Colorado’s Division of Real Estate is amending parts of 4 Colo. Code Regs. Pt. 725-3 (adopted rules are available online here and here. Among these amendments are new provisions applicable to the Colorado Lock-in Disclosure:
“Colorado Lock-in Disclosure: means the Colorado Lock-in Disclosure form created by the Board of Mortgage Loan Originators. This form is to be used for any loan application or transaction that is not under the authority of the TILA-RESPA Integrated Disclosure Rule as defined and incorporated by reference in Board Rule 1.36. This disclosure may be found on the Division of Real Estate’s Website. A mortgage loan originator may use an alternate form if the alternate form includes all information required on the Colorado Lock-in Disclosure form, as determined by the Board.” (Ibid. § 725-3:1.38)
“Colorado specific Lock-in Disclosure requirements under Section 12-61-914(1)(b), C.R.S.
A. The Colorado Lock-in Disclosure form must be used for all transactions not under the authority of the TILA-RESPA Integrated Disclosure Rule and for which the applicable GFE, HUD-1 and Truth-in-Lending Disclosures are used.
B. The Colorado Lock-in Disclosure form must be disclosed:
1. Within three (3) business days after receipt of a loan application and if applicable, contain the following information:
a. The cost, terms, duration and conditions of the lock-in agreement;
b. Whether a lock-in agreement has been entered;
c. Whether the lock-in agreement is guaranteed by the mortgage loan originator; and
d. Disclosure must be made if a lock-in agreement has not been entered and that the interest rate and terms are subject to change.
2. If, after the initial written disclosure is provided, a mortgage loan originator enters into a lock-in agreement, within three (3) business days thereafter and prior to the borrower signing loan closing documents.
3. If, after a mortgage loan originator enters into a lock-in agreement, the annual percentage rate increases from the annual percentage rate disclosed earlier by more than 1/8 of one (1) percentage point, within three (3) business days of such change and prior to the borrower signing loan closing documents.
4. If, after the mortgage loan originator enters into a lock-in agreement, there is a change to any of the information provided on the lock-in disclosure form, including but not limited to a lock-in extension.
C. The Colorado lock-in Disclosure form or alternate form shall be used when disclosing the secured rate of interest for the prospective borrower or disclosing that the interest rate is not secured and is subject to change.” ( § 725-3:5.16)
Due to these new requirements, we will be “un-retiring” Cx13134 (see here for our retirement announcement) to print generically under the following conditions:
- Document Package Type = Initial Disclosure
- Document Package Type = Pre-Closing
- Document Package Type = Redisclosure
- Document Package Type = TILA Redisclosure
- Integrated Disclosure Loan Indicator = No
- State Code = Colorado
Other notable changes made by the Division of Real Estate include the following:
- Deletions to the definition of “MLO Compensation Rule” (under § 725-3:1.37) and the requirement of providing “compensation disclosure requirements” pursuant to such rule (set forth in 12 CFR § 1026.36; see Supra § 725-3:5.17). This does not impact Docutech, since we will continue to provide the disclosures that are required under Regulation Z.
- Repealing the requirement that a contract between a loan originator and a borrower be in writing (under Supra 725-3:5.11). This requirement did not require that such a contract exist (only that if one exists, it be in writing) and we did not provide a standard contract for it.
- Revisions to the section requiring a loan originator agreement between a mortgage loan originator and a lender (under Supra 725-3:5.12). We do not support contracts between these parties.
- Revisions to other definitions under Supra 725-3:1, to make them more compatible with the latest edition of Regulation Z.
Changes to Cx13134 will take effect on February 16, 2017. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.