By the Division of Banks

Record Retention For Closed, Withdrawn, And Denied Mortgage Loans

Mass. Gen. Laws ch. 255E § 8 states that each licensed mortgage lender and mortgage broker shall preserve all business records "for as long a period as the Commissioner shall prescribe by regulation." Pursuant to 209 CMR 42.09(1)(b), licensed mortgage brokers shall retain "the original contract for broker's compensation, a copy of the settlement statement, an account of fees received in connection with the loan, correspondence, papers or records relating to the loan and such other documents as the Commissioner may require" for a minimum of three months after the mortgage loan is made. It is anticipated that proposed regulations will authorize electronic and out-of-state recordkeeping.

A licensee must disclose the type and number of its license(s) to all applicants in writing at the time a loan application is accepted or a fee is paid and to disclose said information in all advertisements pursuant to 209 CMR 42.15. This requirement would apply to any on-line advertisements or applications.