Examination information, frequently asked questions, and resources for Washington Mortgage Brokers.
Mortgage Broker Entry Letter
Mortgage Broker Entry Letter - Prior To Examination
The entry letter above is what DFI requires of licensees prior to an examination.
The Washington State Department of Financial Institutions (DFI) is concerned with the security of sensitive information. In accordance with the federal Safeguards Rule (Title 16, Chapter I, Subchapter C, Part 314) and RCW 19.255.010, DFI is including an information security element in company examinations. Key information security topics will be addressed. The information security component of the examination will be performed separately from the other examination sections, but all examination sections will be included in one report. Please be prepared to provide documentation regarding your institution’s information security program during your next examination.
The following are resources regarding information security:
- Information Security Manager’s Questionnaire
- Information Security Basics
- Information Security Controls
- Information Security Topics
- Most Likely Suspects
- Resource List
- Failing to disclose an increase in fees that benefit the mortgage broker
RCW 19.146.030 (4)
- Advertising interest rates as “lowest rates,” “best rate guaranteed,” and “lowest rates guaranteed”
- Failing to deposit borrower funds for payment of third-party fees into a trust account
RCW 19.146.050(1) and WAC 208-660-410(3)
Mortgage Broker Examination FAQs
Answers to common questions about examinations conducted by DFI.
Am I required to establish an Anti-money Laundering program?
Yes. As of August 16, 2012, financial institutions are required to establish anti-money laundering programs and report suspicious activities under the Bank Secrecy Act.
See: The Financial Crimes Enforcement Network, Department of the Treasury, 31 CFR Section 1029.210
Can I charge or collect Discount Points when I broker a Conventional or FHA loans?
No. The Mortgage Broker Practices Act (MBPA) prohibits the charging of discount points when it is payable to any party that is not the actual lender on the residential mortgage loan.
How long must I keep my books and records?
Accurate and current books and records shall be readily available to the Department at least three years following the effective period to which the books and records relate.
What are the characteristics of occupancy fraud?
Occupancy fraud typically involves two or more overlapping applications for separate owner-occupied properties. In addition, occupancy fraud may also include some of these other characteristics:
- Both properties are within 50 miles of each other
- Same loan originator for each transaction
- Borrower’s income is different on each loan application
- The same credit report is used for both loan applications
- Different lenders for each transaction
- Exclusion of the refinance loan amount and payment on the loan application for the purchase transaction
- The refinance property is listed as a rental property on the loan application for the purchase transaction
- Cash-out amount from the refinance transaction is used as the down payment for the purchase transaction
- All loans close as owner-occupied
What will DFI do if it discovers occupancy fraud during an examination?
Evidence of occupancy fraud is referred to our Enforcement Unit for a possible enforcement action.
(1) Directly or indirectly employ any scheme, device, or artifice to defraud or mislead borrowers or lenders or to defraud any person;
Financial Examiner Supervisor