The Washington Department of Financial Institutions has adopted amended rules under the Consumer Loan Act (WAC 208-620) as authorized by Wash. Rev. Code Ann. §§ 43.320.040 and 31.04.165, with an effective date of November 24, 2019. The changes are intended to implement amendments to the federal SAFE Act, the federal law requiring the licensure of individual mortgage loan originators.
A notable change to the rules includes the addition of WAC 208-620-510(5), which provides an additional disclosure requirement related to interest rate locks. The rule states that a borrower must be provided a new rate lock agreement within three business days of a change to a locked interest rate. It further provides: “Changes to a locked interest rate can occur only if the borrower requests the charge or for valid reasons such as changes in loan to value, credit scores, or other loan factors directly affecting pricing. Lock extensions and relocks are also considered valid reasons for changes to a previously locked interest rate.”
Other rule changes are intended to clarify which fees are allowed to be charged for different types of loan products (WAC 208-620-520) and which fees are prohibited for certain loan products (WAC 208-620-563).
In addition to the amended rules, a modified Rate Lock Agreement model form was published. Accordingly, DocMagic has updated its version of the Washington Residential Mortgage Interest Rate Lock Agreement (DocMagic Form ID: WAIRLA.MSC) to follow the model form requirements. Changes to the form include the addition of a new section titled Discount Points/ Charges or Credits.
For further information regarding the Consumer Loan Act Rulemaking, click here.
If you have any questions regarding this article, please contact DocMagic’s Compliance Department.
