Washington Administrative Code › Title 208 - Financial Institutions, Department of (See also Titles 50, 419, and 460) › Chapter 208-620 - Washington Consumer Loan Act › RESTRICTIONS, PROHIBITIONS AND GROUNDS FOR REVOCATION › Section 208-620-550 - What business practices are prohibited?

Current through Register Vol. 24-14, July 15, 2024
In addition to RCW     31.04.027, the following constitute an
				  "unfair or deceptive" act or practice:
(1) Failure to provide the exact pay-off
				amount as of a certain date within seven business days after being requested in
				writing to do so by a borrower of record or their authorized representative.
				Student education loan servicers must comply with this subsection or an
				applicable federal program requirement;
(2) Failure to record a borrower's payment as
				received on the day it is delivered to any of the licensee's locations during
				its regular working hours. If you are in compliance with the United States
				Department of Education contractual requirements, you are not subject to this
				subsection;
(3) Collecting more
				than forty-five days of prepaid interest at the time of loan closing;
(4) Soliciting or entering into a contract
				with a borrower that provides in substance that the licensee may earn a fee or
				commission through its "best efforts" to obtain a loan even though no loan is
				actually obtained for the borrower;
(5)
Engaging in unfair or deceptive
				advertising practices.
Unfair advertising may include advertising that
				offends public policy, or causes substantial injury to consumers or to
				competition in the marketplace. See also WAC 208-620-630;
(6) Negligently making any false statement or
				knowingly and willfully making any omission of material fact in connection with
				any reports filed with the department by a licensee or in connection with any
				application, examination or investigation conducted by the
				department;
(7) Making any payment,
				directly or indirectly, or withholding or threatening to withhold any payment,
				to any appraiser of a property, for the purposes of influencing the independent
				judgment of the appraiser with respect to the value of the property;
(8) Leaving blanks on a loan origination
				document that is signed by the borrower or providing the borrower with loan
				origination documents with blanks;
(9) Failing to clearly disclose to a borrower
				whether the payment advertised or offered for a real estate loan includes
				amounts for taxes, insurance or other products sold to the borrower;
(10) Purchasing insurance on an asset secured
				by a loan without first attempting to contact the borrower by mailing one or
				more notices to the last known address of the borrower, unless mail has been
				previously returned as undeliverable from the address, in order to verify that
				the asset is not otherwise insured;
(11) Willfully filing a lien on property
				without a legal basis to do so;
(12) Coercing, intimidating, or threatening
				borrowers in any way with the intent of forcing them to complete a loan
				transaction;
(13) Failing to
				reconvey title to collateral, if any, within sixty business days when the loan
				is paid in full;
(14) Failing to
				timely and completely comply with any directive, subpoena, or order issued by
				the department;
(15) Negligently
				delaying the closing of a residential mortgage loan which results in increased
				interest, costs, fees, or charges payable by the borrower;
(16) Negligently delaying the refinance or
				modification of a student education loan which results in increased interest,
				costs, fees, or other charges payable by the borrower or which results in the
				proposed refinancing or modification becoming unavailable, or both;
(17) Steering a borrower to a residential
				mortgage loan with less favorable terms than they qualify for in order to
				increase the compensation paid to the company or mortgage loan originator. An
				example is counseling, or directing a borrower to accept a residential mortgage
				loan product with a risk grade less favorable than the risk grade the borrower
				would qualify for based on the licensee or other regulated person's then
				current underwriting guidelines, prudently applied, considering the information
				available to the licensee or other regulated person, including the information
				provided by the borrower;
(18)
				Failing to indicate on all residential mortgage loan applications, initial and
				revised, the company's unique identifier, the loan originator's unique
				identifier, and the date the application was taken or revised;
(19) Receiving compensation or anything of
				value from any party for assisting in real estate "flopping." Flopping occurs
				during some short sales where the value of the property is misrepresented to
				the lender who then authorizes the sale of the property for less than market
				value. The property is then resold at market value or near market value for a
				profit. The failure to disclose the true value of the property to the lender
				constitutes fraud and is a violation of this chapter;
(20) Receiving compensation for making the
				loan and for brokering the loan in the same transaction;
(21) Charging a fee in a residential mortgage
				loan transaction that is more than the fees allowed by the state or federal
				agency overseeing the specific type of loan transaction. Examples include, but
				are not limited to, loans insured or guaranteed by the Veterans Administration,
				Home Equity Conversion Mortgages insured by HUD, and loans offered through the
				United States Department of Agriculture Rural Development;
(22) Making, in any manner, any false or
				deceptive statement or representation with regard to the rates, points, or
				other financing terms or conditions for a residential mortgage loan. An example
				is advertising a discounted rate without clearly and conspicuously disclosing
				in the advertisement the cost of the discount to the borrower and that the rate
				is discounted;
(23) Servicing a
				usurious loan;
(24) Misrepresenting
				a residential mortgage loan as a business purpose loan.
Statutory Authority:
								RCW
								   43.320.040 and
								31.04.165. 12-18-047, §
											208-620-550, filed 8/29/12,
								effective 11/1/12. Statutory Authority:
								RCW
								   43.320.040,
								31.04.165 and   2010 c  35.
								10-20-122, §
											208-620-550, filed 10/5/10,
								effective 11/5/10. Statutory Authority:
								RCW
								   43.320.040,
								31.04.165,
								2009 c
								120, and
								2009 c
								149. 09-24-090, §
											208-620-550, filed 12/1/09,
								effective 1/1/10. Statutory Authority:
								RCW
								   43.320.040. 08-15-125, §
											208-620-550, filed 7/22/08,
								effective 8/22/08. Statutory Authority:
								RCW
								   31.04.165,
								31.04.015,
								31.04.045,
								31.04.075,
								31.04.085,
								31.04.093,
								31.04.102,
								31.04.115,
								31.04.145,
								31.04.155, and
								31.04.175. 06-04-053, §
											208-620-550, filed 1/27/06,
								effective 2/27/06.