06 Aug Oregon Legislative and North Dakota Regulatory Update
The Oregon legislature recently amended its laws governing the foreclosure of residential trust deeds, effective July 19, 2013. The North Dakota Department of Financial Institutions (the “Department”) recently amended its rules governing money brokers, effective April 1, 2013.
OREGON HOUSE BILL 3389
“Nonprofit entity” means a nonprofit corporation that is organized in Oregon and that is tax-exempt as a charitable organization, or a subsidiary or agent of the nonprofit corporation.
“Residential trust deed” means a trust deed on property upon which are situated 4 or fewer residential units, one of which the borrower, the borrower’s spouse, or the borrower’s minor or dependent child occupies as a principal residence at the time the trust deed is recorded or, in the case of a purchase money loan, one of which is intended to be the principal residence of the borrower, the borrower’s spouse, or the borrower’s minor or dependent child after the trust deed is recorded (previously at the time a default that results in an action to foreclose the obligation secured by the trust deed first occurs).
A lender may not, as a condition of offering or approving a short sale as an alternative to foreclosing a residential trust deed, require a nonprofit entity that purchases property that is subject to the residential trust deed from a borrower in a short sale, or that purchases a note from the lender that secures the borrower’s obligation to the lender by means of the residential trust deed, to enter into an agreement with the lender or the borrower that limits or bars the borrower, after the short sale or the sale of the note, from owning or occupying the property that is subject to the residential trust deed.
The provision above does not apply if:
- The lender does not receive notice before the short sale that the nonprofit entity or the borrower intends for the borrower to continue after the short sale to own or occupy the property that is the subject of the short sale;
- The borrower does not allow the lender reasonable access to the property that is the subject of the short sale for the purpose of inspecting or appraising the property;
- Offering or approving the short sale would require the lender to breach a contractual obligation to another person with respect to a residential trust deed that was recorded before July 19, 2013; or
- Offering or approving the short sale would require the lender to breach a legal obligation that is not based on a contract.
NORTH DAKOTA ADMINISTRATIVE CODE 13-05-01-04 and 13-05-01-06
Money brokers must provide all loan disclosures mandated by the Real Estate Settlement Procedures Act’s Regulation X and the Truth-in-Lending Act’s Regulation Z.
With regard to when a money broker arranges a loan for a borrower, the following loan disclosure statements no longer must be prepared by the money broker for the borrower:
- A summary of loan terms including the principal amount of the loan, estimated deductions from the principal amount, including costs and expenses, brokerage commission, liens and other amounts to be paid on authorization of the borrower, and any other deductions, and estimated cash payable to the borrower;
- Estimated costs and expenses to be paid by the borrower out of the principal amount of the loan, including appraisal fees, escrow fees, abstract or title insurance fees, notary fees, attorney’s fees, recording fees, credit investigation fees, and other costs and expenses; and
- An estimate of the liens and other amounts to be paid out of the principal amount of the loan, on authorization of the borrower, including re or other property insurance premiums, credit life or disability insurance premiums, beneficiary statement fees, reconveyance or similar fees, or liens against property securing the loan or other fees.
The following provisions have been deleted from the rules governing money brokers:
All figures which are estimates must be clearly identified as such and a statement must be included specifying whether the borrower may refuse to accept the commitment if the estimates are exceeded by a specified percent, and, if so, the contract must set forth the specified percent.
Every money broker licensee operating as a money broker must le an annual report with the Department. This must be done at the time of submitting the application for renewal of license on the forms supplied with the renewal application. If the Department finds that further inquiry is necessary, the money broker must give specific details on any transaction to the Department.