Committee Hears Staff Briefing on SB 5831 to Codify Uniform Mortgage Modification Act

The Senate Consumer Protection and Business Committee heard a staff briefing Feb. 18 on Senate Bill 5831, which would enact the Uniform Mortgage Modification Act in Washington.

Peter Klotfelter, committee staff, told the panel that the measure would make clear that for a set of mortgage changes identified in the bill — such as limited extensions of maturity, reductions in interest rate, forgiveness of principal or interest, and certain escrow or insurance-account adjustments — “the mortgage retains its priority regardless of whether a record of the mortgage modification is recorded,” and is not a novation that substitutes the original contract.

The bill adopts a safe-harbor approach similar to the model law promulgated by the Uniform Law Commission in 2024. Under the proposal, modifications that fall within the listed categories would continue to secure the obligation and would not lose priority to junior interests. Klotfelter said modifications not identified in the bill would be governed by other law. He also noted explicit exceptions, including releases or additions to encumbered property, changes in obligors, assignments and transfers of mortgages.

Senator Perry Dozier, the bill’s prime sponsor, told the committee the measure is intended to reduce uncertainty and the need for homeowners to seek legal advice about whether a modification must be re-recorded. “It just kind of gives some clarification and a little bit more certainty,” Dozier said.

No members of the public signed in to testify on SB 5831; the committee closed the public hearing and moved on to other agenda items.