S-4159 _______________________________________________
SENATE BILL NO. 6416
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State of Washington 50th Legislature 1988 Regular Session
By Senator McCaslin
Read first time 1/20/88 and referred to Committee on Financial Institutions & Insurance.
AN ACT Relating to financial institutions; adding a new chapter to Title 61 RCW; and providing an effective date.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
(1) "Application" means a written request for an extension of credit made in accordance with procedures established by the financial institution for the type of credit requested;
(2) "Lender" means any financial institution operated under Title 30, 31, 32, or 33 RCW or chapter 31.12 RCW and any mortgage company which operates or has a place of business in this state;
(3) "Borrower" means a person who becomes obligated by a residential mortgage loan agreement, either directly or indirectly, and includes, but is not limited to, mortgagors, grantors under deeds of trust, vendees under conditional land sales contracts, and persons who purchase real property securing a residential mortgage loan agreement, whether the person assumes the loan or purchases the property subject to the loan;
(4) "Residential mortgage loan" and "residential mortgage loan agreement" mean an agreement in which a mortgage, deed of trust, purchase money security interest arising under an installment sales contract, or equivalent consensual security interest is created or retained against the borrower's dwelling to finance the acquisition or initial construction of such dwelling;
(5) "Lock-in agreement" refers to an agreement on the interest rate to be used throughout the term of a residential mortgage loan; and
(6) "Deadline" means the date a residential mortgage loan agreement is intended to be consummated.
NEW SECTION. Sec. 2. (1) Upon receipt of a written application for a residential mortgage loan, the lender shall make a full written disclosure to each borrower containing an itemization and explanation of all fees and costs associated with obtaining a residential mortgage loan. A good faith estimate of a fee or cost shall be provided if the exact fee or cost is undeterminable. The written disclosure shall contain the following information:
(a) A good faith estimate of the residential mortgage loan application processing time;
(b) The current interest rate and points for the residential mortgage loan for which application is made;
(c) A statement stipulating the specific date when the interest rate will be locked-in by the lender or the interest rate that will apply to the loan if there is a lock-in agreement; and
(d) A statement that interest rates are subject to change unless there is a lock-in agreement.
(2) An estimated residential mortgage loan application processing date set forth in subsection (1)(a) of this section shall be considered the deadline for this agreement.
(3) An original disclosure provided pursuant to section 1 of this act may be amended by the lender with the prior written consent of the borrower. A written consent shall expressly state the changes to be made and the borrower's consent to these changes.
(4) No lender may impose terms and conditions for the extension of credit for a residential mortgage loan which are less favorable to the borrower than the terms and conditions which were disclosed to the borrower under subsection (1) of this section unless (a) the deadline contained in the disclosure has expired through the fault of the borrower and (b) excessive requests or conditions preceding completion of the residential mortgage loan agreement have not been placed on the borrower by the lender.
NEW SECTION. Sec. 3. Sections 1 and 2 of this act shall constitute a new chapter in Title 61 RCW.
NEW SECTION. Sec. 4. This act shall take effect July 1, 1988.