(a) Each mortgage banker and mortgage broker shall keep its books and records in a manner that will allow the superintendent to determine whether the mortgage banker or mortgage broker is complying with article 12-D of the Banking Law. Every mortgage banker and mortgage broker shall preserve its books and records for inspection for a minimum of three years. Every mortgage banker and mortgage broker shall establish and maintain the following:

Each mortgage banker and mortgage broker shall file an annual report with the superintendent in such form as the superintendent shall prescribe. The annual report shall be in writing, subscribed by the mortgage banker or mortgage broker under penalty of perjury.

Each mortgage banker shall maintain a general ledger and such subsidiary ledgers as is necessary to accurately record all assets, liabilities, capital, income and expenses, and contingencies. Such ledgers shall be posted at least monthly. As of the end of each month a trial balance shall be prepared and kept readily available for inspection by department personnel. Mortgagors' escrow funds and corresponding amounts due from banks shall be set forth in the general ledger. Additionally, regular, periodic proofs shall be conducted.

As of the end of each fiscal quarter, each mortgage banker shall have prepared an unaudited financial statement consisting of a balance sheet, income statement, and a statement of changes in net worth. Such financial statement shall be kept readily available for inspection by department personnel.

Each mortgage banker shall have prepared an annual audited financial statement as of its fiscal year end which must be filed with the department within 90 days of the close of the fiscal year. The financial statement shall be prepared in accordance with generally accepted accounting principals and audited by an independent certified public accountant. Such audit shall be performed in accordance with generally accepted auditing standards and shall include a calculation of adjusted net worth as defined in section 410.1(b) of this Part and an opinion from the accountant. Any mortgage banker which is a consolidated subsidiary may comply with this provision by annually providing a consolidated audited financial statement of its parent company and a financial statement, which may be unaudited, of the mortgage banker which is prepared in accordance with generally accepted accounting principles. Such financial statement shall include a calculation of net worth as defined in section 410.1(b) of this Part and shall be attested to by the chief executive officer or chief financial officer of the parent company.

Each mortgage banker shall maintain all documents relating to the credit, underwriting and pricing decisions of each loan file irrespective of whether the application has been denied, approved or withdrawn. Each mortgage broker shall maintain a copy of the HUD-1 in each loan file.

Each mortgage banker shall establish and maintain the following:

Each mortgage banker shall establish and maintain the following documents for all loans, provided that such documents need not be maintained for federally related mortgage loan programs including, but not limited to, any loan purchased by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, securitized by the Government National Mortgage Association or insured by the Federal Housing Administration, the Veterans' Administration or the Farmers' Home Administration or such loans that are prime no documentation/low documentation or alternative documentation loans:

With respect to mortgage loans for which a commitment has been issued but the loan has not yet closed and funded, each mortgage banker shall maintain a report or reports, updated on a monthly basis, that provides the following information, both by state and in the aggregate:

Such report(s) shall be retained for one year.

For mortgage loans in which the loan applicant has entered into a lock-in agreement with respect to the interest rate, mortgage bankers shall maintain a report, updated monthly, regarding such loans that includes the date the interest rate was locked-in and the date and dollar amount of any fees collected by any party for the purpose of guaranteeing the lock-in rate. Such report shall be retained for one year.

For each line of credit, a mortgage banker shall maintain a report, or equivalent documentation, updated weekly, listing each advancement of funds from the line of credit that reflects the date of the advancement, the name of the borrower, the date that the mortgage loan closed and the date the funds were forwarded to satisfy its obligation for the advancement from the line of credit.

Each mortgage banker shall maintain a list, by state, of the closing agents that it uses that contains, at a minimum, the name, address and telephone number of the closing agent.

Within 45 days of the end of each fiscal quarter, each mortgage banker shall file:

Each mortgage banker shall employ an in-house compliance officer who shall be responsible for ensuring that the mortgage banker operates its mortgage banking business in accordance with all applicable Federal and State laws and regulations. While the compliance officer may have other job responsibilities, the mortgage banker is responsible for ensuring that the compliance officer devotes sufficient time to the compliance function responsibilities. Alternatively, the mortgage banker may retain an unaffiliated third party to provide such compliance services.

Within 10 days of receipt, each mortgage banker certified by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation shall provide the department with:

Within 10 days of receipt, each mortgage banker shall provide the department with a certified copy of any report of an audit of the mortgage banker and/or its affiliates by any lender extending a line of credit to the mortgage banker, investor, party to a loan purchase agreement, any Federal agency or government service organization.

In order to allow the superintendent to ensure that all mortgage bankers are conducting their residential mortgage lending business in accordance with the provisions of section 296-a of the Executive Law, each mortgage banker exempt from the mortgage data reporting requirements of section 203.3(2) of Regulation C, 12 CFR^*203, issued by the Board of Governors of the Federal Reserve pursuant to the Federal Home Mortgage Disclosure Act, 12 USC* 2801, et seq., shall maintain the same data as required by Regulation C for review by the Superintendent of Financial Services. Said data shall be compiled on an annual basis by March 1st of the following year in the manner required by Regulation C but need not be submitted to the department but must be available for examination for a minimum of three years. Mortgage bankers wishing to retain the above data in a form other than that required by Regulation C may apply in writing for a waiver from the superintendent.