The original loan amount;
   4. (D) The name and NMLS license number for the lender that originated the loan;
   5. (E) The loan number;
   6. (F) A copy of the servicing letter to the borrower;
   7. (G) The current loan balance;
   8. (H) The amount of the monthly payment, including a breakdown of the principal and interest payments;
   9. (I) The taxes and insurance escrowed;
   10. (J) The payment history;
   11. (K) Any additional fees collected on the loan;

   12. (L) Optional insurance:

       1. (i) Insurance information regarding optional insurance coverage purchased by the borrower in connection with the loan, including:

(b) (b) The types of coverage; and

1. (c) (c) Written authorization from the borrower for each type of coverage; and

   1. (ii) This does not apply to hazard insurance on the property securing the loan;
   2. (M) A copy of all notices sent to the borrower related to any foreclosure proceeding filed against the property securing the loan;
   3. (N) A record of the final disposition of the loan, including a copy of any collateral release document, record of a servicing transfer, charge-off, or REO disposition; and

   4. (O) A copy of the year-end notice sent to the borrower.

      1. (c) Required accounting records:

2. (1)

   1. (A) A record of all money received in connection with each mortgage loan containing:

      1. (i) The payor’s name;
      2. (ii) The date received;
      3. (iii) The amount; and
      4. (iv) The purpose of the receipt including identification of each mortgage loan.

   2. (B) The records shall include:

      1. (i) Bank statements;
      2. (ii) Cancelled checks; and
      3. (iii) A monthly reconciliation of all accounts, including, but not limited to, operating accounts and escrow accounts;

3. (2) A sequential listing of checks written for each bank account relating to the licensee’s business as a mortgage loan broker, mortgage loan banker, or mortgage loan servicer containing the:

   1. (A) Payee’s name;
   2. (B) Amount;
   3. (C) Date; and
   4. (D) Purpose of the payment including identification of the related mortgage loan, if applicable; and

4. (3) A copy of the receipts and invoices for all third-party transactions or prepaid fees relating to the mortgage loan transactions.

   1. (d) Miscellaneous books and records:
5. (1) A copy of all advertisements used by the licensee in Arkansas that sets forth any rates or terms of a mortgage loan;
6. (2) A copy of all federal or state governmental or regulatory reviews or examination reports;

7. (3) If the licensee is not a natural person, a file containing:

   1. (A) A copy of the organizational documents for the licensee with any amendments thereto;
   2. (B) All minutes of meetings of directors, shareholders, partners, or similar parties;
   3. (C) If the licensee is a nonpublic company, a record, such as a stock or ownership transfer ledger, showing ownership of all proportional equity interests in the licensee, ascertainable as of any given record date; and
   4. (D) All franchise tax reports or annual reports required by law to be filed with the Secretary of State;
8. (4) A copy of each broker agreement or independent contractor agreement that has been entered into with an investor or organization that funds the loans;
9. (5) A copy of each employment agreement or independent contractor agreement that has been entered into with each loan officer licensed under the licensee;

10. (6)

    1. (A) A file containing copies of all complaint letters or correspondence received containing all complaints made against the licensee, its loan officers, employees, or agents by borrowers, loan applicants, lenders, or any other person.
    2. (B) In addition to the home office of the licensee, each branch office shall maintain this complaint file for all complaints involving all business conducted through the branch or by loan officers operating under the supervision of the branch;

11. (7)

    1. (A) A balance sheet and income statement prepared in accordance with generally accepted accounting principles reflecting that licensee’s net worth.
    2. (B) If the licensee is a mortgage banker or mortgage servicer, the net worth should reflect at least twenty-five thousand dollars ($25,000); and
12. (8) A copy of the licensee’s Anti-Money Laundering Program including policy and procedures and proof of training of the Anti-Money Laundering Program with all employees.