H-4364              _______________________________________________

                                          SUBSTITUTE HOUSE BILL NO. 2612

                        _______________________________________________

State of Washington                               51st Legislature                              1990 Regular Session

By House Committee on Financial Institutions & Insurance (originally sponsored by Representatives Locke, Prince, Dellwo, Zellinsky, Jacobsen and Scott)

Read first time 2/2/90.

AN ACT Relating to mortgage loan disclosures; and amending RCW 19.148.020 and 19.148.030.

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

        Sec. 1.  Section 2, chapter 98, Laws of 1989 and RCW 19.148.020 are each amended to read as follows:

          Unless the context requires otherwise, the definitions in this section apply throughout this chapter.

          (1) "Closing documents" means preliminary negotiations reduced to writing, estimated settlement charges, deeds, promissory notes, final loan contracts, and any other document necessary for completion of the loan transaction.

(2) "Lender" shall mean any person in the business of making a loan.

          (((2))) (3) "Loan" shall mean any loan used to finance the acquisition of a one-to-four family owner occupied residence located in this state.

          (((3))) (4) "Purchasing servicing agent" is any person who purchases, receives through transfer or assignment, or otherwise acquires the responsibility of the servicing for a loan.

          (((4))) (5) "Person" shall include an individual, firm, association, partnership, business, trust, corporation, or any other legal entity whether resident or nonresident.

        Sec. 2.  Section 3, chapter 98, Laws of 1989 and RCW 19.148.030 are each amended to read as follows:

          (1) If the servicing for the loan is subject to sale, transfer, or assignment, a lender shall so disclose in writing at the time of or prior to loan closing and shall also disclose in the same writing that when such servicing is sold, transferred, or assigned, the purchasing servicing agent is required to provide notification to the mortgagor.  If a lender, which has not provided the notice required by this subsection, consolidates with, merges with or is acquired by another institution, and thereafter loan servicing becomes subject to sale, transfer, or assignment, that institution shall within thirty days of such transaction make the disclosure in writing to the obligor primarily responsible for repaying each loan according to the records of the lender.

          (2) If the servicing of a loan is sold, assigned, transferred, or otherwise acquired by another person, the purchasing servicing agent shall:

          (a)(i) Issue corrected coupon or payment books, if used and necessary;

          (ii) Provide notification to the mortgagor at least thirty days prior to the due date of the first payment to the purchasing servicing agent, of the name, address, and telephone number of the division from whom the mortgagor can receive information regarding the servicing of the loan; and

          (iii) Inform the mortgagor of changes made regarding the servicing requirements including, but not limited to, interest rate, monthly payment amount, and escrow balance; and

          (b) Respond within fifteen business days upon receipt of a written request for information from a mortgagor.  A written response must include the telephone number of the company division who can assist the mortgagor.

          (3) Upon request of a loan applicant within a reasonable period of time prior to loan closing, a lender shall provide copies of all closing documents to the applicant.

(4) Any person injured by a violation of this chapter may bring an action for actual damages and reasonable attorneys' fees and costs incurred in bringing the action.