What definitions are applicable to these rules?
Unless the context clearly requires otherwise, the definitions in this section
apply throughout these rules.
"Act" means the Mortgage Broker Practices Act, chapter 19.146 RCW.
(2) "Advertising material" means any form of
sales or promotional materials used in connection with the mortgage broker
business. Advertising material includes, but is not limited to, newspapers,
magazines, leaflets, flyers, direct mail, indoor or outdoor signs or displays,
point-of-sale literature or educational materials, other printed materials;
radio, television, public address system, or other audio broadcasts; or
internet pages or social media pages.
(3) "Application" means the submission of a
borrower's financial information in anticipation of a credit decision relating
to a residential mortgage loan, which includes the borrower's name, monthly
income, Social Security number to obtain a credit report, the property address,
an estimate of the value of the property, and the mortgage loan amount sought.
An application may be in writing or electronically submitted, including a
written record of an oral application. If the submission does not state or
identify a specific property, the submission is an application for a
prequalification and not an application for a residential mortgage loan under
this part. The subsequent addition of an identified property to the submission
converts the submission to an application for a residential mortgage
(4) "Appraisal" means the act
or process of developing an opinion of value, the act pertaining to an
appraisal-related function, or any verbal or written opinion of value offered
by an appraiser. The opinion of value by the appraiser includes any
communication that is offered as a single point, a value range, a possible
value range, exclusion of a value, or a minimum value.
(5) "Branch office" means a fixed physical
location such as an office, separate from the principal place of business of
the licensee, where the licensee holds itself out as a mortgage
(6) "Branch office license"
means a branch office license issued by the director allowing the licensee to
conduct a mortgage broker business at the location indicated on the
(7) "Business day" means
Monday through Friday excluding federally recognized bank holidays.
"Compensation or gain" means
remuneration, benefits, or an increase in something having monetary value
including, but not limited to, moneys, things, discounts, salaries,
commissions, fees, duplicate payments of a charge, stock, dividends,
distributions of partnership profits, franchise royalties, credits representing
moneys that may be paid at a future date, the opportunity to participate in a
money-making program, retained or increased earnings, increased equity in a
parent or subsidiary entity, special or unusual bank or financing terms,
services of all types at special or free rates, sales or rentals at special
prices or rates, lease or rental payments based in whole or in part on the
amount of business referred, trips and payments of another person's expenses,
or reduction in credit against an existing obligation. "Compensation or gain"
is not evaluated solely on a loan by loan basis.
For example, a realtor advertising that buyers using their
services will receive free loan origination assistance is doing so in the
anticipation of "compensation or gain" through increased real estate
information systems" or "CLI system" means a real estate mortgage financing
information system that facilitates the provision of information to consumers
by a mortgage broker, loan originator, lender, real estate agent, or other
person regarding interest rates and other loan terms available from different
For purposes of this definition, the CLI system includes
computer hardware or software, an internet-based system, or any combination of
these, which provides information to consumers about residential mortgage
interest rates and other loan terms which are available from another
(10) "Computer loan
information system provider" or "CLI provider" is any person who provides a
computer loan information service, either directly, or as an owner-operator of
a CLI system, or both.
"Consumer Protection Act" means chapter 19.86 RCW.
"Control" including the terms
"controls," "is controlled by," or "is under common control" means the power,
directly or indirectly, to direct or cause the direction of the management or
policies of a person, whether through ownership of the business, by contract,
or otherwise. A person is presumed to control another person if such person is:
(a) A general partner, officer, director, or
employer of another person;
Directly or indirectly or acting in concert with others, or through one or more
subsidiaries, owns, holds with power to vote, or holds proxies representing,
more than 20 percent of the voting interests of another person; or
(c) Has similar status or function in the
business as a person in this definition.
"Convicted of a crime," irrespective of
the pronouncement or suspension of sentence, means a person:
(a) Has been convicted of the crime in any
(b) Has been
convicted of a crime which, if committed within this state would constitute a
crime under the laws of this state;
(c) Has plead guilty or no contest or nolo
contendere or stipulated to facts that are sufficient to justify a finding of
guilt to such a charge before a court or federal magistrate; or
(d) Has been found guilty of a crime by the
decision or judgment of a state or federal judge or magistrate, or by the
verdict of a jury.
"Depository institution" has the same meaning as in section 3 of the Federal
Deposit Insurance Act on the effective date of this section, and includes
points" or "points" means a fee paid by a borrower, upfront or at closing, to a
lender to reduce the interest rate of a residential mortgage loan. Pursuant to
Regulation X, discount points are to be reflected on the good faith estimate or
loan estimate and applicable settlement statement as points and as a dollar
(16) "Division of consumer
services" means the division of consumer services within the department of
financial institutions, or such other division within the department delegated
by the director to oversee implementation of the act and these rules.
"Dwelling" means the same as in
Regulation Z implementing the Truth in Lending Act which is a residential
structure that contains one to four units, whether or not that structure is
attached to real property. The term includes an individual condominium unit,
cooperative unit, mobile or manufactured home, and trailer, if it is used as a
residence. See 12 C.F.R. 1026.2
(18) "Examination" or "compliance
examination" means the examination performed by the division of consumer
services, or such other division within the department delegated by the
director to oversee implementation of the act and these rules to determine
whether the licensee is in compliance with applicable laws and
and regulations" includes, among others, the following:
"Alternative Mortgage Transaction Parity
Act" means the Alternative Mortgage Transaction Parity Act (AMTPA), 12 U.S.C.
Opportunity Act" means the Equal Credit Opportunity Act (ECOA), 15 U.S.C. Sec.
et seq., Regulation B, 12 C.F.R. Part 1002
"Fair Credit Reporting Act" means the
Fair Credit Reporting Act (FCRA), 15 U.S.C. Sec. 1681
"Federal Trade Commission Act" means the
Federal Trade Commission Act, 15
U.S.C. Sec. 41
"Gramm-Leach-Bliley Act (GLBA)" means the
Financial Modernization Act of 1999, 15
U.S.C. Sec. 6801
, and the
GLBA-man-dated Federal Trade Commission (FTC) privacy rules, at 16 C.F.R. Parts
"Home Equity Loan
Consumer Protection Act" means the Home Equity Loan Consumer Protection Act, 15
U.S.C. Sec. 1637
"Home Mortgage Disclosure Act" means the Home Mortgage Disclosure Act (HMDA),
U.S.C. Sec. 2801
, Regulation C, 12 C.F.R. Part 203
"Home Ownership and Equity Protection
Act" means the Home Ownership and Equity Protection Act (HOEPA), 15 U.S.C. Sec.
Act" means the Homeowners Protection Act of 1998 (HPA), 12 U.S.C. Sec. 4901
"MAP" means the Mortgage
Acts and Practices - Advertising, Regulation N, 12 C.F.R. Part 1014
"Real Estate Settlement Procedures Act"
means the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. Sec. 2601
seq., Regulation X, 12 C.F.R. Part 1024
"S.A.F.E. Act" means the Secure and Fair
Enforcement for Mortgage Licensing Act of 2008, Title V of the Housing and
Economic Recovery Act of 2008 (HERA), P.L. 110-289
, effective July 30, 2008,
codified at 12 U.S.C. 5101
; Regulation G, 12 C.F.R. Part 1007
; and Regulation
H, 12 C.F.R. Part 1008
"Telemarketing and Consumer Fraud and Abuse Prevention Act" means the
Telemarketing and Consumer Fraud and Abuse Prevention Act, 15
, Telemarketing Sales Rule, 16 C.F.R. Part 310
"Truth in Lending Act" means the Truth in
Lending Act (TILA), 15 U.S.C. Sec. 1601
et seq., Regulation Z, 12 C.F.R. Part
insured financial institution" means a savings bank, savings and loan
association, or credit union, whether state or federally chartered, or a
federally insured bank, authorized to conduct business in this state.
"Financial misconduct," for the purposes
of the act, means a criminal conviction for any of the following:
(a) Any conduct prohibited by the
(b) Any conduct prohibited by
statutes governing mortgage brokers in other states, or the United States, if
such conduct would constitute a violation of the act;
(c) Any conduct prohibited by statutes
governing other segments of the financial services industry, including but not
limited to the Consumer Protection Act, statutes governing the conduct of
securities broker dealers, financial advisers, escrow officers, title insurance
companies, limited practice officers, trust companies, and other licensed or
chartered financial service providers; or
(d) Any conduct commonly known as white
collar crime, including, but not limited to, embezzlement, identity theft, mail
or wire fraud, insider trading, money laundering, check fraud, or similar
number" means the NMLS unique identifier displayed as prescribed by the
director. Some examples of the way you may display your license number are:
NMLS ID 12345, NMLS 12345, NMLS #12345, MB-12345, or MLO-12345.
(23) "Licensed location" means a main office
or branch office, including an individual loan originator's residence, where
the licensee conducts business under the act with Washington residents or
Washington residential real estate and the licensee has obtained a main or
branch license through NMLS for that location.
(24) "Loan originator licensee" means a
natural person who is licensed as a loan originator or is subject to licensing
under RCW 19.146.200 or who is acting as a loan originator subject to any
provisions of the act.
originator's residence" means a loan originator's primary or secondary
residence located in the United States.
(26) "Material litigation" means any
litigation that would be relevant to the director's ruling on an application
for a license including, but not limited to, criminal or civil action involving
dishonesty or financial misconduct.
(27) "Mortgage broker licensee" means a
person that is licensed as a mortgage broker or is subject to licensing under
RCW 19.146.200 or is acting as a mortgage broker subject to any provisions of
(28) "Mortgage Broker
Practices Act" means chapter 19.146 RCW.
(29) "NMLS" means the Nationwide Multistate
Licensing System and Registry, Nationwide Mortgage Licensing System, NMLSR, or
such other name or acronym as may be assigned to the multistate system
developed by the Conference of State Bank Supervisors and the American
Association of Residential Mortgage Regulators and owned and operated by the
state regulatory registry, LLC, or any successor or affiliated entity, for the
licensing and registration of persons in the mortgage and other financial
"Out-of-state applicant or licensee" means a person subject to licensing that
maintains an office outside of this state.
(31) "Prepaid escrowed costs of ownership,"
as used in RCW 19.146.030(4), means any amounts prepaid by the borrower for the
payment of taxes, property insurance, interim interest, and similar items in
regard to the property used as security for the loan.
(32) "Principal" means any person who
controls, directly or indirectly through one or more intermediaries, or alone
or in concert with others, a 10 percent or greater interest in a partnership,
company, association, or corporation, and the owner of a sole
(33) "Rate lock
agreement" means an agreement with a borrower made by a mortgage broker, loan
originator, or lender in which the mortgage broker, loan originator, or lender
agrees that, for a period of time, a specific interest rate or other financing
terms will be the rate or terms at which it will make a loan available to that
(34) "Registered agent"
means a person located in Washington appointed to accept service of process for
mortgage loan originator" means any individual who meets the definition of
mortgage loan originator and is an employee of:
(a) A depository institution, a subsidiary
that is owned and controlled by a depository institution and regulated by a
federal banking agency, or an institution regulated by the farm credit
registered with, and maintains a unique identifier through, the NMLS.
"Residential real estate" is
real property upon which is constructed or intended to be constructed, a single
family dwelling or multiple family dwelling of four or less units.
Residential real estate includes, but is
not limited to:
(i) A single family
(ii) A duplex;
(iii) A triplex;
(iv) A fourplex;
(v) A single condominium in a condominium
(vi) A single unit within
(vii) A manufactured
(viii) A fractile, fee
simple interest in any of the above.
Residential real estate does not include:
(i) An apartment building or dwelling of five
or more units; or
(ii) A single
piece of real estate with five or more single family dwellings unless each
dwelling is capable of being financed independently of the other
"Table funding" means a settlement at which a mortgage loan is funded by a
contemporaneous advance of loan funds and an assignment of the loan to the
person advancing the funds. The mortgage broker originates the loan and closes
the loan in its own name with funds provided contemporaneously by a lender to
whom the closed loan is assigned.
"Third-party provider" means any person
other than a mortgage broker or lender who provides goods or services to the
mortgage broker in connection with the preparation of the borrower's loan and
includes, but is not limited to, credit reporting agencies, title companies,
appraisers, structural and pest inspectors, or escrow companies.
A lender is considered a third party only when the lender
provides lock-in arrangements to the mortgage broker in connection with the
preparation of a borrower's loan.
(39) "Underwriting" means a lender's detailed
credit analysis preceding the offering or making of a loan. The analysis may be
based on information furnished by the borrower (employment history, salary,
financial statements), the borrower's credit history from a credit report, the
lender's evaluation of the borrower's credit needs and ability to pay, and an
assessment of the collateral for the loan. While mortgage brokers may have
access to various automated underwriting systems to facilitate an evaluation of
the borrower's qualifications, the mortgage broker who qualifies or approves a
borrower in this manner is not the underwriter of the loan and cannot charge a
fee for underwriting the loan. Third-party charges the mortgage broker incurs
in using or accessing an automated system to qualify or approve a borrower may,
like other third-party expenses, be passed on to the borrower.