DFI has posted an interpretive letter (First Draft) answering questions about loan modification services in the State of Washington.
DATE: March 10, 2009
FROM: Deborah Bortner, Director, Division of Consumer Services
RE: Loan Modification Services – License Required under the MBPA or CLA
QUESTION PRESENTED: Must loan modification service providers be licensed to offer services to Washington residents?
BRIEF ANSWER: Yes, under the Mortgage Broker Practices Act (MBPA), chapter 19.146 RCW, or Consumer Loan Act (CLA), chapter 31.04 RCW.
DISCUSSION: The Division has received many inquiries regarding the applicability of the MBPA or CLA to loan modification services. According to callers, individuals are communicating directly with borrowers and lenders in order to negotiate loan modifications. In most of the calls, the caller inquires as to what restrictions are applicable to loan modification services…