ORS Chapter 86
Chapter 86A — MortgageLending
2009 EDITION
MORTGAGELENDING
MORTGAGESAND LIENS
MORTGAGEBANKERS; MORTGAGE BROKERS; LOAN ORIGINATORS
(Generally)
86A.095 Shorttitle
86A.100 Definitions
86A.103 Licenserequired to engage in residential mortgage transactions as mortgage banker ormortgage broker
86A.106 Proceduresfor licensing; experience required; certification; surety bond or letter ofcredit; fees; rules
86A.109 Expirationof license; renewal; duration of renewed license; change in personnel; rules
86A.112 Licenseesto keep records; inspection; filing financial reports
86A.115 Groundsfor denying, suspending, conditioning or revoking license
86A.118 Actionagainst applicant or licensee for act or omission of associate; exception
86A.121 Cancellationof license or application; application for withdrawal
86A.124 Supervisoryauthority of director over mortgage bankers, mortgage brokers and loanoriginators
86A.127 Investigations;publicity with respect to violations; cease and desist order
86A.130 Enjoiningviolations; fine; appointment of receiver; attorney fees; damages to privateparties
86A.133 Procedureswhere assets or capital of mortgage banker or mortgage broker found impaired;involuntary liquidation
86A.136 Rules;financial statements
86A.139 Noticeof orders; hearings on orders
86A.142 Judicialreview of orders
86A.145 Oathsand subpoenas in proceedings before director
86A.148 Copiesof documents; fees; rules; effect of certification
86A.151 Liabilityof mortgage banker or mortgage broker; recovery of damages; limitations onproceeding; action against bond or letter of credit; attorney fees
86A.154 Fraudand deceit with respect to mortgage banker or mortgage broker business
86A.157 Clients’Trust Account; examination; deposit of funds; interest; rules
86A.160 Noticeto bank regarding Clients’ Trust Account
86A.163 Prohibitedadvertisements
86A.166 Designationof principal place of business; other offices; change of personnel; registeredagent
86A.169 Disclosurerequired before closing mortgage loan or mortgage banking loan
86A.172 Consultationwith licensees before rules adopted
86A.175 Servicingor collecting mortgage banking loan or mortgage loan by mortgage banker ormortgage broker
86A.178 Legislativefindings regarding loan originators; prohibited practice
86A.179 Listof loan originators; qualifications; voluntary reporting; records; waiver;rules
86A.180 Qualificationsfor insurance licensees acting as loan originators
86A.183 Prohibitedconduct for loan originators; effect of criminal conviction; rules
86A.186 Loanoriginator criminal records checks; rules
86A.187 Complaintsagainst loan originators; investigation; hearing; rules; action by director
86A.188 Continuingeducation requirements for loan originators; rules
86A.189 Certificationof organizations to provide training for loan originators; rules
(Regulationof Lending Activity)
86A.195 Restrictionson negative amortization loans; verification of borrower income; prepaymentpenalties
86A.198 Materialsin languages other than English; requirements
MORTGAGELOAN ORIGINATORS
86A.200 Definitions
86A.203 Licenseand unique identifier for mortgage loan originator; requirements; exemptions;rules
86A.206 Applicationfor license; information and materials required for application; rules
86A.209 Interimlicense; findings required
86A.212 Findingsrequired for issuing license; basis for denial; rules
86A.215 Educationand testing requirements for license; education and test providers
86A.218 Licenserenewal; expiration; reinstatement; rules
86A.221 Continuingeducation requirements for mortgage loan originator; credit allowed
86A.224 Denying,suspending, conditioning, revoking or declining to renew license; findingsrequired; order; civil penalty; prohibited activity; criminal liability
86A.227 Corporatesurety bond required; right of action; rules
86A.230 Contractsor agreements with Nationwide Mortgage Licensing System and Registry and otheragencies; information sharing; confidentiality; reports of violations; rules
86A.233 Productionof records; investigations, examinations and subpoenas; possession of records;access to records; powers of director; prohibited activities
86A.236 Prohibitedactivities
86A.239 Displayof license and unique identifier; rules; report of condition
86A.242 Rules
PENALTIES
86A.990 Criminalpenalties for violations of ORS 86A.095 to 86A.198
86A.992 Civilpenalties for violations of ORS 86A.095 to 86A.198
MORTGAGEBANKERS; MORTGAGE BROKERS; LOAN ORIGINATORS
(Generally)
86A.095Short title.ORS 86A.095 to 86A.198 may be cited as the “Oregon Mortgage Lender Law.” [Formerly59.980]
86A.100Definitions.As used in ORS 86A.095 to 86A.198:
(1)“Director” means the Director of the Department of Consumer and Business Services.
(2)“Fraud,” “deceit” and “defraud” are not limited to common-law deceit.
(3)“License” means a license issued to a mortgage banker or mortgage broker underORS 86A.095 to 86A.198.
(4)(a)“Loan originator” means an individual employed by or purporting to act as anagent or independent contractor for a mortgage banker or mortgage broker thatis required to be licensed under ORS 86A.095 to 86A.198, with the expectationby the individual of compensation or gain that is determined by the amount borrowedor the terms and conditions agreed to by the mortgage loan borrower, and havingprimary job responsibilities that include negotiating with a borrower orpotential borrower for the purpose of establishing the terms and conditions ofa mortgage loan.
(b)“Loan originator” includes a person employed at a location outside this statewhose primary job responsibilities include contacting or attempting to contacta borrower or potential borrower within this state through any medium or modeof communication for purposes of providing a mortgage loan within this state.
(c)“Loan originator” does not include an individual whose responsibilities areclerical or administrative functions, including but not limited to gatheringinformation, requesting information, word processing, soliciting generalinterest in mortgage loans, sending correspondence and assembling files.
(d)“Loan originator” does not include an employee of a mortgage banker that israted as good or better under the federal rating system in effect on May 1,2001, for seller-servicers of Federal Housing Administration, Federal Home LoanMortgage Corporation or Federal National Mortgage Association loans and thathas an office within this state at which the mortgage banker maintains completeand current copies of all employment records and other records as required bythe Director of the Department of Consumer and Business Services by order orrule, in a format acceptable to the director.
(e)“Loan originator” does not include an insurance producer licensed under ORS744.052 to 744.089 or insurance consultant licensed under ORS 744.002.
(f)“Loan originator” does not include a person or group of persons exempted byrule or order of the director.
(5)“Mortgage banker”:
(a)Means any person who for compensation or in the expectation of compensation:
(A)Either directly or indirectly makes, negotiates or offers to make or negotiatea mortgage banking loan or a mortgage loan; and
(B)Services or sells a mortgage banking loan.
(b)Does not include:
(A)A financial institution, as defined in ORS 706.008.
(B)A financial holding company or a bank holding company, as defined in ORS706.008, holding an institution described in subparagraph (A) of thisparagraph; a savings and loan holding company as defined in section 408 of theNational Housing Act, 12 U.S.C. 1730a (1982), holding an association describedin subparagraph (A) of this paragraph; the subsidiaries and affiliates of thefinancial holding company, bank holding company or savings and loan holdingcompany; or subsidiaries and affiliates of institutions described insubparagraph (A) of this paragraph, provided that the appropriate statutoryregulatory authority is exercising control over or is regulating or supervisingthe persons listed in this subparagraph in their mortgage banking activities inaccordance with the purposes of ORS 86A.095 to 86A.198.
(C)A person who makes a loan secured by an interest in real estate with the person’sown moneys, for the person’s own investment and who is not engaged in thebusiness of making loans secured by an interest in real estate.
(D)An attorney licensed in this state who negotiates mortgage banking loans ormortgage loans in the ordinary course of business, unless the business ofnegotiating mortgage banking loans or mortgage loans constitutes substantiallyall of the attorney’s professional activity.
(E)A person who, as seller of real property, receives one or more mortgages ordeeds of trust as security for a separate money obligation.
(F)An agency of any state or of the United States.
(G)A person who receives a mortgage or deed of trust on real property as securityfor an obligation payable on an installment or deferred payment basis andarising out of materials furnished or services rendered in the improvement ofthat real property or any lien created without the consent of the owner of thereal property.
(H)A person who funds a mortgage banking loan or mortgage loan which has beenoriginated and processed by a licensee or by an exempt person and who does notmaintain a place of business in this state in connection with funding mortgagebanking loans or mortgage loans, does not directly or indirectly solicitborrowers in this state for the purpose of making mortgage banking loans ormortgage loans and does not participate in the negotiation of mortgage bankingloans or mortgage loans. For the purpose of this subparagraph, “negotiation ofmortgage banking loans or mortgage loans” does not include setting the termsunder which a person may buy or fund a mortgage banking loan or a mortgage loanoriginated by a licensee or exempt person.
(I)A nonprofit federally tax exempt corporation certified by the United StatesSmall Business Administration and organized to promote economic developmentwithin this state whose primary activity consists of providing financing forbusiness expansion.
(J)A licensee licensed under ORS chapter 725 or a mortgage broker.
(K)A retirement or pension fund.
(L)An insurer as defined in ORS 731.106.
(M)A court appointed fiduciary.
(N)Any other person designated by rule or order of the director.
(6)“Mortgage banking loan” means a loan, extension of credit or a retail salescontract that is funded exclusively from the mortgage banker’s own resources,which is directly or indirectly secured by a mortgage or deed of trust or anylien interest on real estate and which is created with the consent of the ownerof the real property. For purposes of this subsection, “own resources” meansany of the following:
(a)Cash, corporate capital, warehouse credit lines at financial institutionsdefined in ORS 706.008 or other sources that are liability items of themortgage banker’s financial statements for which its assets are pledged;
(b)Correspondent contracts between the mortgage banker and a bank, savings bank,trust company, savings and loan association, credit union, profit sharing orpension trust, a licensee under ORS chapter 725 or an insurance company; or
(c)The mortgage banker’s affiliates’ cash, corporate capital, warehouse creditlines at financial institutions defined in ORS 706.008 or other sources thatare liability items on the affiliates’ financial statements for which theaffiliates’ assets are pledged. As used in this paragraph, “affiliates” meansentities that, directly or indirectly, through one or more intermediariescontrols, are controlled by or are under common control with the entityspecified.
(7)“Mortgage broker”:
(a)Means a person who:
(A)Engages all or part of the time, for the account of others or for the person’sown account, in the business of selling real estate paper whether as issuer,agent or principal to persons other than persons enumerated in ORS 59.035 (4);
(B)Engages all or part of the time, for the account of others or for the person’sown account, in the business of accepting funds from one or more persons otherthan persons enumerated in ORS 59.035 (4) for investment in real estate paper;or
(C)For compensation, or in the expectation of compensation, either directly orindirectly makes, negotiates or offers to make or negotiate a mortgage loan.
(b)Does not include:
(A)A financial institution, as defined in ORS 706.008.
(B)A financial holding company or a bank holding company, as defined in ORS706.008, holding an institution described in subparagraph (A) of thisparagraph; a savings and loan holding company as defined in section 408 of theNational Housing Act, 12 U.S.C. 1730a (1982), holding an association describedin subparagraph (A) of this paragraph; the subsidiaries and affiliates of thefinancial holding company, bank holding company or savings and loan holdingcompany; or subsidiaries and affiliates of institutions described insubparagraph (A) of this paragraph, provided that the appropriate statutoryregulatory authority is exercising control over or is regulating or supervisingthe persons listed in this subparagraph in their mortgage brokering activitiesin accordance with the purposes of ORS 86A.095 to 86A.198.
(C)A person who purchases real property and issues an obligation to finance thetransaction to the seller incidentally to the sale.
(D)A real estate licensee as defined in ORS 696.010 who performs services solelyincidental to the practice of professional real estate activity as defined inORS 696.010, unless the real estate licensee performs the functions of amortgage banker or a mortgage broker as defined in this section.
(E)A person licensed under the provisions of ORS chapter 725 or a mortgage banker.
(F)A person who makes a loan secured by an interest in real estate with the person’sown moneys, for the person’s own investment and who is not engaged in thebusiness of making loans secured by an interest in real estate.
(G)An attorney licensed in this state who negotiates mortgage loans in the ordinarycourse of business, unless the business of negotiating mortgage loansconstitutes substantially all of the attorney’s professional activity.
(H)A person who, as seller of real property, receives one or more mortgages ordeeds of trust as security for a separate money obligation.
(I)An agency of any state or of the United States.
(J)A person who receives a mortgage or deed of trust on real property as securityfor an obligation payable on an installment or deferred payment basis andarising out of materials furnished or services rendered in the improvement ofthat real property or any lien created without the consent of the owner of thereal property.
(K)A person who funds a mortgage loan which has been originated and processed by alicensee or by an exempt person and who does not maintain a place of businessin this state in connection with funding mortgage loans, does not directly orindirectly solicit borrowers in this state for the purpose of making mortgageloans and does not participate in the negotiation of mortgage loans. For thepurpose of this subparagraph, “negotiation of mortgage loans” does not includesetting the terms under which a person may buy or fund a mortgage loanoriginated by a licensee or exempt person.
(L)A nonprofit federally tax exempt corporation certified by the United StatesSmall Business Administration and organized to prom