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[3][b] & 208-660-430[3][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 guaranteed. The cost of the interest 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. 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, 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.