Washington State Mortgage Lender or Broker Licensing Application or Examination Support

Washington State has specific licensing and examination requirements which are quite explicit. As a leader in consumer protection, the state believes strongly in evaluating mortgage service providers and their compliance with the state's regulatory requirements. This results in some transparency, but also some apprehension.

On one hand, the regulator states, "you must submit everything at once; We will not prompt you for additional information." But we have seen correspondence where the regulators states that they are happy to assist and answer questions.

Here is a useful link to the Broker Examination Handbook

Loan Files - What to Keep? What to Send?

Among the requests you'll receive you will see a request for closed loan files. Companies struggle most in this  area defining what they must send. At the core we find that companies often do not systematically store records, so they must reprocess loan files after the fact to ensure that they include all required disclosures and exhibits. For this reason we provide a post-closing checklist for "State Examination Preparation" in our Quality Control Plan. 

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​​Item Required - Red Flag ID Theft Plan

Your most recent Red Flags Program also known as Identity Theft Prevention Program.  This is the standard plan you would use to help a customer who discovers unknown credit activity indicating possible ID Theft. In our program, we also have safeguards to prevent our activities from causing ID Theft. Further, if we have a breach, we identify what we do to remediate it. All this is in our IT/Cyber Security Plan which is here. It can be purchased as a stand-alone or as part of a package of documents which address ALL compliance required here. he or she discovered 

Bank Secrecy Act/Anti-Money Laundering 

Your most recent Bank Secrecy Act/Anti-Money Laundering policy and procedures (your AML Program).

This request is to address what you do if you find evidence of financial or other fraud in a loan file. Both lenders and brokers must address Anti-Money Laundering requirements. Many lenders and brokers don't feel that the rule applies to them, but it does; it is a fraud detection and reporting rule that is an extension of your Quality Control Plan. We provide this as a stand-alone BSA/AML Plan, as included with our quality control plan for brokers or for lenders, or with the Mortgage Compliance Package. 

Furthermore, the DFI will request your most recent AML reviews for the past 2-3 years. This usually is an independent review of your procedures and their implementation. We offer that here and we include all required training for employees AS WELL AS additional required training for managers. 

Disaster Recovery-Business Resumption Plan

Your Disaster Recovery Plan (sometimes called a Business Resumption Plan). 

This is also sometimes called a business continuity plan. In today's world, we are almost always able to recover our business through technology usage. The questions revealed in this request revolve around whether employees may work remotely, and the risks the company takes and exposes its customers to by allowing this.  See our Disaster Recovery Plan.

Washington State does not allow working from home without specific permission. During special situations, such as pandemic, they may allow the employee to work from home. The state is formulating permanent work from home guidelines. 

Washington Supervisory Plan

When the request asks for a supervisory plan, often our customers confuse this with a separate supervisory plan. But the company may actually already have policies and procedures for how their employees are to conduct their duties. THAT plan IS a supervisory plan. However, we do provide a supervisory plan for out of state companies supervising in-state originators, processors, and underwriters. 

​Here is the Washington State Sample Supervisory Plan
Here is an article describing how to document the job duties

Washington State Advertising Plan

The regulator requires copies of all residential mortgage loan advertising marketed by licensee to Washington. To anticipate problems associated with advertising, put in place an advertising policy and review checklist, as well as a training program for originators and sales staff. 

Include any Marketing Services Agreements (MSAs). Using a 3rd party for marketing does not insulate you against violations. You must vet vendors against your Vendor Management plan, and provide the vendor with a copy of your standards.  

Loan Originator Compensation Plans

Copies of all Washington mortgage loan originator compensation agreements. For brokers, this means your plans with your lenders, as well as your commission plans with your loan originator employees. The Anti-Steering Plan will cover you, but it's important to note that your plan is different than Originator Agreements. An agreement is a contract, and should be prepared by you and reviewed by an attorney. A Compliance Company cannot prepare an agreement, unless they are staffed by a licensed and duly admitted attorney.

Best Options for Compliance

Do it yourself option - Purchase the Broker Compliance Package or Lender Compliance Package, depending on your model.

Full Service option - purchase the Audit Preparation Service, which will include customizing, extracting and stacking the documents.