The bill creates a new Washington statute called the "uniform mortgage modification act" by adding a chapter to Title 61 RCW and establishes a statutory framework governing mortgage modifications. It defines key terms (including mortgage, mortgage modification, obligation, obligor, financial covenant, electronic, record, sign, and recognized index) and specifies which types of changes are covered, such as decreases in interest rate, certain index or rate-type changes that do not increase the rate, capitalization of unpaid interest, forgiveness/forbearance/reduction of principal or interest, escrow and insurance requirement changes, modification of conditions to advance funds, modification of financial covenants, and payment amount or schedule changes that result from another covered modification. The act limits extensions of maturity in covered modifications to no later than six years after either the original mortgage maturity or the maturity in the most recent recorded modification that extended maturity. Substantively, the act provides the legal effect of covered mortgage modifications: the mortgage continues to secure the obligation as modified, the mortgage’s priority is not affected by the modification and is retained regardless of whether a record of the modification is recorded under chapter 65.08 RCW, and a modification is not a novation. The act directs courts to consider promoting uniformity among jurisdictions that adopt it, includes a transitional rule applying the chapter to modifications made on or after its effective date regardless of when the mortgage was created, and includes severability and codification provisions. It also specifies that it modifies, limits, or supersedes the federal E-SIGN Act (15 U.S.C. §7001 et seq.) except it does not modify 15 U.S.C. §7001(c) and does not authorize electronic delivery of the notices described in 15 U.S.C. §7003(b). The bill was introduced as Senate Bill 5831, filed by request of the Uniform Law Commission, prefiled 12/04/25, read for the first time 01/12/26, and referred to the Committee on Business, Trade & Economic Development. The text references chapter 65.08 RCW and chapter 1.80 RCW and applies to persons including obligors and mortgage holders while excluding, for example, agreements that secure liabilities owed by unit owners to condominium, owners’, or cooperative associations for dues, fees, or assessments. The exact RCW chapter number added within Title 61 and the act’s effective date are not provided in the extracted material, and no enforcement, penalty, remedy, or detailed recording mechanics beyond the stated priority rule are included in the provided text.

If enacted, this law would make it clear that a wide range of mortgage changes — including interest-rate reductions, certain index or rate-type adjustments that don’t raise the rate, capitalization of unpaid interest, principal forgiveness or forbearance, changes to escrow or insurance requirements, modifications of financial covenants, and payment-schedule changes tied to those modifications — will continue to be secured by the mortgage and keep their priority even if the modification is not recorded. Lenders and mortgage holders would have more ability to change loan terms without losing their lien priority, subject to a hard cap that any extension of the loan maturity cannot push the new maturity more than six years past the original maturity or six years past the most recent recorded extension. The most affected parties are lenders/servicers and borrowers: lenders may see lower recording costs and greater flexibility to offer workout terms while borrowers may gain clearer access to standard modification options, but both face greater potential for third-party notice disputes because priority is preserved regardless of recording. The act also addresses electronic records and signatures with specified federal limits, but the bill does not state its effective date and it leaves out enforcement, penalty, and detailed recording mechanics, so timing and some practical implementation issues remain unclear.