Compliance Newsletter Issue 1-22

Legal & Regulatory Updates

VA provided clarification on the regulatory requirement that all VA guaranteed loans, including Interest Rate Reduction Refinance Loans, require lender certifications. Please see VA Circular 26-18-14 for more information.

State Law Updates

Colorado
Colorado has enacted a bill CO H.B. 1128 concerning strengthening protections for consumer data privacy. In accordance with this bill, the covered entities are required to develop a written policy for the destruction or proper disposal of those paper and electronic documents containing personal identifying information. the covered entity does not include a person acting as a third-party service provider. A third-party service provider is an entity that has been contracted to maintain, store, or process personal information on behalf of covered entity. Default law firms might fall under a third-party definition and might need to comply with this law unless required under their retention agreements.

​Connecticut
Connecticut established counseling requirements that must be met before any entity may accept a final and complete reverse mortgage loan application or assess any fees for such a mortgage. See CT S.B. 150.

Maryland
Maryland has enacted a bill MD H.B. 1511 that alters a certain provision limiting the amount of a finder's fee that may be charged by a mortgage broker obtaining a loan with the same property within a 24-month period.

Louisiana
Louisiana updated requirements related to the release of inferior mortgages, liens, and privileges with regards to properties sold at sheriff sales. Please see LA H.B. 172 for details. Firms need to update their internal procedures accordingly and advise clients about the law change.

COMPLIANCE TIP

Although firms do not bear a significant financial burden associated with electronic document storage, electronic documents should still not be retained longer than the prescribed retention period due to the risks associated with potential data breaches, litigation, or discovery requests. 

DID YOU KNOW?

​You may have noticed the increased scrutiny by servicers  regarding your firm’s third-party service provider (TPSP) management. While the use of TPSPs can be an important advantage for the firm’s business, it also introduces increased risk in multiple areas. We will work with you to ensure that your firm is using a due diligence program that is consistent, thorough, and in compliance with various industry regulations. Contact us at 860-440-9500 for more information.

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Document Retention and Destruction Practices

BY SVIATLANA LIASHCHYNA
Firms handle an overwhelming number of documents daily, most of which fall into one of these four categories: client legal files; firm financial records; firm business records (ex. internal policies, procedures, compliance programs, quality control reviews, etc.); and firm HR records. 
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In accordance with the Model Rules of Professional Conduct, “upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client's interests, such as …

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