In our June, 2008 issue, we published an article about a new model disclosure prescribed by WAC 208-600-200, which was adopted, in draft form, pursuant to new Section 3(1) in Substitute House Bill 2770.  Section 3(1) requires a separate, residential mortgage loan disclosure summary of all material terms to be provided to the borrower and, pursuant to Section 3(2), mandates that the Washington Department of Financial Institutions (DFI) adopt, by rule, a model mortgage loan summary disclosure meeting the requirements of Section 3(2).

As WAC 208-600-200 is still in draft form, the DFI has once again revised its rule as well as the model form prescribed by that draft rule.  Instead of prescribing one model disclosure (formerly, the Basic Facts About Your Mortgage Loan) to address both fixed rate and variable rate loans, the latest version of the proposed rule prescribes a model form for fixed rate loans and another for variable rate loans. For more information about Substitute House Bill 2770, WAC 208-600-200 and the latest model forms, click here.  

Although the model disclosures are still in draft form, DocMagic, Inc.'s Compliance Department is making these forms available, because SHB 2770 has arguably required a disclosure of material terms since its effective date of June 12, 2008.  The Washington Disclosure Summary - Fixed Rate Loans (WADSF.MSC) and the Disclosure Summary - Variable Rate Loans (WADSV.MSC) will select for both predisclosure and closing loan packages when the origination type is a lender or broker; the property type is not commercial property, vacant land and lots, or multifamily; and the occupancy status of the property is owner-occupied or a second home.  Furthermore, WADSF.MSC will return in fixed rate loan packages, and WADSV.MSC will return in variable rate loan packages.  Additionally, as the DFI's rule requires that this disclosure be the first document to be provided to the borrower, these disclosure will be placed first in the stacking order or document tree of the loan packages.

If you have any questions regarding the contents of this article, please contact the Compliance Department.

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