When sponsorship is terminated, to whom must the originator turn over all records in their possession?

• A. The regulator
• B. The licensing agency
• C. The sponsoring entity
• D. The former employer

Answer: (C)

When sponsorship ends, the originator must turn over all records in their possession to the sponsoring entity. The sponsoring entity is the custodian and supervisor of the loan files created while the MLO was sponsored, so it holds responsibility for maintaining those records for regulatory compliance, audits, and borrower inquiries. The regulator or licensing agency oversees compliance but does not typically receive the files directly in ordinary course. The former employer may be the sponsor, but if sponsorship ends, the records go to the sponsoring entity, not to another party. This transfer keeps the files under the control of the entity that issued and supervised the license and ensures a smooth transition and proper retention.