Mortgage Concepts is a recurring video series covering best practices and compliance education for California mortgage loan originators. This video discusses recordkeeping rules for mortgage loan originators (MLOs) under Regulation O. For course credit toward renewing your NMLS license, visit

Regulation O recordkeeping

Mortgage relief service providers need to maintain records as evidence of compliance. Regulation O dictates which compliance records providers must keep. Providers can keep the records in the same manner, format and location as other documentation used in the regular course of business. [12 CFR §1015.9(c-d)]

Required records must be maintained for 24 months, beginning at the document creation date. Let’s take a look at Regulation O’s required records. Mortgage assistance relief service providers need to keep:

  • all contracts or other agreements between the provider and consumer for a mortgage assistance relief service;
  • copies of all textual communications between the provider and consumer taking place before the consumer entered into a relief service agreement;
  • copies of all documents or telephone recordings created to comply with the requirement to monitor employees and contractors representing the service provider;
  • all consumer files containing the names, phone numbers, dollar amounts paid and descriptions of mortgage assistance relief services purchased;
  • copies of all substantially different sales scripts, training materials, commercial communications or other marketing materials, including websites, for any mortgage assistance relief service; and
  • copies of the documentation the provider gave to the consumer when they executed a contract between them and the mortgage holder or servicer integrating the relief offer. [12 CFR §1015.5(a); 12 CFR §1015.9(a); 12 CFR §1015.9(b)(1)(i)]

In addition, compliant providers will take reasonable steps to monitor and ensure all employees and independent contractors comply with Regulation O. Compliance checks will include evaluations of telemarketing practices, which include any plan, program or campaign used to encourage consumers to purchase service by use of one or more telephones and which involves more than one interstate telephone call. At minimum, these steps include:

  • random performance checks by recording individuals engaged in telemarketing sales or customer service roles;
  • establishing guidelines for receiving and responding to customer complaints; and
  • determining the number and content of consumer complaints. Service providers need to handle those complaints by
    • initiating a prompt and thorough investigation;
    • disciplining, training or terminating employees or contractors who fail to comply with Regulation O; and
    • maintaining evidence the complaint was received and responded to. [12 CFR §1015.2; 12 CFR §1015.9(b)]

Note that attorneys are exempt from all requirements of Regulation O except the prohibition against advance fees, and the advance fee disclosures, if they:

  • offer mortgage assistance relief services as part of their law practice;
  • are licensed to practice law in the state in which the consumer for whom the attorney is providing the mortgage assistance relief services resides or in which the consumer’s home is located; and
  • comply with all state laws and regulations, including licensing regulations, applicable to client trust accounts. [12 CFR §1015.7(a)]

Attorneys who meet the qualifications for exemption from Regulation O may also be exempt from the advance fee prohibitions if the attorneys deposit funds received from consumers before conducting legal services in a client trust account and comply with all state laws and regulations, including licensing regulations, related to client trust accounts. [12 CFR §1015.7(b)]

Client trust accounts, which are separate accounts, are created by licensed attorneys with the intention of holding clients’ funds. The account must be:

  • kept in accordance with all relevant state laws and regulations, including licensing regulations; and
  • located in the same state as the attorney’s office or elsewhere if the location is in the United Sates and approved by the consumer whose funds are being held in the account. [12 CFR §1015.7]