Washington Adopts Mortgage Paper Securities Rule Amendments

Rules providing an optional method for registering mortgage paper securities were amended by the Washington Department of Financial Institutions, effective June 17, 2012. The rules strengthen investor suitability requirements, revise the calculation of the number of investors that may participate in a loan, establish requirements for participation agreements, revise net worth and bonding requirements, revise provisions regarding escrow accounts and escrow agreements, establish requirements for servicing agreements, codify the requirement for a disclaimer in advertisements, clarify the fiduciary duties of a mortgage broker-dealer, include additional dishonest and unethical practices, clarify the requirements for appraisals, clarify investors' rights to receive information and access records concerning their investments, and update recordkeeping requirements.