BILL REQ. #:  S-1057.1 

Read first time 02/05/2003.   Referred to Committee on Financial Services, Insurance & Housing.

     AN ACT Relating to residential mortgage loans; and adding new sections to chapter 31.04 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   A new section is added to chapter 31.04 RCW to read as follows:
     Each licensee providing an application for a residential mortgage loan shall give a written notice to each applicant that provides at least three sources of consumer information developed by governmental or nonprofit organizations that would assist the applicant in determining what loan terms would be suitable for the applicant. The notice must be in twelve-point bold faced type or larger on a single sheet of paper separate from all other documents. The notice must include the mailing address and phone number for the department of financial institutions and the internet address of the department's consumer information web site that includes mortgage borrowers and predatory lending information.

NEW SECTION.  Sec. 2   A new section is added to chapter 31.04 RCW to read as follows:
     A licensee shall provide, prior to the closing of a residential mortgage loan, a notice to each borrower of the annual percentage rate of the loan and whether or not the loan has a prepayment penalty. The notice must be in twelve-point bold faced type or larger on a separate sheet of paper that serves as the cover sheet for all documents to be signed at closing and must be in substantially the following form: "NOTICE TO BORROWER:
     (1) The annual percentage rate of your loan is . . .%
     (2) Prepayment penalty:
     (a) Your loan has a prepayment penalty of . . ..
     (b) Your loan does not have a prepayment penalty."