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WBK Industry News - State Regulatory Developments

Montana Amends Mortgage Broker and Loan Originator Licensing Rules to Clarify Prohibition on Altering Mortgage Documents

The Montana Division of Banking and Financial Institutions (the Division) has amended its Mortgage Broker and Loan Originator Licensing Rules to clarify that Montana law prohibits licensees from attempting to alter mortgage documents using correction fluid, correction tape, or cutting and pasting.

Under the Montana Mortgage Act, licensees may not, among other things, knowingly alter any books, records, computer records, or other information.  According to the Division, the present rulemaking was undertaken because the Division has seen a number of cases recently in which mortgage brokers altered documents by using correction fluid, correction tape, and cutting and pasting signatures and dates on documents.  As a result, the Division has adopted a new definition of the term “alter” that specifically prohibits such actions.  Under the rule, a licensee that wishes to correct an error in a loan document is required to either (a) reprint the document, have it re-signed, and retain the original document noting in the file why the document was reprinted and re-signed; or (b) strike out the error, put the correct text beside it, and initial and date the change.

The new rule went into effect on September 9, 2017 and can be found here.