(1)
"Borrower" means an individual who consults with or retains a
licensee or person subject to this chapter in an effort to obtain or seek
information about obtaining a loan for personal, family, or household use, or a
residential mortgage loan modification, regardless of whether the individual
actually obtains a loan or residential mortgage loan modification. "Borrower"
also includes a "student education loan borrower."
(2)
"Director" means the
director of the department of financial institutions or his or her designated
representative.
(3)
"Educational institution" means:
(a) An entity that offers educational
credentials, instruction, or services prerequisite to or indicative of an
academic or professional degree beyond the secondary level;
(b) Any location where an entity is offering
postsecondary education in any form or manner for the purpose of instructing,
training, or preparing persons for any vocation or profession; and
(c) Any establishment licensed under chapter
18.16 RCW that offers curriculums of instruction in the practice of
cosmetology, hair design, barbering, esthetics, master esthetics, manicuring,
or instructor-trainee.
(4)
"Federal banking agencies"
means the Board of Governors of the Federal Reserve System, Comptroller of the
Currency, National Credit Union Administration, Federal Deposit Insurance
Corporation, and Consumer Financial Protection Bureau.
(5)
"Individual servicing a residential
mortgage loan" means a person who on behalf of a lender or servicer
licensed by this state, or a lender or servicer exempt from licensing, who
collects or receives payments including payments of principal, interest, escrow
amounts, and other amounts due, on existing obligations due and owing to the
licensed or exempt lender or servicer for a residential mortgage loan when the
borrower is in default, or in reasonably foreseeable likelihood of default,
working with the borrower and the licensed lender or servicer, collects data
and makes decisions necessary to modify either temporarily or permanently
certain terms of those obligations, or otherwise finalizing collection through
the foreclosure process.
For purposes of this definition "on behalf of a lender or
servicer" means that the individual person is employed by the lender or
servicer and does not receive any compensation or gain directly or indirectly
from the borrower for performing the described activities.
(6)
"License" means a license
issued under the authority of this chapter with respect to a single place of
business.
(7)
"Loan
processor" or "underwriter" means an individual who
performs clerical or support duties as an employee (not as an independent
contractor) of a person licensed or exempt from licensing and at the direction
of and subject to the supervision and instruction of an individual licensed, or
exempt from licensing, under this chapter. A residential mortgage loan
processor or underwriter engaged as an independent contractor by a licensee
must hold a mortgage loan originator license.
(8)
"Mortgage loan originator"
or
"loan originator" means an individual who for direct or
indirect compensation or gain or in the expectation of direct or indirect
compensation or gain:
(a) Takes a residential
mortgage loan application; or
(b)
Offers or negotiates terms of a residential mortgage loan, including short sale
transactions. An individual "offers or negotiates terms of a residential
mortgage loan" if the individual:
(i)
Presents for consideration by a borrower or prospective borrower particular
residential mortgage loan terms; or
(ii) Communicates directly or indirectly with
a borrower, or prospective borrower for the purpose of reaching a mutual
understanding about prospective residential mortgage loan terms.
Mortgage loan originator also includes an individual who for
compensation or gain performs residential mortgage loan modification services
or holds himself or herself out as being able to perform residential mortgage
loan modification services.
Mortgage loan originator also includes an individual who holds
himself or herself out as being able to perform any of the activities described
in this definition. For purposes of this definition, a person "holds themselves
out" by advertising or otherwise informing the public that the person engages
in any of the activities of a loan originator, including the use of business
cards, stationery, brochures, rate lists or other promotional items.
Mortgage loan originator does not include any individual who
performs purely administrative or clerical tasks and does not include a person
or entity solely involved in extensions of credit relating to timeshare plans,
as that term is defined in 11 U.S.C. Sec.
101(53D).
For the purposes of this definition, administrative or clerical
tasks mean the receipt, collection, and distribution of information common for
the processing of a loan in the mortgage industry and communication with a
consumer to obtain information necessary for the processing of a residential
mortgage loan. An individual who holds himself or herself out to the public as
able to obtain a loan is not performing administrative or clerical
tasks.
Mortgage loan originator does not include a person or entity
that only performs real estate brokerage activities and is licensed or
registered in accordance with applicable state law to conduct those activities,
unless the person or entity is compensated by a lender, a mortgage broker, or
other mortgage loan originator or by any agent of such a lender, mortgage
broker, or other mortgage loan originator. See the definition of real estate
brokerage activity in this subsection.
This definition does not apply to employees of a housing
counseling agency approved by the United States Department of Housing and Urban
Development unless the employees of a housing counseling agency are required
under federal law to be individually licensed as mortgage loan
originators.
(9)
"Residential mortgage loan
modification services" means activities conducted for compensation or
gain by persons not engaged in servicing the borrower's existing residential
mortgage loan. The activities may include negotiating, attempting to negotiate,
arranging, attempting to arrange, or otherwise offering to perform residential
mortgage loan modification services. The activities may also include the
collection of data for submission to another person performing mortgage loan
modification services or to a residential mortgage loan servicer.
(10)
"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), Public Law No. 110-289,
effective July 30, 2008; and Regulation G, 12 C.F.R. Part
1007 ; and Regulation
H, 12 C.F.R. Part
1008.
(11)
"Service" or
"servicing a loan" means, with respect
to residential mortgage loans, the following:
(a) Regulated activities.
(i) Collecting or attempting to collect
payments on existing obligations due and owing to the lender or investor,
including payments of principal, interest, escrow amounts, and other amounts
due;
(ii) Collecting fees due to
the servicer for the servicing activities;
(iii) Working with the borrower to collect
data and make decisions necessary to modify certain terms of those obligations
either temporarily or permanently; or
(iv) Otherwise finalizing collection through
the foreclosure process.
(b) Regulated persons.
(i) "Servicer." Persons directly engaged in
servicing.
(ii) "Master servicer."
Persons responsible for ongoing servicing administration either by directly
servicing or through servicing agreements with licensed or exempt subservicers.
Except that the director may issue a license waiver to a master servicer
servicing or administrating the servicing of fewer than twenty-five
loans.
(iii) "Subservicer." Persons
directly servicing pursuant to a servicing agreement with a master
servicer.
(c) Persons
not regulated.
(i) "Investor." Persons holding
securities or other types of instruments backed by pools of residential
mortgage loans. Investors are not servicers, master servicers, or
subservicers.
(ii) "Note buyers."
Persons who purchase mortgage loans without servicing rights and who are not
servicers, master servicers, or subservicers.
(12)
"Simple interest method"
means the method of computing interest payable on a loan by applying the rate
of interest specified in the note or its periodic equivalent to the unpaid
balance of the principal amount outstanding for the time outstanding. Interest
may not be compounded or payable in advance.
(a) Each payment must be applied as directed
in the loan documents. No more than forty-five days of prepaid interest may be
collected at the time of the loan closing.
(b) The prohibition on compounding interest
does not apply to reverse mortgage loans made in compliance with the Washington
State Reverse Mortgage Act within this chapter.
(13)
"Student education loan"
means:
(a) Any loan solely for personal,
family, or household use to finance postsecondary education and costs of
attendance at an educational institution, or any subsequent loan to refinance
the former; and
(b) Any loan to
refinance a payment plan or accounts receivable with a higher education
institution if the student is not enrolled in the higher education
institution.
(14)
"Student education loan servicer" does not include the following
when engaged in the activity of collecting student education loans in default:
(a) Collection agencies licensed in
Washington under chapter 19.16 RCW; and
(b) An attorney licensed in Washington
collecting student education loans in default as part of providing legal
services. This attorney exclusion may be extended to the attorney's bona fide
legal practice, but is otherwise an individual exclusion and may not be
extended to a separate business entity.
