A compliance examination involves review of the loan files in a licensee’s:

The Designated Broker’s Questionnaire below is what DFI requires of licensee prior to an examination.

• Designated Broker's Questionnaire

Mortgage Broker Examination Manual

• Mortgage Broker Examination Manual
  A reference guide for licensees under the Mortgage Broker Practices Act

Preparing for an Examination

1. Keep a clean shop – Keep business records organized. Copies of your documents should be systematically stored for quick, routine access. Be familiar with how to pull reports from your loan origination system. You will be required to provide an Excel spreadsheet of all loans your company closed during the examination scope. The Designated Broker’s Questionnaire lists all the fields that are required on the list of loans. The Department recommends creating a custom report from the loan origination system, to capture the data points in the workbook, in anticipation of receiving a notice of a routine examination. This will significantly reduce the time and potential stress of completing the questionnaire, which is typically due within 30 days of the broker receiving it. Maintaining your records in an organized way, and preparing for an examination before receiving notice of it, means an easier examination process.
2. Pre-exam materials – Respond to every question in the Designated Broker’s Questionnaire. When a question asks for a document or policy, submit each document or policy for review. If a question is not applicable to your business, simply mark the appropriate check box as N/A.
3. Scheduling – The Department examines all mortgage broker licensees at least once every five years. If you are licensed with us, you will be examined. Several factors are used to determine when licensees are scheduled for an examination:
   • Prior Report of Examination ratings
   • Loan volume
   • Compliance history
   • Volume of complaints
   • Tips from the public

   The Department can typically accommodate reasonable requests for scheduling changes on routine examinations with advance notice. If you are going on vacation or have a big life event planned, let us know in advance and we will work with you to schedule the examination.

4. BOX.com – The Department utilizes BOX.com to receive Broker correspondence. If you do not have an existing account from a previous examination with us, you will be asked to create a free individual account that we will add to our secure network folders for the duration of your exam.
5. Mortgage Broker Examination Manual – Review the manual to get a better understanding of the examination process.
6. GovDelivery – Make sure you are signed up for GovDelivery to get notified of changes to the rules and other important updates. Sign Up for GovDelivery

Mortgage Broker Examination FAQs

Question: Is there a specific disclosure I must provide if I act as both the real estate agent and mortgage loan originator on the same transaction?

Answer: Yes, prior to providing mortgage services to borrowers, you must provide a disclosure to the borrower that contains the following language:

THIS IS TO GIVE YOU NOTICE THAT I OR ONE OF MY ASSOCIATES HAVE/HAS ACTED AS A REAL ESTATE BROKER OR SALESPERSON REPRESENTING THE BUYER/SELLER IN THE SALE OF THIS PROPERTY TO YOU. I AM ALSO A LOAN ORIGINATOR, AND WOULD LIKE TO PROVIDE MORTGAGE SERVICES TO YOU IN CONNECTION WITH YOUR LOAN TO PURCHASE THE PROPERTY. YOU ARE NOT REQUIRED TO USE ME AS A LOAN ORIGINATOR IN CONNECTION WITH THIS TRANSACTION. YOU ARE FREE TO COMPARISON SHOP WITH OTHER MORTGAGE BROKERS AND LENDERS, AND TO SELECT ANY MORTGAGE BROKER OR LENDER OF YOUR CHOOSING.

RCW 19.146.0201(14), WAC 208-660-300

Question: How long must I keep my books and records?

Answer: You must keep records relating to your mortgage broker business, including all loan documents, advertising, and financial records, for a minimum of three years after the last use or activity in the record.
RCW 19.146.060, WAC 208-660-450

Question: Does my company need an anti-money laundering program?

Answer: Yes, financial institutions, including mortgage brokers, are required to establish an anti-money laundering program and report suspicious activity under the Bank Secrecy Act. The program must be specific to the size, product offerings, and complexity of the licensee.
31 CFR Part 1029.210

Question: How does the Department determine if the exam is to be on-site vs off-site?

Answer: Several factors are used in determining the location of the exam. Factors include, but are not limited to: prior report ratings, loan volume, compliance history, number of loan originators, and number of branch locations.

Question: What is expected of me during an off-site exam?

Answer: You will be required to be available to respond to any requests or questions the examiner-in-charge may have during the course of the off-site examination. The examiner-in-charge will provide reasonable deadlines for you to provide additional requests. You must meet those deadlines.

Question: What does the Department want included when submitting loan files for review?

Answer: Everything. This includes, but is not limited to: every disclosure, credit report, invoice, broker or lender provided document, borrower communication, including all e-mails and file notes, and anything the borrower provided to the licensee.

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