Oregon Legislative Update

Oregon Legislative Update

The Oregon legislature recently amended the law regarding the reliance on payoff statements, effective June 16, 2015.

 

OREGON HOUSE BILL 3244

 

“Borrower” and “Lender” now include an assignee or successor in interest.

 

“Payoff statement” means a written statement that sets forth, as of the date the lender prepares the statement, amounts a borrower must pay in order to fully satisfy the borrower’s obligation under a real estate loan agreement.

 

If a lender reports to the Internal Revenue Service that as a consequence of or in conjunction with a short sale of residential property the lender has canceled all or a portion of a borrower’s obligation (formerly debt) under a real estate loan agreement and the lender provides to the borrower written evidence of the lender’s report to the Internal Revenue Service, the lender or an assignee of the lender may not bring an action or otherwise seek payment for the residual debt following the short sale.

 

Except as provided below, a borrower or an agent of the borrower may rely on a payoff statement for the purpose of establishing the amount the borrower must pay to satisfy the borrower’s obligation under a real estate loan agreement other than a real estate loan agreement for a construction loan.

 

A borrower or an agent of the borrower may not rely on a payoff statement after a lender prepares and delivers an amended payoff statement to the borrower or borrower’s agent. A lender delivers an amended payoff statement to the borrower or borrower’s agent if the lender provides the amended payoff statement by electronic means as required, sends the amended payoff statement by United States mail postage prepaid and correctly addressed to the borrower or borrower’s agent or sends the amended payoff statement by facsimile, provided that the borrower or borrower’s agent receives the amended payoff statement before the borrower disburses funds for the purpose of satisfying the obligation in accordance with the provisions specified below.

 

If an amount that a borrower owes under a real estate loan agreement, other than a real estate loan agreement for a construction loan, does not appear on a payoff statement or amended payoff statement and the borrower or an agent of the borrower satisfies the obligation set forth in the payoff statement as specified below, the lender may recover the amount only as an unsecured obligation or only by foreclosing a mortgage, trust deed or security agreement for any other property that secures the obligation.

 

To satisfy an obligation set forth in a payoff statement or an amended payoff statement, a borrower must submit the amount shown in the payoff statement or amended payoff statement, instruct the lender to close any line of credit that is related to the obligation and request a certificate specifying that the mortgage has been paid or a reconveyance upon performance before any deadline, expiration date or maturity date specified in the payoff statement or amended payoff statement. A borrower that disburses funds to a lender in the amount shown in the payoff statement or an amended payoff statement has discharged a mortgage for the purpose of requesting a certificate specifying that the mortgage has been paid or performed the borrower’s obligation for the purpose of requesting a reconveyance.