Colorado Division of Real Estate (DORA) Mortgage Broker Rule

DIVISION OF REAL ESTATE

MORTGAGE BROKERS

 

EMERGENCY RULE

4CCR 725 -3

1-4-1 MORTGAGE BROKER LICENSING EDUCATION

Section 1.      Authority

Section 2.      Scope and Purpose

Section 3.      Applicability

Section 4.      Mortgage Broker Licensing Education Rules

Section 1.      Authority

The Director of the Division of Real Estate adopts the following emergency rule entitled, 1-4-1 Mortgage Broker Licensing Education, according to her authority as found in §§  12-61-910.3, and 24-4-103(6), C.R.S.

Section 2.      Scope and Purpose

The Director finds that immediate adoption of this rule is imperatively necessary for the preservation of public health, safety or welfare and that compliance with the rulemaking requirements of § 24-4-103, C.R.S., applicable to non-emergency rules, would be contrary to the public interest.

Pursuant to § 12-61-903(3)(a), mortgage brokers must complete no less than nine hours of fundamental mortgage lending coursework and satisfactorily complete a corresponding written examination.  The Director shall approve the fundamental mortgage lending coursework and the written examination.

The purpose of this rule is to clarify the education requirements for licensed mortgage brokers.  The purpose is also to ensure compliance with education standards.  It is vital to consumer protection and to competent mortgage broker practice that mortgage brokers understand applicable State and Federal Law.

Without the immediate adoption of this emergency rule, the public’s interest is not served.  Wherefore, the Director, pursuant to § 24-4-103(6), C.R.S. has an obvious and stated need to adopt this rule.

Section 3.      Applicability

This rule applies to each individual mortgage broker applicant and each individual mortgage broker who currently maintains a mortgage broker license through the Colorado Division of Real Estate.

Section 4.      Mortgage Broker Licensing Education Rules.

(1) - Applicant and Licensee Education Requirements

All mortgage brokers who currently maintain a Colorado mortgage broker’s license must complete 40 hours of licensing education and pass a two-part licensing examination by January 1, 2009. 

On or after January 1, 2009, each individual applicant for initial licensing as a mortgage broker must complete, within the three years immediately preceding the date of the application, 40 hours of licensing education and pass a two-part exam prior to applying for a mortgage broker license. 

(2) – Certificate of Completion

Mortgage broker applicants and licensees must receive a certification of completion from their education provider evidencing the successful completion of the respective licensing education coursework before scheduling the exam.

Mortgage broker applicants and licensees must ensure that their education provider files a certification of completion with the examination provider establishing the successful completion of the respective licensing education coursework before scheduling the exam. The education provider must file the certificate of completion with the approved examination provider electronically or in such manner as prescribed by the Director.

 

(3) – Licensing Education Passing Score

The mortgage broker licensing examination consists of two parts.  The two parts include Federal and State Law and Mortgage Lending Basics. Applicants for licensure must receive a score of 70 percent to pass the Federal and State Law portion of the exam and a 70 percent score to pass the Mortgage Lending Basics portion of the exam. If the applicant fails one of the two parts, the applicant may reschedule with the examination provider to retake only the portion of the exam that the applicant failed. In no event will the Director accept a passing score for licensure, beyond one year from the date of the passing score.

(4) – Qualifying Schools

Mortgage broker applicants and licensees must receive the required 40 hours of licensing education, approved by the Director, from any accredited degree-granting college or university or any private occupational school that has a certificate of approval from the Division of Private Occupational Schools in accordance with the provisions of article 59 of title 12. 

(5) – Forty Hour Licensing Education Requirement

Mortgage broker applicants and licensees must successfully complete the required forty hours of licensing education through classroom instruction or an equivalent distant learning course offered in a manner as prescribed by the Director.  Pursuant to the requirements in Part 1 of this rule, the following licensing education must be successfully completed prior to taking the examination and applying for a license:

    • A minimum of  19.5 hours in Federal and State Law
    • A minimum of  16 hours in Mortgage 101
    • A minimum of  4.5 hours in Business and Trade Practices

(6) – Exemption Qualifications

As prescribed by the Director or person(s) authorized by the Director, qualifying mortgage broker applicants who meet the following criteria are exempt from having to complete the Mortgage Broker 101 and the Business and Trade Practice portion of the education coursework and respective examination. 

To qualify for the exemption, mortgage brokers must meet all five requirements:

    • Currently maintain a Colorado mortgage broker license.
    • Maintain a membership with a mortgage broker association approved for exemption by the Division of Real Estate.
    • Maintain a mortgage broker association designation that is current and in good standing.
    • Provide the association’s letter of certification to the education course provider prior to completing coursework.
    • Provide the association’s letter of certification to PSI prior to taking the exam.

Those who meet the criteria for exemption must complete the Federal and State Law portion of the licensing coursework and the Federal and State Law portion of the exam.

(7) – Authority to Audit Education Provider

The Director or persons, contractors or organizations authorized by the Director, may audit courses and may request from each education provider and schools offering the approved mortgage broker courses pursuant to requirements in part 5 of this rule, all related instructional materials, student attendance records and other information that may be necessary for an audit.  The purpose of the audit is to ensure that education providers and schools adhere to the approved course of study, offer course material and instructions consistent with acceptable education standards and instruct in such a manner that the desired learning objectives are met.  Failure to comply with this rule may result in the withdrawal of course approval.

(8) - Penalties

Individuals who violate this rule shall be subject to disciplinary action pursuant to § 12-61-905, C.R.S. Disciplinary action includes, but is not limited to:

      • Revocation;
      • Refusal to renew a license
      • Fines; and
      • Restitution for any financial loss

Section 5.      Effective Date

This emergency rule shall be effective May 2, 2008.

Student Loans: Congratulations! You're Broke

 
The cost of going to college has been increasing much faster than the rate of inflation. To attend a small, private college costs $20,000 a year minimum. And if your son or daughter just got an acceptance package from Harvard, you’re looking at $40K by the time you factor in pizzas in the dorm room. You got that kind of money lying around? Not many people do.
 
You want the best for your child. It’s natural. And that means you want those kids to go to the best schools they can – even if it breaks the bank. Welcome to the world of financial aid, government grants and student loans.
Over 68% of all college students receive some form of financial aid. Scholarships are always nice. They don’t have to be paid back. Work-study is good. Your child works in the cafeteria, library or somewhere else on campus to earn walking-around money.
 
Tuition and living (a dorm room) are the two priciest items you’re looking at for the next four years (unless you’ve got a few more future graduates coming through the pipeline). Start by talking to the financial aid people at your child’s school of choice to see if there’s any scholarship money, grant money or other cash available through the school itself. You may get lucky.
 
Or, maybe not. In either case, chances are you’ll be talking to a private lender to borrow cash for those tuition bills. Ask the financial aid officer to whom you speak for recommendations on lenders. These professionals may be able to point you in the right direction.
 
Shop around. You’ll find the best deals on government-insured loans. These are loans backed by the federal government. That means if the borrower defaults on the loan, the taxpayers pick up the tab. (You pay one way or another, that’s a fact.) Government-backed loans are easy to get, rates are set but different lenders can set additional terms – earlier payback start date, no rearranging existing loans to attend grad school – there are differences.
 
You also may find that government-backed loans are unavailable through your local bank. Congress does limit the amount of risk it places on the backs of taxpayers. In this case, go for a collateralized loan to receive the lowest possible rate. A line of credit on your home is the best way to go. That way, the money is available when you need it but you don’t pay interest on that money until you actually use it. Saves a ton on interest charges.
 
Always read the fine print, especially if you’re taking a collateralized loan. Your house is at stake and some unscrupulous lenders are more interested in repossessing your home than getting your kids through school. Buried in the boilerplate, somewhere, is clause 12.3, sub-section C that states that if you’re late with a single loan payment, the lender can begin foreclosure proceedings to get your home. Not good.
 
However, you don’t have to worry about these unethical practices if you go with your local hometown back, talking to good ol’ Bob about a government-backed loan for your freshmen offspring.

Elizabeth Warren attempting to explain why Student should pay less interest on loans.