Chapter 86A — Mortgage Lending

86A.095 Short title

ORS 86A.095 to 86A.198 may be cited as the “Oregon Mortgage Lender Law.”

86A.100 Definitions

As used in ORS 86A.095 to 86A.198: “Fraud,” “deceit” and “defraud” are not limited to common-law deceit. “License” means a license issued to a mortgage banker or mortgage broker under ORS 86A.095 to 86A.198. “Mortgage banker” means a person that for compensation or in the expectation of compensation: Either directly or indirectly makes, negotiates or off…

86A.103 License required to engage in residential mortgage transactions as mortgage banker or mortgage broker

It is unlawful for any person to engage in residential mortgage transactions in this state as a mortgage banker or mortgage broker unless the person is licensed under ORS 86A.095 to 86A.198. A person who is a mortgage banker or mortgage broker under ORS 86A.100, but who does not engage in residential mortgage transactions in this state, is not required to ob…

86A.106 Procedures for licensing; experience required; certification; surety bond or letter of credit; fees; rules

The Director of the Department of Consumer and Business Services by rule shall establish procedures for licensing mortgage bankers or mortgage brokers. The director may coordinate licensing with the Nationwide Mortgage Licensing System and Registry. An applicant for a license, or a managing partner, director, executive officer or other individual that occup…

86A.109 Expiration of initial license; renewal; duration of renewed license; change in personnel; rules

An initial license expires one year after the date of issuance unless the Director of the Department of Consumer and Business Services establishes a different expiration date to coordinate with the Nationwide Mortgage Licensing System and Registry. The director by rule shall establish procedures to renew a license. The rule shall specify the duration of a r…

86A.112 Licensees to keep records; inspection; filing financial reports; rules

A mortgage banker or mortgage broker shall make and keep accounts, correspondence, memoranda, papers, books and other records that the Director of the Department of Consumer and Business Services by rule or order prescribes. The mortgage banker or mortgage broker shall preserve the records for five years unless the director by rule prescribes otherwise. The …

86A.115 Grounds for denying, suspending, conditioning or revoking license

Except as provided in ORS 86A.118, the Director of the Department of Consumer and Business Services may by order deny, suspend, condition or revoke a license if the director finds that the applicant or licensee: Is insolvent, either in the sense that the liabilities of the applicant or licensee exceed the assets of the applicant or licensee or that the appl…

86A.118 Action against applicant or licensee for act or omission of associate; exception

The Director of the Department of Consumer and Business Services may enter an order against the applicant or licensee under ORS 86A.115 if any partner, officer or director of a mortgage banker or mortgage broker, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the mortgage banker or mort…

86A.121 Cancellation of license or application; application to surrender license

The Director of the Department of Consumer and Business Services may cancel an application or license if the director finds that the applicant or licensee: Has ceased to do business as a mortgage banker or mortgage broker; Has failed to maintain a corporate surety bond or irrevocable letter of credit required under ORS 86A.106 or 86A.227; or Cannot be loc…

86A.124 Supervisory authority of director over mortgage bankers, mortgage brokers and mortgage loan originators; documents exempt from disclosure

The Director of the Department of Consumer and Business Services has general supervision and control over mortgage loan originators, mortgage bankers and mortgage brokers that reside or do business in this state and that engage in an activity that is subject to the provisions of ORS 86A.095 to 86A.198. The director may examine at any time mortgage bankers an…

86A.127 Investigations; publicity with respect to violations; cease and desist order

The Director of the Department of Consumer and Business Services: May make such public or private investigations within or outside this state as the director deems necessary to determine whether a person has violated any provision of ORS 86A.095 to 86A.198 or any rule or order of the director, or to aid in the enforcement of ORS 86A.095 to 86A.198 or in the…

86A.130 Enjoining violations; fine; appointment of receiver; attorney fees; damages to private parties

Whenever the Director of the Department of Consumer and Business Services has reasonable cause to believe that a person has been engaged or is engaging in any violation of any provision of ORS 86A.095 to 86A.198 or any rule or order of the director, the director may bring suit in the name and on behalf of the State of Oregon in the circuit court of any count…

86A.133 Procedures where assets or capital of mortgage banker or mortgage broker found impaired; involuntary liquidation

When the Director of the Department of Consumer and Business Services ascertains that the assets or capital of any mortgage banker or mortgage broker is impaired, or that the mortgage banker’s or mortgage broker’s affairs are in an unsound condition, the director may take possession of all the property, business and assets of the mortgage banker or mortgage …

86A.136 Rules; financial statements

In accordance with this section and ORS chapter 183, the Director of the Department of Consumer and Business Services may from time to time make, amend and rescind such rules as are necessary to carry out the provisions of ORS 86A.095 to 86A.198, including but not limited to rules governing the activities of mortgage loan originators, mortgage bankers and mo…

86A.139 Notice of orders; hearings on orders

Except as provided in ORS 183.745, upon the entry of an order under ORS 86A.095 to 86A.198, the Director of the Department of Consumer and Business Services shall promptly give appropriate notice of the order as provided in this subsection. The notice shall state that a hearing will be held on the order if a written demand for hearing is filed with the direc…

86A.142 Judicial review of orders

A person aggrieved by an order of the Director of the Department of Consumer and Business Services which has been the subject of a timely application for hearing before the director shall be entitled to judicial review of the order under ORS chapter 183. A judgment of a reviewing court under ORS chapter 183 may not bar the director from thereafter vacating …

86A.145 Oaths and subpoenas in proceedings before director

For the purpose of an investigation or proceeding under ORS 86A.095 to 86A.198, the Director of the Department of Consumer and Business Services may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence and require the production of books, papers, correspondence, memoranda, agreements or other documents or records that…

86A.148 Copies of documents; fees; rules; effect of certification

The Director of the Department of Consumer and Business Services shall furnish to any person, upon payment of a fee established by rule, copies of any document which is a matter of public record. Certified copies shall be furnished upon request. In a proceeding or prosecution under ORS 86A.095 to 86A.198, a copy so certified shall be prima facie evidence of …

86A.151 Liability of person that employs mortgage loan originator; recovery of damages; limitations on proceeding; action against bond or letter of credit; attorney fees

A person that employs a mortgage loan originator or under the provisions of ORS 86A.200 to 86A.239 should employ a mortgage loan originator is liable as provided in subsection (2) of this section for an ascertainable loss of money or property, real or personal, in a residential mortgage transaction if the person engages in a residential mortgage transaction …

86A.154 Fraud and deceit with respect to mortgage banker or mortgage broker business

It is unlawful for any person, directly or indirectly, in connection with the conduct of a mortgage banker or mortgage broker business: To employ any device, scheme or artifice to defraud; Knowingly to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circums…

86A.157 Clients’ Trust Account; examination; deposit of funds; interest; rules

Each mortgage banker or mortgage broker shall maintain in this state one or more separate bank accounts that shall be designated a Clients’ Trust Account in which all trust funds received or handled by the mortgage banker or mortgage broker shall be deposited unless, pursuant to written agreement of all parties having an interest in the trust funds, the trus…

86A.160 Notice to bank regarding Clients’ Trust Account

Each mortgage banker or mortgage broker, at the time a Clients’ Trust Account is opened under ORS 86A.157, shall provide the bank in which the account is opened with a notice in substantially the following form: ______________________________________________________________________________ NOTICE OF CLIENTS’ TRUST ACCOUNT To: (name of bank) ________ I, _…

86A.163 Prohibited advertisements

A mortgage banker or mortgage broker shall not use or cause to be published any advertisement that: Contains any false, misleading or deceptive statement or representation; or Identifies the mortgage banker or mortgage broker by any name other than the name listed on the license issued by the Director of the Department of Consumer and Business Services or …

86A.166 Designation of principal place of business; other offices; change of personnel; registered agent

Every licensed mortgage banker and mortgage broker shall designate and maintain a principal place of business for the transaction of business. If a licensed mortgage banker or mortgage broker intends to transact business at any place other than the principal place of business, the licensee shall notify the Director of the Department of Consumer and Business…

86A.169 Disclosure required before closing mortgage loan or mortgage banking loan

Prior to the closing of any mortgage loan or any mortgage banking loan, the mortgage banker or mortgage broker shall supply the borrower with a disclosure as required by the real estate lending provisions of 15 U.S.C. 1601 et seq. and Regulation Z, 12 C.F.R. Part 226.

86A.172 Advisory committee

Before adopting rules under ORS 86A.095 to 86A.198, the Director of the Department of Consumer and Business Services may appoint and shall consider the suggestions of an advisory committee that represents the interests of persons that the rules will likely affect. The director may also use other means to obtain public views to assist the director in adopting…

86A.175 Servicing or collecting mortgage banking loan or mortgage loan by mortgage banker or mortgage broker

With the permission of the lender, note owner, note holder or other holder of an interest in a note, a mortgage banker or mortgage broker may service or collect a mortgage banking loan or mortgage loan in the name of the mortgage banker or mortgage broker or in the name of the lender, note owner, note holder or other holder of an interest in the note. Excep…

86A.178 Legislative findings regarding mortgage loan originators; prohibited practice

The Legislative Assembly finds and declares that: The public interest is served by identifying a mortgage loan originator with a specific mortgage banker or mortgage broker; and The public must be protected from the conflicts of interest created when a mortgage loan originator is employed by more than one mortgage lender. A mortgage loan originator may no…

86A.179 [Formerly 59.969; repealed by 2009 c.863 §36]

86A.180 [Formerly 59.970; repealed by 2009 c.863 §36]

86A.183 Prohibited conduct for mortgage bankers, mortgage brokers and mortgage loan originators; conditions affecting employment of mortgage loan originators

A mortgage banker, mortgage broker or mortgage loan originator may not: Engage in dishonest, fraudulent or illegal practices or conduct in a business or profession or engage in unfair or unethical practices or conduct in connection with the mortgage business. Willfully or repeatedly violate or fail to comply with a provision of ORS 86A.095 to 86A.198 or 86…

86A.186 Mortgage loan originator criminal records checks; rules

A person that employs or intends to employ an individual as a mortgage loan originator shall conduct a state criminal records check of the individual. A person that employs or intends to employ an individual as a mortgage loan originator shall report to the Director of the Department of Consumer and Business Services the results of each state criminal recor…

86A.187 [Formerly 59.973; repealed by 2009 c.863 §36]

86A.188 [Formerly 59.975; repealed by 2009 c.863 §36]

86A.189 [Formerly 59.977; repealed by 2009 c.863 §36]

(Regulation of Lending Activity)

86A.195 Restrictions on negative amortization loans; verification of borrower income; prepayment penalties

As used in this section, “negative amortization loan” means a mortgage loan or mortgage banking loan that is structured in such a way that a borrower in any period may make a scheduled loan payment that is insufficient to pay accruing interest. “Negative amortization loan” does not include: A loan commonly known as a bridge loan, the terms of which specify…

86A.196 Notice of reverse mortgage prohibition in homestead property tax deferral program; summary of terms of reverse mortgage in advertisement or solicitation; annual notice to person with reverse mortgage or to escrow agent, title insurance company or other agent; exception

Before entering into an agreement with a borrower for a reverse mortgage, a lender shall notify the borrower in writing of the provisions of ORS 311.700 (2). In any advertisement, solicitation or communication that a lender or an agent or affiliate of the lender intends as an inducement for a person to apply for or enter into a contract for a reverse mortga…

86A.198 Materials in languages other than English; requirements

A mortgage banker, a mortgage broker or a mortgage loan originator shall provide in writing the materials identified in subsection (2) of this section to a borrower if the mortgage banker, mortgage broker or mortgage loan originator: Communicates or causes to be communicated an advertisement in a language other than English or otherwise solicits business in…

86A.200 Definitions

As used in ORS 86A.200 to 86A.239: “Depository institution” means a depository institution, as defined in 12 U.S.C. 1813(c), and a credit union, as defined in ORS 723.008. “Federal banking agency” means: The Board of Governors of the Federal Reserve System; The Comptroller of the Currency; The Director of the Office of Thrift Supervision in the United S…

86A.203 License and unique identifier for mortgage loan originator; requirements; exemptions; rules

Except as provided in subsection (2) of this section, an individual may not engage in business as a mortgage loan originator in this state without first: Obtaining and maintaining a mortgage loan originator’s license under ORS 86A.212 or renewing a mortgage loan originator’s license under ORS 86A.218; and Obtaining a unique identifier from the Nationwide M…

86A.206 Application for license; information and materials required for application; rules

The Director of the Department of Consumer and Business Services by rule shall determine the manner in which an applicant must apply and the form and contents of an application for a license to conduct business as a mortgage loan originator. In connection with an application under this section, an applicant shall apply for and receive a unique identifier fr…

86A.209 Interim license; findings required

The Director of the Department of Consumer and Business Services may issue an interim mortgage loan originator’s license to a person that is not licensed under ORS 86A.212 if the director finds that issuing the interim license will facilitate the business of licensed mortgage loan originators or prevent an undue delay in issuing a mortgage loan originator’s …

86A.212 Findings required for issuing license; basis for denial; rules

The Director of the Department of Consumer and Business Services may not issue a mortgage loan originator’s license to an applicant unless the director finds, at a minimum, that the applicant: Has obtained a unique identifier from the Nationwide Mortgage Licensing System and Registry. Has not had a mortgage loan originator’s license revoked in another juri…

86A.215 Education and testing requirements for license; education and test providers

An applicant for a mortgage loan originator’s license shall: Complete, at a minimum, 20 hours of an approved course of prelicensing education that, at a minimum, must include: Three hours devoted to federal laws and regulations; Three hours devoted to ethics, with instruction concerning fraud, consumer protection and fair lending; and Two hours devoted t…

86A.218 License renewal; expiration; reinstatement; rules

The Director of the Department of Consumer and Business Services shall renew a mortgage loan originator’s license if the director finds that: The licensed mortgage loan originator continues to meet the requirements set forth under ORS 86A.212; The licensed mortgage loan originator paid the fee required to renew the mortgage loan originator’s license; and …

86A.221 Continuing education requirements for mortgage loan originator; credit allowed

A licensed mortgage loan originator each year shall complete at least eight hours of an approved course of continuing education that: At a minimum, must include: Three hours devoted to federal laws and regulations; Two hours devoted to ethics, with instruction concerning fraud, consumer protection and fair lending; and Two hours devoted to lending standa…

86A.224 Denying, suspending, conditioning, revoking or declining to renew license; findings required; order; civil penalty; prohibited activity; criminal liability

In addition to authority the Director of the Department of Consumer and Business Services has under ORS 86A.095 to 86A.198, the director under this section has the authority, subject to ORS chapter 183, to deny, suspend, place conditions upon, revoke or decline to renew a mortgage loan originator’s license or permanently prohibit a person from conducting bus…

86A.227 Corporate surety bond required; right of action; rules

A person that employs a mortgage loan originator shall file with the Director of the Department of Consumer and Business Services a corporate surety bond that runs to the State of Oregon and that covers each mortgage loan originator the person employs. The corporate surety bond must be issued by a corporate surety or an insured institution, as defined in ORS…

86A.230 Contracts or agreements with Nationwide Mortgage Licensing System and Registry and other agencies; information sharing; confidentiality; reports of violations; rules

The Director of the Department of Consumer and Business Services may contract with or otherwise agree with the Nationwide Mortgage Licensing System and Registry, or a person the Nationwide Mortgage Licensing System and Registry designates, to: Collect and maintain records in connection with an application under ORS 86A.212 or 86A.218; Collect and process a…

86A.233 Production of records; investigations, examinations and subpoenas; possession of records; access to records; powers of director; prohibited activities

The Director of the Department of Consumer and Business Services, as often as the director deems necessary to carry out the purposes of ORS 86A.200 to 86A.239, may: Request or require a person that employs a mortgage loan originator or that under the provisions of ORS 86A.200 to 86A.239 should employ a mortgage loan originator to produce, for the director’s…

86A.236 Prohibited activities

A person who is subject to regulation under ORS 86A.200 to 86A.239 in connection with the person’s activities as a mortgage loan originator may not: Perform an act as a mortgage loan originator in a negligent or incompetent manner; Employ a device, scheme or artifice to defraud or engage in an act, practice or course of business that operates or would oper…

86A.239 Display of license and unique identifier; rules; report of condition

A licensed mortgage loan originator shall clearly display the licensed mortgage loan originator’s unique identifier on a residential mortgage loan application form, solicitation, advertisement, promotional material or website the licensed mortgage loan originator uses in connection with the licensed mortgage loan originator’s business. The Director of the D…

86A.242 Rules

The Director of the Department of Consumer and Business Services may adopt, amend and repeal rules that are necessary to carry out the provisions of ORS 86A.200 to 86A.239. MORTGAGE LOAN SERVICERS

86A.300 Short title

ORS 86A.303 to 86A.339 may be cited as the Mortgage Loan Servicer Practices Act.

86A.303 Definitions

As used in ORS 86A.303 to 86A.339: “Affiliate” means a person who controls, is controlled by or is under common control with another person. “Applicant” means a person that applies for a license to engage in business as a residential mortgage loan servicer in this state. “Borrower” means a person that incurs an obligation to repay a residential mortgage l…

86A.306 License requirement; applicability; exceptions; enforcement; rules

A person may not directly or indirectly service a residential mortgage loan in this state unless the person obtains or renews a license under ORS 86A.309. Subsection (1) of this section does not apply to: A person, or an affiliate of the person, that in all operations within the United States during the calendar year services fewer than 5,000 residential m…

86A.309 Application for license; requirements; waiver; fee; conditions for issuance and renewal and for denial, revocation or refusal; license term; rules

A person that is subject to the requirement to obtain or renew a license under ORS 86A.306 (1) or (3) shall submit an application to the Director of the Department of Consumer and Business Services in the manner, on a form and with the contents the director specifies by rule. The director by rule may require an applicant to submit the application described …

86A.312 Licensee’s principal place of business; registered agent; assumed business name

A licensee shall designate and maintain a principal place of business at or from which the licensee services residential mortgage loans in this state and shall designate a registered agent in this state. If a licensee does not maintain a principal place of business in this state the licensee shall nevertheless designate a registered agent in this state. The…

86A.315 Required liquidity, operating reserves and tangible net worth; compliance with federal standards as compliance with requirements; director’s powers to enforce compliance

A licensee shall maintain in accordance with generally accepted accounting principles sufficient liquidity, operating reserves and tangible net worth to permit the licensee to adequately meet all costs, expenses and other financial requirements related to servicing residential mortgage loans in this state. The Director of the Department of Consumer and Busin…

86A.318 Required notices to director; rules

A licensee shall notify the Director of the Department of Consumer and Business Services in writing at least 30 days before the licensee: Relocates or closes the licensee’s principal place of business or a branch office in this state; or Opens a branch office that the licensee did not list in an application under ORS 86A.309. In a notice under paragraph (…

86A.321 Director’s supervisory authority; examinations; confidentiality

The Director of the Department of Consumer and Business Services has general supervisory authority over: Each licensee in this state; Any person that services a residential mortgage loan in this state, if the person is subject to ORS 86A.303 to 86A.339 or if the director required the person to obtain a license under ORS 86A.306 (3); and Any person that ha…

86A.324 Duties of mortgage loan servicer; prohibited conduct; rules

A person that services a residential mortgage loan shall: Assess any fee that the person may assess against a borrower within 45 days after the borrower incurs the fee. Explain to a borrower in clear language and conspicuous text the reason for any fee the person assesses against the borrower in a written statement that the person mails to the borrower at …

86A.327 Complaints; director’s power to investigate; confidentiality; exceptions

If the Director of the Department of Consumer and Business Services receives a complaint concerning a person that services a residential mortgage loan, the director: Shall notify the person of the complaint, provide a copy of the complaint in the notice and require the person to respond to the complaint and to the director within 30 days after the date of t…

86A.330 Violations; civil penalties; costs of investigation

If after conducting an investigation, the Director of the Department of Consumer and Business Services determines that a person that services a residential mortgage loan has violated ORS 86A.303 to 86A.339, a rule the director adopted or an order the director issued under ORS 86A.303 to 86A.339 or another applicable law, the director may order the person to:…

86A.333 Additional duties of licensee; required response to borrower’s request for information; account history

A licensee shall: Maintain, until a borrower repays or otherwise satisfies the borrower’s residential mortgage loan or until the licensee sells the residential mortgage loan, written or electronic records of each written request the borrower submits for information concerning a dispute or error in relation to the borrower’s account. Respond in writing not …

86A.336 Suspension or removal of licensee’s director or officer

If the Director of the Department of Consumer and Business Services determines that a director or officer of a licensee has violated ORS 86A.303 to 86A.339, a rule the Director of the Department of Consumer and Business Services adopted or an order the director issued under ORS 86A.303 to 86A.339, directives or instructions the director included in an order …

86A.339 Additional duties of mortgage loan servicer; prohibited practices

A person that performs a residential mortgage loan modification service for compensation or gain shall: Comply with all applicable state and federal laws; Provide the borrower with a summary of the material terms of any agreement under which the licensee provides services related to a modification of the borrower’s residential mortgage loan; and Inform th…

86A.990 Criminal penalties for violations of ORS 86A.095 to 86A.198

A person that knowingly violates a provision of ORS 86A.095 to 86A.198 or a rule adopted by the Director of the Department of Consumer and Business Services under ORS 86A.095 to 86A.198, except ORS 86A.145 (2), commits a Class C felony. Violation of ORS 86A.145 (2) is a Class A misdemeanor.

86A.992 Civil penalties for violations of ORS 86A.095 to 86A.198

In addition to all other penalties and enforcement provisions provided by law, any person who violates or who procures, aids or abets in the violation of any provision of ORS 86A.095 to 86A.198 or any rule or order of the Director of the Department of Consumer and Business Services shall be subject to a penalty of not more than $5,000 for every violation, wh…