Cx2792 is provided pursuant to the provisions of Wash. Rev. Code Ann. §§ 19.146.010(3) and 19.146.030(2)(c) & (3) and Wash. Admin. Code §§ 208-620-510(3) through (5), 208-620-555(3)(b)(iv), 208-660-006, and 208-660-430(3)(c) & (d). It is also a duplicate of the model “Interest Rate Lock Agreement” published by the Washington Department of Financial Institutions (see https://dfi.wa.gov/mortgage-brokers/forms or https://dfi.wa.gov/consumer-loan-companies/forms).
Under Supra § 19.146.030(2)(c), the lock-in agreement must disclose “whether the lock-in agreement is guaranteed by the mortgage broker or lender” (also see Ibid. §§ 208-620-510[b] & 208-660-430[c]). Prior to November 2019 the model agreement contained a specific area for disclosing whether it was guaranteed or not (and by whom):
I/We have chosen TO LOCK the interest rate and terms of our loan. This Agreement [ ] is guaranteed by Name of Company offering lock-in agreement / [ ] is not gauranteed. The cost of the itnerest rate lock and the terms and conditions of the loan are detailed below:
In 2019, the DFI modified the model agreement and, notably, removed these checkboxes and made no further changes to explicitly state whether the agreement was guaranteed or not (https://dfi.wa.gov/rulemaking/consumer-loan-act-rulemaking and https://dfi.wa.gov/rulemaking/mortgage-broker-practices-act-rulemaking). Since that time, a fair number of clients have raised concerns that the model agreement is not sufficiently compliant with Washington’s statutory and administrative requirements.
The DFI supplied formal comments which alleviate these concerns. A draft of the revised model agreement was published with a request for comments in July and August of 2019. According to a summary prepared by the DFI when the final draft of the form was published in October 2019 (see “Attachment 2 to Concise Explanatory Statement”, p. 2), comments were received mentioning that the draft model agreement lacked verbiage regarding the guarantee. The DFI’s response to these comments was as follows:
“DFI response. No change made to the form. Using ‘locked’ implies guarantee.”
Thus, according to the DFI, the following verbiage implicitly discloses “whether the lock-in agreement is guaranteed by the mortgage broker or lender”:
The interest rate has been locked with Name of lender offering lock-in agreement. The cost, terms, and conditions of the interest rate lock are detailed below:
If you have any further questions or concerns related to this announcement, please contact Client Support at 1.800.497.3584.