PURPOSE: This rule establishes operations and supervision guidelines concerning net worth, audit reports, escrow, change in business activities, change of ownership, bonding requirements, servicing, and full service offices.

1. (1) Net Worth.

   1. (A) Amount. Each licensee shall maintain at least that minimum net worth set by section 443.859, RSMo as amended.
   2. (B) Calculation. “Net worth” is total assets minus total liabilities, subject to limitations which may from time-to-time be prescribed by the commissioner to preserve the intent of the law.
2. (2) Late Audit Reports. Failure to timely deliver audit reports per section 443.851, RSMo shall result in suspension of the licensee’s authority to do business absent an extension by the commissioner. Applications for extensions must be in writing and filed at least fifteen (15) days prior to the deadline. The commissioner shall consider whether such request results from conditions beyond the control of the licensee. An independent auditor may be appointed by the commissioner at the licensee’s expense any time after the deadline.

3. (3) Escrow.

   1. (A) Funds collected for a rate-lock fee or for payment for third party services shall be placed with a licensed and bonded disbursing agent or licensed real estate broker and shall be disclosed as a part of the licensee’s financial statement package; for purposes of this rule, a licensed and bonded disbursing agent shall include an escrow agent per section 339.600, RSMo, et seq.

   2. (B) Where servicing includes maintenance of an escrow account for payment of taxes and/or insurance premiums, the funds shall be placed in a federally insured depository institution, to be removed and used only for—

      1. 1. Authorized payments for taxes and/or

insurance premiums;

1. 2. Refunds to the mortgagor;
2. 3. Transferring to another institution as

described in this subsection;

1. 4. Forwarding to the appropriate ser-

vicer in case of a transfer of servicing; or

1. 5. Compliance with a regulatory or

court order.

1. (C) All servicing activities shall be in strict accordance with the Act and all state and federal laws.
2. (4) Proceedings Affecting a Licensee. Each licensee shall be required to notify the commissioner within five (5) business days of becoming the subject of any other government agency proceedings which could affect the licensee’s authority.

1. (5) Change in Business Activities. Each licensee shall provide the commissioner at least fourteen (14) days’ advance notice of an action to—

   1. (A) Close a full-service office; or
   2. (B) Discontinue brokering, originating, or servicing.

2. (6) Change of Ownership, Control or Name or Address of Licensee. Prior to a change of ownership or control, a change of name or address or a change of officers or directors, a licensee shall file the appropriate application and fee on a form prescribed by the commissioner.

   1. (A) Change of Ownership or Control. An application on a form prescribed by the commissioner for a new Missouri residential mortgage brokers license shall be submitted with the fee by the prospective purchaser at least forty-five (45) days prior to the proposed change. The commissioner shall issue a new license, a finding that the proposed change of ownership or control does not require a new license or a denial.
   2. (B) Change of Name or Address. A licensee shall file an Application for Change of Name or Address, with the fee, ten (10) business days in advance, on a form prescribed by the commissioner. The name change shall be approved unless deceptively similar to another name.
   3. (C) Change of Officers or Directors. Within thirty (30) days of any change in a licensee’s directors or principal officers, a report of such change shall be filed on a form prescribed by the commissioner along with the appropriate fee.
3. (7) Bonding Requirements. Each licensee shall maintain a bond or irrevocable letter of credit in the amount of twenty thousand dollars ($20,000). If a bond, it must be issued by some insurance company licensed to do business in this state and shall be in a form approved by the commissioner; if an irrevocable letter of credit, it must be issued by a financial institution insured by the Federal Deposit Insurance Corporation and shall be in a form approved by the commissioner. The bond or irrevocable letter of credit shall be payable to the commissioner and shall be filed with the commissioner prior to the issuance of a license. 20 CSR 1140-30
4. (8) Servicing. All licensees must comply with the servicing and transfer of servicing requirements established by applicable federal and state statutes and regulations.

5. (9) Full-Service Office.

   1. (A) Each licensee shall maintain a full-service office consistent with section 443.857, RSMo. At a minimum, each licensee shall provide at such office a staff reasonably adequate to handle effi ciently all matters relating to a loan application or existing loan. In determining whether a licensee handles such matters in a reasonably adequate manner, the commissioner shall consider consumer complaints received regarding such licensees and infor mation obtained from examinations conducted and reports filed and whether the licensee has—

      1. 1. Provided facilities and personnel ade-

quate to accommodate a borrower who wishes to bring all documents concerning an existing home mortgage or a mortgage application to the full-service office for examination; and

1. 2. Maintained a supply of all required

documents.

1. (B) If it is determined that a licensee is not in compliance with section 443.857, RSMo, the commissioner shall notify the licensee in writing detailing the requirements to achieve compliance, along with a reasonable deadline.

AUTHORITY: sections 443.847, 443.869(7) and 443.887, RSMo Supp. 1996.* This rule originally filed as 4 CSR 140-30.040. Emergency rule filed Nov. 25, 1996, effective Dec. 5, 1996, expired June 2, 1997. Original rule filed Nov. 25, 1996, effective May 30, 1997. Moved to 20 CSR 1140-30.040, effective Aug. 28, 2006. *Original authority: 443.847, RSMo 1994, amended 1995; 443.869(7), RSMo 1994, amended 1995; and 443.887, RSMo, amended 1995. FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION Division 1140—Division of Finance FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION Division 1140—Division of Finance FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION Division 1140—Division of Finance