Multiple Agency Fiscal Note Summary — 5109 SB: Mortgage lending fraud acc.

Summary

Multiple Agency Fiscal Note Summary for 5109 SB, titled Mortgage lending fraud acc., marked Final 1/27/2025, followed by notes from the Office of State Treasurer and the Department of Financial Institutions, a Department of Commerce local government fiscal note and ten-year analysis forms. The Department of Financial Institutions shows estimated cash receipts of 2,355,550 for 2025-27, 3,701,165 for 2027-29 and 3,028,358 for 2029-31. Its note says the bill would increase the charge assessed on recording a deed of trust and remove the sunset clause, with the current expiration date June 30, 2027. The local government note shows county revenue of 123,975 for 2025-27 and no expenditure impact on county auditors.

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Multiple Agency Fiscal Note Summary
Bill Number: 5109 SB Title: Mortgage lending fraud acc.

Estimated Cash Receipts
Agency Name 2025-27 2027-29 2029-31
GF-State NGF-Outlook Total GF-State NGF-Outlook Total GF-State NGF-Outlook Total
Office of State Non-zero but indeterminate cost and/or savings. Please see discussion.
Treasurer
Department of 0 0 2,355,550 0 0 3,701,165 0 0 3,028,358
Financial Institutions

Total $ 0 0 2,355,550 0 0 3,701,165 0 0 3,028,358

Agency Name 2025-27 2027-29 2029-31
GF- State Total GF- State Total GF- State Total
Local Gov. Courts
Loc School dist-SPI
Local Gov. Other 123,975 194,797 159,386
Local Gov. Total 123,975 194,797 159,386

Estimated Operating Expenditures
Agency Name 2025-27 2027-29 2029-31
FTEs GF-State NGF-Outlook Total FTEs GF-State NGF-Outlook Total FTEs GF-State NGF-Outlook Total
Office of State .0 0 0 0 .0 0 0 0 .0 0 0 0
Treasurer
Department of .0 0 0 0 .0 0 0 0 .0 0 0 0
Financial
Institutions

Total $ 0.0 0 0 0 0.0 0 0 0 0.0 0 0 0

Estimated Capital Budget Expenditures
Agency Name 2025-27 2027-29 2029-31
FTEs Bonds Total FTEs Bonds Total FTEs Bonds Total
Office of State Treasurer .0 0 0 .0 0 0 .0 0 0
Department of Financial .0 0 0 .0 0 0 .0 0 0
Institutions

Total $ 0.0 0 0 0.0 0 0 0.0 0 0

Estimated Capital Budget Breakout
NONE

FNPID 71932
:
FNS029 Multi Agency rollup
Prepared by: Megan Tudor, OFM Phone: Date Published:
(360) 890-1722 Final 1/27/2025

FNPID 71932
:
FNS029 Multi Agency rollup
Individual State Agency Fiscal Note

Bill Number: 5109 SB Title: Mortgage lending fraud acc. Agency: 090-Office of State Treasurer

Part I: Estimates
No Fiscal Impact

Estimated Cash Receipts to:
Non-zero but indeterminate cost and/or savings. Please see discussion.

Estimated Operating Expenditures from:
NONE

Estimated Capital Budget Impact:

NONE

The cash receipts and expenditure estimates on this page represent the most likely fiscal impact. Factors impacting the precision of these estimates,
and alternate ranges (if appropriate), are explained in Part II.

Check applicable boxes and follow corresponding instructions:
If fiscal impact is greater than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete entire fiscal note
form Parts I-V.
X If fiscal impact is less than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete this page only (Part I).

Capital budget impact, complete Part IV.

Requires new rule making, complete Part V.

Legislative Contact: Clinton McCarthy Phone: 360-786-7319 Date: 01/13/2025
Agency Preparation: Dan Mason Phone: (360) 902-8990 Date: 01/27/2025
Agency Approval: Dan Mason Phone: (360) 902-8990 Date: 01/27/2025
OFM Review: Megan Tudor Phone: (360) 890-1722 Date: 01/27/2025

Form FN (Rev 1/00) 198,990.00 Request # 002-2
FNS063 Individual State Agency Fiscal Note 1 Bill # 5109 SB
Part II: Narrative Explanation
II. A - Brief Description Of What The Measure Does That Has Fiscal Impact
Significant provisions of the bill and any related workload or policy assumptions that have revenue or expenditure impact on the responding agency by
section number.

SB 5109 amends the mortgage lending fraud prosecution account.
(1) removes the expiration date in RCW 36.22.181 and increases a surcharge.
(2) removes the expiration date in RCW 43.320.140.

The general fund is the recipient of the earnings from investments under RCW 43.79A.040(4).

There will be some de-minimis work for OST which can be completed within current practices and resources.
II. B - Cash receipts Impact
Cash receipts impact of the legislation on the responding agency with the cash receipts provisions identified by section number and when appropriate, the
detail of the revenue sources. Description of the factual basis of the assumptions and the method by which the cash receipts impact is derived. Explanation
of how workload assumptions translate into estimates. Distinguished between one time and ongoing functions.

Projected cash flows are currently unavailable; therefore, estimated earnings from investments are indeterminable.

There may be an impact on the debt service limitation calculation. Changes to the earnings credited to the general fund
impacts, by an equal amount, general state revenues.
II. C - Expenditures
Agency expenditures necessary to implement this legislation (or savings resulting from this legislation), with the provisions of the legislation that result in
the expenditures (or savings) identified by section number. Description of the factual basis of the assumptions and the method by which the expenditure
impact is derived. Explanation of how workload assumptions translate into cost estimates. Distinguished between one time and ongoing functions.

Part III: Expenditure Detail
III. A - Operating Budget Expenditures
NONE
III. B - Expenditures by Object Or Purpose
NONE

III. C - Operating FTE Detail: FTEs listed by classification and corresponding annual compensation. Totals agree with total FTEs in Part I
and Part IIIA.
NONE

III. D - Expenditures By Program (optional)
NONE

Part IV: Capital Budget Impact
IV. A - Capital Budget Expenditures
NONE

IV. B - Expenditures by Object Or Purpose
NONE

Mortgage lending fraud acc. 090-Office of State Treasurer
Form FN (Rev 1/00) 198,990.00 Request # 002-2
FNS063 Individual State Agency Fiscal Note 2 Bill # 5109 SB
IV. C - Capital Budget Breakout
Acquisition and construction costs not reflected elsewhere on the fiscal note and description of potential financing methods.
NONE

IV. D - Capital FTE Detail: FTEs listed by classification and corresponding annual compensation. Totals agree with total FTEs in Part IVB.

NONE

Part V: New Rule Making Required
Provisions of the bill that require the agency to adopt new administrative rules or repeal/revise existing rules.

Mortgage lending fraud acc. 090-Office of State Treasurer
Form FN (Rev 1/00) 198,990.00 Request # 002-2
FNS063 Individual State Agency Fiscal Note 3 Bill # 5109 SB
Individual State Agency Fiscal Note

Bill Number: 5109 SB Title: Mortgage lending fraud acc. Agency: 102-Department of Financial
Institutions

Part I: Estimates
No Fiscal Impact

Estimated Cash Receipts to:
ACCOUNT FY 2026 FY 2027 2025-27 2027-29 2029-31
Mortgage Lending Fraud Prosecution 1,052,610 1,302,940 2,355,550 3,701,165 3,028,358
Account-Non-Appropriated 07A-6
Total $ 1,052,610 1,302,940 2,355,550 3,701,165 3,028,358

Estimated Operating Expenditures from:
NONE

Estimated Capital Budget Impact:

NONE

Check applicable boxes and follow corresponding instructions:
If fiscal impact is greater than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete entire fiscal note
X
form Parts I-V.
If fiscal impact is less than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete this page only (Part I).

Capital budget impact, complete Part IV.

X Requires new rule making, complete Part V.

Legislative Contact: Clinton McCarthy Phone: 360-786-7319 Date: 01/13/2025
Agency Preparation: Cale Zimmerman Phone: (360) 902-0507 Date: 01/15/2025
Agency Approval: Emily Fitzgerald Phone: (360) 902-8780 Date: 01/15/2025
OFM Review: Megan Tudor Phone: (360) 890-1722 Date: 01/21/2025

Form FN (Rev 1/00) 197,038.00 Request # 25-005-1
FNS063 Individual State Agency Fiscal Note 1 Bill # 5109 SB
Part II: Narrative Explanation
II. A - Brief Description Of What The Measure Does That Has Fiscal Impact
Significant provisions of the bill and any related workload or policy assumptions that have revenue or expenditure impact on the responding agency by
section number.

In 2003, the legislature established the Mortgage Lending Fraud Prosecution Account (MLFPA) in order to fund criminal
prosecution of fraudulent activities related to mortgage lending. The Department of Financial Institutions (DFI) has
administered the MLFPA since its creation in 2003. The original legislation had an expiration of June 30, 2006, which was
amended in 2006, 2011, 2016, and 2021. The current date of expiration for the MLFPA is June 30, 2027. Funding for the
MLFPA is generated by a $1 charge assessed when a deed of trust is recorded. This proposed legislation seeks to increase
the $1 charge to $5 and removes the sunset clause.
II. B - Cash receipts Impact
Cash receipts impact of the legislation on the responding agency with the cash receipts provisions identified by section number and when appropriate, the
detail of the revenue sources. Description of the factual basis of the assumptions and the method by which the cash receipts impact is derived. Explanation
of how workload assumptions translate into estimates. Distinguished between one time and ongoing functions.

The MLFPA is funded by a $1 surcharge collected by the county auditor at the time of recording each deed of trust. The
proposed legislation would increase that fee to $5 and remove the sunset clause. The County Auditor is permitted to retain
up to 5% of the funds collected to administer the process of collecting the surcharge; therefore the MLFPA receives at
least 95% of the total collected surcharges. The estimated cash receipts reflect the Department’s portion of the gross
surcharge collections as projected quarterly by the Office of Financial Management (OFM). Variances from quarter to
quarter are covered by the existing fund balance. Current forecasts from OFM extend to fiscal year 2029. Projections for
fiscal year 2030 and beyond are an average of fiscal years 2026 - 2029.
II. C - Expenditures
Agency expenditures necessary to implement this legislation (or savings resulting from this legislation), with the provisions of the legislation that result in
the expenditures (or savings) identified by section number. Description of the factual basis of the assumptions and the method by which the expenditure
impact is derived. Explanation of how workload assumptions translate into cost estimates. Distinguished between one time and ongoing functions.

DFI administers the MLFPA and authorizes expenditures from this fund in the form of contracts with prosecutors’ offices.
DFI does not expend MLFPA funds for its own regulatory activities. From 2022 to present, funds from the MLFPA have
been used to resolve 30 cases resulting in more than $500,000 in restitution ordered. Due to the complexity and
specialization of mortgage fraud cases, most of these would unlikely have seen prosecution.

The proposed legislation would increase the funding for the MLFPA account. Increased funding could result in contracts
with additional prosecutors' offices and/or an increase in the number of cases being investigated. Expanded contracting
efforts could also result in an increased need for in DFI staff time to manage the MLFPA account, but those costs would be
absorbed.

Part III: Expenditure Detail
III. A - Operating Budget Expenditures
NONE
III. B - Expenditures by Object Or Purpose
NONE

III. C - Operating FTE Detail: FTEs listed by classification and corresponding annual compensation. Totals agree with total FTEs in Part I
and Part IIIA.
NONE

Mortgage lending fraud acc. 102-Department of Financial Institutions
Form FN (Rev 1/00) 197,038.00 Request # 25-005-1
FNS063 Individual State Agency Fiscal Note 2 Bill # 5109 SB
III. D - Expenditures By Program (optional)
NONE

Part IV: Capital Budget Impact
IV. A - Capital Budget Expenditures
NONE

IV. B - Expenditures by Object Or Purpose
NONE

IV. C - Capital Budget Breakout
Acquisition and construction costs not reflected elsewhere on the fiscal note and description of potential financing methods.
NONE

IV. D - Capital FTE Detail: FTEs listed by classification and corresponding annual compensation. Totals agree with total FTEs in Part IVB.

NONE

Part V: New Rule Making Required
Provisions of the bill that require the agency to adopt new administrative rules or repeal/revise existing rules.

No, the Department of Financial Institutions does not anticipate rulemaking.

Mortgage lending fraud acc. 102-Department of Financial Institutions
Form FN (Rev 1/00) 197,038.00 Request # 25-005-1
FNS063 Individual State Agency Fiscal Note 3 Bill # 5109 SB
LOCAL GOVERNMENT FISCAL NOTE
Department of Commerce

Bill Number: 5109 SB Title: Mortgage lending fraud acc.

Part I: Jurisdiction-Location, type or status of political subdivision defines range of fiscal impacts.
Legislation Impacts:
Cities:
X Counties: The fee county auditors collect at the time of recording each deed of trust is increased from $1 to $5, and auditors retain
5% of the amount collected.
Special Districts:

Specific jurisdictions only:
Variance occurs due to:

Part II: Estimates
No fiscal impacts.

Expenditures represent one-time costs:

Legislation provides local option:

Key variables cannot be estimated with certainty at this time:

Estimated revenue impacts to:

Jurisdiction FY 2026 FY 2027 2025-27 2027-29 2029-31
County 55,400 68,575 123,975 194,797 159,386
TOTAL $ 55,400 68,575 123,975 194,797 159,386
GRAND TOTAL $ 478,158

Estimated expenditure impacts to:
None

Part III: Preparation and Approval
Fiscal Note Analyst: Hailey Brown Phone: 360-725-5035 Date: 01/21/2025
Leg. Committee Contact: Clinton McCarthy Phone: 360-786-7319 Date: 01/13/2025
Agency Approval: Alice Zillah Phone: 360-725-5035 Date: 01/21/2025
OFM Review: Megan Tudor Phone: (360) 890-1722 Date: 01/21/2025
Page 1 of 2 Bill Number: 5109 SB
FNS060 Local Government Fiscal Note
Part IV: Analysis
A. SUMMARY OF BILL
Description of the bill with an emphasis on how it impacts local government.
The proposed legislation increases the fee county auditors collect at the time of recording each deed of trust from $1 to
$5.

The auditor retains up to 5% of the collected fee, only for the purpose of administering the collection. The remaining funds
shall be transmitted monthly to the state treasurer who will deposit the funds into the Mortgage Lending Fraud Prosecution
Account (MLFPA) created in RCW 43.320.140.
B. SUMMARY OF EXPENDITURE IMPACTS
Expenditure impacts of the legislation on local governments with the expenditure provisions identified by section number and when
appropriate, the detail of expenditures. Delineated between city, county and special district impacts.

This bill will have no expenditure impact on County Auditors and therefore no expenditure impact on local governments.
According to the Washington State Association of County Auditors, this bill reflects current staff practice and does not
trigger additional vendor fees that would create costs for counties.
C. SUMMARY OF REVENUE IMPACTS
Revenue impacts of the legislation on local governments, with the revenue provisions identified by section number, and when
appropriate, the detail of revenue sources. Delineated between city, county and special district impacts.

The proposed legislation would increase the funds auditors will retain for each deed of trust filed. This bill seeks to
increase the $1 charge to $5. The County Auditor is permitted to retain up to 5% of the funds collected to administer the
process of collecting the surcharge; therefore the MLFPA receives at least 95% of the total collected surcharges.

The estimated cash receipts reflect the County Auditors’ portion of the gross surcharge collections as projected quarterly
by the Office of Financial Management (OFM). Variances from quarter to quarter are covered by the existing fund
balance. Current forecasts from OFM extend to fiscal year 2029. Projections for fiscal year 2030 and beyond are an
average of fiscal years 2026 - 2029. This bill results in a positive revenue impact to County Auditors.

SOURCES:
Washington State Association of County Auditors
Department of Financial Institutions Fiscal Note, SB 5109 (2025)

Page 2 of 2 Bill Number: 5109 SB
FNS060 Local Government Fiscal Note
Multiple Agency Ten-Year Analysis Summary
Bill Number Title
5109 SB Mortgage lending fraud acc.

This ten-year analysis is limited to the estimated cash receipts associated with the proposed tax or fee increases.

Estimated Cash Receipts

Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year 2026-35
2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 TOTAL
Office of State Treasurer 0 0 0 0 0 0 0 0 0 0 0
Department of Financial Institutions 1,052,610 1,302,940 1,695,110 2,006,055 1,514,179 1,514,179 1,514,179 1,514,179 1,514,179 1,514,179 15,141,789
Total 1,052,610 1,302,940 1,695,110 2,006,055 1,514,179 1,514,179 1,514,179 1,514,179 1,514,179 1,514,179 15,141,789

FNS067 Multiple Agency Ten-Year Analysis Summary 1
Ten-Year Analysis
Bill Number Title Agency
5109 SB Mortgage lending fraud acc. 090 Office of State Treasurer

This ten-year analysis is limited to agency estimated cash receipts associated with the proposed tax or fee increases. The Office of Financial Management
ten-year projection can be found at http://www.ofm.wa.gov/tax/default.asp .

Estimates
X No Cash Receipts Partially Indeterminate Cash Receipts Indeterminate Cash Receipts

Name of Tax or Fee Acct
Code

Agency Preparation: Dan Mason Phone: (360) 902-8990 Date: 1/27/2025 4:30:59 pm
Agency Approval: Dan Mason Phone: (360) 902-8990 Date: 1/27/2025 4:30:59 pm
OFM Review: Phone: Date:

FNS066 Ten-Year Analysis 1
Ten-Year Analysis
Bill Number Title Agency
5109 SB Mortgage lending fraud acc. 102 Department of Financial Institutions

Estimates
No Cash Receipts Partially Indeterminate Cash Receipts Indeterminate Cash Receipts

Estimated Cash Receipts

Name of Tax or Fee Acct Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year 2026-35
Code 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 TOTAL
Mortgage Loan Fraud Prosecution 07A 1,052,610 1,302,940 1,695,110 2,006,055 1,514,179 1,514,179 1,514,179 1,514,179 1,514,179 1,514,179 15,141,789
Account Recording Fee

Total 1,052,610 1,302,940 1,695,110 2,006,055 1,514,179 1,514,179 1,514,179 1,514,179 1,514,179 1,514,179 15,141,789

Biennial Totals 2,355,550 3,701,165 3,028,358 3,028,358 3,028,358 15,141,789

Narrative Explanation (Required for Indeterminate Cash Receipts)
In 2003, the legislature established the Mortgage Lending Fraud Prosecution Account (MLFPA) in order to fund criminal prosecution of fraudulent activities related to
mortgage lending. The Department of Financial Institutions (DFI) has administered the MLFPA since its creation in 2003. The original legislation had an expiration of June 30,
2006, which was amended in 2006, 2011, 2016, and 2021. The current date of expiration for the MLFPA is June 30, 2027. Funding for the MLFPA is generated by a $1
charge assessed when a deed of trust is recorded. This proposed legislation seeks to increase the $1 charge to $5 and removes the sunset clause.

FNS066 Ten-Year Analysis 1
Ten-Year Analysis
Bill Number Title Agency
5109 SB Mortgage lending fraud acc. 102 Department of Financial Institutions

Agency Preparation: Cale Zimmerman Phone: (360) 902-0507 Date: 1/15/2025 2:11:01 pm
Agency Approval: Emily Fitzgerald Phone: (360) 902-8780 Date: 1/15/2025 2:11:01 pm
OFM Review: Phone: Date:

FNS066 Ten-Year Analysis 2

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