A new disclosure, the Colorado Mortgage Broker Disclosure (File name: COMBD.MSC), has been added to the Colorado disclosure matrix. Colorado House Bill 07-1322 was enacted as a measure to prevent mortgage fraud and became effective on June 1, 2007. Among the many new statutes that have become law through H.B. 07-1322, Colorado Revised Statutes § 12-61-914 requires a mortgage broker to provide a borrower with a written disclosure of numerous items concerning the borrower's loan within three (3) days after receipt of a loan application or any moneys from the borrower.

Although many of the items that must be disclosed are contained in the Federal Truth in Lending Disclosure Statement, Good Faith Estimate or Itemization of Amount Financed and the variable rate (ARM) program disclosure, it is unclear from a reading of Section 12-61-914 whether these disclosures may be incorporated by reference into the disclosure or whether these items must be expressly stated in said disclosure. DocMagic's Compliance Department contacted the Colorado Division of Real Estate for clarification, and the Mortgage Broker Program Specialist at the Division advised that no guidance can be given on this issue at this time. The Program Specialist further advised that hearings beginning on July 17, 2007 by a Mortgage Broker Rule Making Task Force will contemplate this and other issues related to the implementation of H.B. 07-1322. DocMagic will keep you apprised of any new developments in this area.

The Mortgage Broker Disclosure will be included in Colorado initial disclosure packages where the loan originator is a broker and for all loans, except where the secured property is investment property (No=owner-occupied and No=second home) and/or multifamily (5+ units) and commercial property.

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