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PDFWAC 208-620-552

Third-party residential loan modification service providers—What business practices are prohibited?

In addition to RCW 31.04.027, you are prohibited from:
(1) Collecting an advance fee.
(2) Charging total fees in excess of usual and customary charges, or total fees that are not reasonable in light of the service provided when providing residential mortgage loan modification services.
(3) Failing to provide a written agreement as prescribed by the director when providing residential mortgage modification services. See also WAC 208-620-545.
(4) As a condition to providing loan modification services requiring or encouraging a borrower to:
(a) Waive his or her legal defenses, counterclaims, and other legal rights against the servicer for future acts;
(b) Waive his or her right to contest a future foreclosure;
(c) Waive his or her right to receive notice before the owner or servicer of the loan initiates foreclosure proceedings;
(d) Agree to pay charges not enumerated in any agreement between the borrower and the lender, servicer, or owner of the loan; or
(e) Cease communication with the lender, investor, or loan servicer or stop or delay making regularly scheduled payments on an existing mortgage unless a mortgage loan modification is completely negotiated and executed with the lender or investor and the modification agreement itself provides for a cessation or delay in making regularly scheduled payments; or
(f) Enter into any contract or agreement to purchase a borrower's property.
(5) You are further prohibited from failing in a timely manner to:
(a) Communicate with or on behalf of the borrower;
(b) Act on any reasonable request from or take any reasonable action on behalf of a borrower.
(6) Engaging in false or misleading advertising. In addition to WAC 208-620-630, examples of false or misleading advertising include:
(a) Advertising which includes a "guarantee" unless there is a bona fide guarantee which will benefit a borrower.
(b) Advertising which makes it appear that a licensee has a special relationship with lenders when no such relationship exists.
(7) Leading a borrower to believe that the borrower's credit record will not be negatively affected by a mortgage loan modification when the licensee has reason to believe that the borrower's credit record may be negatively affected by the mortgage loan modification.
[Statutory Authority: RCW 43.320.040 and 31.04.165. WSR 13-24-024, § 208-620-552, filed 11/22/13, effective 1/1/14; WSR 12-18-047, § 208-620-552, filed 8/29/12, effective 11/1/12. Statutory Authority: RCW 43.320.040, 31.04.165 and 2010 c 35. WSR 10-20-122, § 208-620-552, filed 10/5/10, effective 11/5/10.]
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