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Oregon Bulletin

March 1, 2012

Department of Justice, Chapter 137

Rule Caption: Mortgage Loan Servicing.

Adm. Order No.: DOJ 2-2012(Temp)

Filed with Sec. of State: 1-27-2012

Certified to be Effective: 1-27-12 thru 7-24-12

Notice Publication Date:

Rules Adopted: 137-020-0800

Subject: OAR 137-020-0800 declares certain practices relating to mortgage loan servicing to be unlawful trade practices. Under the rule, it is unfair and deceptive for a mortgage loan servicer to, among other things, assess late fees for on-time payments; assess or collect unauthorized default fees; fail to follow guidelines issued by the Federal Home Financing Agency for loans made or held by government sponsored enterprises for borrowers pursuing an alternative to foreclosure; misrepresent any material information regarding a loan modification; fail to comply with certain provisions of the Real Estate Settlement Procedures Act; and, fail to deal with a borrower in good faith.

Rules Coordinator: Carol Riches—(503) 947-4700

137-020-0800

Mortgage Loan Servicing

(1) Purpose: The purpose of this rule is to declare as unfair or deceptive in trade or commerce certain practices relating to the servicing of a residential mortgage loan.

(2) Authority: This rule is adopted pursuant to ORS Chapter 183 on authority granted to the Attorney General by ORS 646.608(1)(u) and (4) and Oregon Laws 2010, chapter 94, section 6(3) (Special Session).

(3) Effective Date: January 27, 2012.

(4) Definitions: As used in this rule:

(a) “Borrower” means an individual who is obligated to repay a loan under a residential mortgage loan agreement, and includes the individual’s spouse, domestic partner, and heirs;

(b) “Good faith” means honesty in fact and the observance of reasonable standards of fair dealing;

(c) “Mortgage loan servicer” means a person engaging in the servicing of residential mortgage loans in this state and includes a person who makes or holds a mortgage loan if the person is the holder of the mortgage servicing rights or has been delegated servicing functions for the mortgage loan;

(d) “Residential mortgage loan” means a loan to a natural person made primarily for personal, family or household use, secured by a mortgage or other consensual security interest on residential real property located in this state;

(e) “Servicing of residential mortgage loans” includes, but is not limited to:

(A) Collecting or remitting, or having the right or obligation to collect or remit, for a lender, note owner, note holder or other holder of an interest in a note, payments, interest, principal and trust items, including but not limited to hazard insurance and taxes, on a residential mortgage loan in accordance with the terms of the loan, and includes loan payment follow-up, delinquency loan follow-up, loan analysis and any notifications to the borrower that are necessary to enable the borrower to keep the loan current and in good standing;

(B) Bringing and maintaining a suit or action to collect amounts owed on a residential mortgage loan, including but not limited to exercising contractual, statutory or common law remedies such as injunction, specific performance, judicial or nonjudicial foreclosure or receivership; and,

(C) Taking action for the purpose of protecting the lender’s, note owner’s, note holder’s or other owner of an interest in the note’s interest in the property and rights under the security instrument. “Servicing of residential mortgage loans” does not include the activities of any person licensed or authorized to act as an attorney, escrow agent, title company, or title insurer under Oregon law, or any person qualified to serve as a trustee under ORS 86.790.

(f) “Person” has the meaning provided in ORS 646.605(4); and,

(g) “Residential real property” means real property located in this state improved by a one-to-four family residence or residential unit in a building used or occupied, or intended to be used or occupied, wholly or partly, as the primary residence of the borrower, but shall not refer to unimproved real property upon which such dwellings are to be constructed.

(5) Prohibited Conduct: A mortgage loan servicer engages in unfair or deceptive conduct in trade or commerce if the mortgage loan servicer:

(a) Assesses a late fee or delinquency charge for a payment received from a borrower by the payment’s due date or within any applicable grace period;

(b) Assesses or collects any default-related fee or charge that the servicer is not legally authorized to assess or collect under the terms of the residential mortgage loan, deed of trust, or mortgage;

(c) Fails to follow the guidelines issued by the Federal Home Financing Agency for loans made or held by government sponsored enterprises for borrowers pursuing an alternative to foreclosure;

(d) Misrepresents to a borrower any material information regarding a loan modification;

(e) Misrepresents any information set forth in an affidavit, declaration, or other sworn statement detailing a borrower’s default and the servicer’s right to foreclose;

(f) Fails to provide a borrower with notice that the borrower’s request for loan modification has been denied or rejected within 10 days of the denial or rejection, but in no event, less than 20 days before a scheduled trustee sale;

(g) Fails to comply with the requirements of 12 USC 2605(b), 12 USC 2605(c), 12 USC 2605(d), or 12 USC 2605(e); and,

(h) Fails to deal with a borrower in good faith.

Stat. Auth.: ORS 183, 646
Stats. Implemented.: ORS 646.608(1)(u)
Hist.: DOJ 2-2012(Temp), f. & cert. ef. 1-27-12 thru 7-24-12


 

Rule Caption: Amends Notice of Garnishment Model Forms to Respond to Changes in Oregon Law.

Adm. Order No.: DOJ 3-2012

Filed with Sec. of State: 2-2-2012

Certified to be Effective: 2-2-12

Notice Publication Date: 12-1-2011

Rules Amended: 137-060-0130, 137-060-0150, 137-060-0160, 137-060-0230, 137-060-0250, 137-060-0330, 137-060-0350, 137-060-0360, 137-060-0430, 137-060-0450

Subject: Amends existing model garnishment forms for notices of garnishment issued by state agencies and county tax collectors.

Rules Coordinator: Carol Riches—(503) 947-4700

137-060-0130

County Tax — Instructions to Garnishee Form

[ED. NOTE: Forms referenced are available from the agency.]

Stat. Auth.: ORS 18.854(8)
Stats. Implemented: ORS 18.375, 18.385, 18.600 - 18.850, 18.854 & 18.857
Hist.: DOJ 6-2002, f. & cert. ef. 9-24-02; DOJ 3-2008, f. 1-17-08, cert. ef. 1-18-08; DOJ 7-2010, f. & cert. ef. 3-12-10; DOJ 3-2012, f. & cert. ef. 2-2-12

137-060-0150

County Tax — Notice of Exempt Property Form

[ED. NOTE: Forms referenced are available from the agency.]

Stat. Auth.: ORS 18.854(8)
Stats. Implemented: ORS 18.375, 18.385, 18.600 - 18.850, 18.85 & 18.857
Hist.: DOJ 5-2004, f. & cert. ef. 2-11-04; DOJ 3-2008, f. 1-17-08, cert. ef. 1-18-08; DOJ 9-2008, f. 4-30-08, cert. ef. 7-24-08; DOJ 7-2009, f. 6-30-09, cert. ef. 7-24-09; DOJ 7-2010, f. & cert. ef. 3-12-10; DOJ 3-2012, f. & cert. ef. 2-2-12

137-060-0160

County Tax — Wage Exemption Calculation Form

[ED. NOTE: Forms referenced are available from the agency.]

Stat. Auth.: ORS 18.854(8)
Stats. Implemented: ORS 18.375, 18.385, 18.600 - 18.850, 18.854 & 18.857
Hist.: DOJ 5-2004, f. & cert. ef. 2-11-04; DOJ 3-2008, f. 1-17-08, cert. ef. 1-18-08; DOJ 9-2008, f. 4-30-08, cert. ef. 7-24-08; DOJ 7-2009, f. 6-30-09, cert. ef. 7-24-09; DOJ 3-2012, f. & cert. ef. 2-2-12

137-060-0230

State Tax — Instructions to Garnishee Form

[ED. NOTE: Forms referenced are available from the agency.]

Stat. Auth.: ORS 18.854(8)
Stats. Implemented: ORS 18.375, 18.385 & 18.600 - 18.855
Hist.: DOJ 5-2004, f. & cert. ef. 2-11-04; DOJ 3-2008, f. 1-17-08, cert. ef. 1-18-08; DOJ 7-2010, f. & cert. ef. 3-12-10; DOJ 3-2012, f. & cert. ef. 2-2-12

137-060-0250

State Tax — Notice of Exempt Property Form

[ED. NOTE: Forms referenced are available from the agency.]

Stat. Auth.: ORS 18.854(8)
Stats. Implemented: ORS 18.375, 18.385 & 18.600 - 18.855
Hist.: DOJ 5-2004, f. & cert. ef. 2-11-04; DOJ 3-2008, f. 1-17-08, cert. ef. 1-18-08; DOJ 7-2010, f. & cert. ef. 3-12-10; DOJ 3-2012, f. & cert. ef. 2-2-12

137-060-0330

Debts other than State Tax — Instructions to Garnishee Form

[ED. NOTE: Forms referenced are available from the agency.]

Stat. Auth.: ORS 18.854(8)
Stats. Implemented: ORS 18.375, 18.385 & 18.600 - 18.855
Hist.: DOJ 5-2004, f. & cert. ef. 2-11-04; DOJ 3-2008, f. 1-17-08, cert. ef. 1-18-08; DOJ 7-2010, f. & cert. ef. 3-12-10; DOJ 3-2012, f. & cert. ef. 2-2-12

137-060-0350

Debts other than State Tax — Notice of Exempt of Property Form

[ED. NOTE: Forms referenced are available from the agency.]

Stat. Auth.: ORS 18.854(8)
Stats. Implemented: ORS 18.375, 18.385 & 18.600 - 18.855
Hist.: DOJ 5-2004, f. & cert. ef. 2-11-04; DOJ 3-2008, f. 1-17-08, cert. ef. 1-18-08; DOJ 9-2008, f. 4-30-08, cert. ef. 7-24-08; DOJ 7-2009, f. 6-30-09, cert. ef. 7-24-09; DOJ 7-2010, f. & cert. ef. 3-12-10; DOJ 3-2012, f. & cert. ef. 2-2-12

137-060-0360

Debts other than State Tax — Wage Exemption Calculation Form

[ED. NOTE: Forms referenced are available from the agency.]

Stat. Auth.: ORS 18.854(8)
Stats. Implemented: ORS 18.375, 18.385 & 18.600-18.855
Hist.: DOJ 5-2004, f. & cert. ef. 2-11-04; DOJ 3-2008, f. 1-17-08, cert. ef. 1-18-08; DOJ 9-2008, f. 4-30-08, cert. ef. 7-24-08; DOJ 7-2009, f. 6-30-09, cert. ef. 7-24-09; DOJ 3-2012, f. & cert. ef. 2-2-12

137-060-0430

Special Notice of Garnishment — Instructions to Garnishee Form

[ED. NOTE: Forms referenced are available from the agency.]

Stat. Auth.: ORS 18.854(8)
Stats. Implemented: ORS 18.375, 18.385 & 18.600 - 18.855
Hist.: DOJ 5-2004, f. & cert. ef. 2-11-04; DOJ 3-2008, f. 1-17-08, cert. ef. 1-18-08; DOJ 7-2010, f. & cert. ef. 3-12-10; DOJ 3-2012, f. & cert. ef. 2-2-12

137-060-0450

Special Notice of Garnishment — Notice of Exempt Property Form

[ED. NOTE: Forms referenced are available from the agency.]

Stat. Auth.: ORS 18.854(8)
Stats. Implemented: ORS 18.375, 18.385 & 18.600 - 18.855
Hist.: DOJ 5-2004, f. & cert. ef. 2-11-04; DOJ 3-2008, f. 1-17-08, cert. ef. 1-18-08; DOJ 7-2010, f. & cert. ef. 3-12-10; DOJ 3-2012, f. & cert. ef. 2-2-12


 

Rule Caption: Mortgage Loan Servicing.

Adm. Order No.: DOJ 4-2012(Temp)

Filed with Sec. of State: 2-15-2012

Certified to be Effective: 2-15-12 thru 7-24-12

Notice Publication Date:

Rules Adopted: 137-020-0805

Rules Suspended: 137-020-0800(T)

Subject: OAR 137-020-0800 declared certain practices relating to mortgage loan servicing to be unlawful trade practices. Under the rule, it is unfair and deceptive for a mortgage loan servicer to, among other things, assess late fees for on-time payments; assess or collect unauthorized default fees; misrepresent any material information regarding a loan modification; fail to comply with certain provisions of the Real Estate Settlement Procedures Act; and, fail to deal with a borrower in good faith.

 Since issuing OAR 137-020-0800, some members of the mortgage servicing industry have expressed concern about the rule’s applicability to open-end credit loans such as home equity lines of credit, and have expressed concern that some of the guidelines referenced in the rule are not readily available. DOJ is suspending OAR 137-020-0800 and reissues the rule as OAR 137-020-0805, making several changes. First, the new rule exempts open-end credit such as home equity lines of credit from the definition of “residential mortgage loan.” The new rule also deletes the requirement that a mortgage loan servicer follow FHFA guidelines for borrowers pursuing an alternative to foreclosure. Finally, OAR 137-020-0805 clarifies the effective date of the provisions of the Real Estate Settlement Procedures Act with which mortgage loan servicers must comply.

Rules Coordinator: Carol Riches—(503) 947-4700

137-020-0800

Mortgage Loan Servicing

(1) Purpose: The purpose of this rule is to declare as unfair or deceptive in trade or commerce certain practices relating to the servicing of a residential mortgage loan.

(2) Authority: This rule is adopted pursuant to ORS Chapter 183 on authority granted to the Attorney General by ORS 646.608(1)(u) and (4) and Oregon Laws 2010, chapter 94, section 6(3) (Special Session).

(3) Effective Date: January 27, 2012.

(4) Definitions: As used in this rule:

(a) “Borrower” means an individual who is obligated to repay a loan under a residential mortgage loan agreement, and includes the individual’s spouse, domestic partner, and heirs;

(b) “Good faith” means honesty in fact and the observance of reasonable standards of fair dealing;

(c) “Mortgage loan servicer” means a person engaging in the servicing of residential mortgage loans in this state and includes a person who makes or holds a mortgage loan if the person is the holder of the mortgage servicing rights or has been delegated servicing functions for the mortgage loan;

(d) “Residential mortgage loan” means a loan to a natural person made primarily for personal, family or household use, secured by a mortgage or other consensual security interest on residential real property located in this state;

(e) “Servicing of residential mortgage loans” includes, but is not limited to:

(A) Collecting or remitting, or having the right or obligation to collect or remit, for a lender, note owner, note holder or other holder of an interest in a note, payments, interest, principal and trust items, including but not limited to hazard insurance and taxes, on a residential mortgage loan in accordance with the terms of the loan, and includes loan payment follow-up, delinquency loan follow-up, loan analysis and any notifications to the borrower that are necessary to enable the borrower to keep the loan current and in good standing;

(B) Bringing and maintaining a suit or action to collect amounts owed on a residential mortgage loan, including but not limited to exercising contractual, statutory or common law remedies such as injunction, specific performance, judicial or nonjudicial foreclosure or receivership; and,

(C) Taking action for the purpose of protecting the lender’s, note owner’s, note holder’s or other owner of an interest in the note’s interest in the property and rights under the security instrument.

“Servicing of residential mortgage loans” does not include the activities of any person licensed or authorized to act as an attorney, escrow agent, title company, or title insurer under Oregon law, or any person qualified to serve as a trustee under ORS 86.790.

(f) “Person” has the meaning provided in ORS 646.605(4); and,

(g) “Residential real property” means real property located in this state improved by a one-to-four family residence or residential unit in a building used or occupied, or intended to be used or occupied, wholly or partly, as the primary residence of the borrower, but shall not refer to unimproved real property upon which such dwellings are to be constructed.

(5) Prohibited Conduct: A mortgage loan servicer engages in unfair or deceptive conduct in trade or commerce if the mortgage loan servicer:

(a) Assesses a late fee or delinquency charge for a payment received from a borrower by the payment’s due date or within any applicable grace period;

(b) Assesses or collects any default-related fee or charge that the servicer is not legally authorized to assess or collect under the terms of the residential mortgage loan, deed of trust, or mortgage;

(c) Fails to follow the guidelines issued by the Federal Home Financing Agency for loans made or held by government sponsored enterprises for borrowers pursuing an alternative to foreclosure;

(d) Misrepresents to a borrower any material information regarding a loan modification;

(e) Misrepresents any information set forth in an affidavit, declaration, or other sworn statement detailing a borrower’s default and the servicer’s right to foreclose;

(f) Fails to provide a borrower with notice that the borrower’s request for loan modification has been denied or rejected within 10 days of the denial or rejection, but in no event, less than 20 days before a scheduled trustee sale;

(g) Fails to comply with the requirements of 12 USC 2605(b), 12 USC 2605(c), 12 USC 2605(d), or 12 USC 2605(e); and,

(h) Fails to deal with a borrower in good faith.

Stat. Auth.: ORS 183, 646
Stats. Implemented.: ORS 646.608(1)(u)
Hist.: DOJ 2-2012(Temp), f. & cert. ef. 1-27-12 thru 7-24-12; Suspended by DOJ 4-2012(Temp), f. & cert. ef. 2-15-12 thru 7-24-12

137-020-0805

Mortgage Loan Servicing

(1) Purpose: The purpose of this rule is to declare as unfair or deceptive in trade or commerce certain practices relating to the servicing of a residential mortgage loan.

(2) Authority: This rule is adopted pursuant to ORS Chapter 183 on authority granted to the Attorney General by ORS 646.608(1)(u) and (4) and Oregon Laws 2010, chapter 94, section 6(3) (Special Session).

(3) Effective Date: February 15, 2012.

(4) Definitions: As used in this rule:

(a) “Borrower” means an individual who is obligated to repay a loan under a residential mortgage loan agreement, and includes the individual’s spouse, domestic partner, and heirs;

(b) “Good faith” means honesty in fact and the observance of reasonable standards of fair dealing;

(c) “Mortgage loan servicer” means a person engaging in the servicing of residential mortgage loans in this state and includes a person who makes or holds a mortgage loan if the person is the holder of the mortgage servicing rights or has been delegated servicing functions for the mortgage loan;

(d) “Residential mortgage loan” means a loan to a natural person made primarily for personal, family or household use, other than a loan for open-end credit, as that term is defined in 12 CFR 1026.2(20), as in effect on December 30, 2011, secured by a mortgage or other consensual security interest on residential real property located in this state;

(e) “Servicing of residential mortgage loans” includes, but is not limited to:

(A) Collecting or remitting, or having the right or obligation to collect or remit, for a lender, note owner, note holder or other holder of an interest in a note, payments, interest, principal and trust items, including but not limited to hazard insurance and taxes, on a residential mortgage loan in accordance with the terms of the loan, and includes loan payment follow-up, delinquency loan follow-up, loan analysis and any notifications to the borrower that are necessary to enable the borrower to keep the loan current and in good standing;

(B) Bringing and maintaining a suit or action to collect amounts owed on a residential mortgage loan, including but not limited to exercising contractual, statutory or common law remedies such as injunction, specific performance, judicial or nonjudicial foreclosure or receivership; and,

(C) Taking action for the purpose of protecting the lender’s, note owner’s, note holder’s or other owner of an interest in the note’s interest in the property and rights under the security instrument. “Servicing of residential mortgage loans” does not include the activities of any person licensed or authorized to act as an attorney, escrow agent, title company, or title insurer under Oregon law, or any person qualified to serve as a trustee under ORS 86.790.

(f) “Person” has the meaning provided in ORS 646.605(4); and,

(g) “Residential real property” means real property located in this state improved by a one-to-four family residence or residential unit in a building used or occupied, or intended to be used or occupied, wholly or partly, as the primary residence of the borrower, but shall not refer to unimproved real property upon which such dwellings are to be constructed.

(5) Prohibited Conduct: A mortgage loan servicer engages in unfair or deceptive conduct in trade or commerce if the mortgage loan servicer:

(a) Assesses a late fee or delinquency charge for a payment received from a borrower by the payment’s due date or within any applicable grace period;

(b) Assesses or collects any default-related fee or charge that the servicer is not legally authorized to assess or collect under the terms of the residential mortgage loan, deed of trust, or mortgage;

(c) Misrepresents to a borrower any material information regarding a loan modification;

(d) Misrepresents any information set forth in an affidavit, declaration, or other sworn statement detailing a borrower’s default and the servicer’s right to foreclose;

(e) Fails to provide a borrower with notice that the borrower’s request for loan modification has been denied or rejected within 10 days of the denial or rejection, but in no event, less than 20 days before a scheduled trustee sale;

(f) Fails to comply with the requirements of 12 USC 2605(b), 12 USC 2605(c), 12 USC 2605(d), or 12 USC 2605(e), as in effect on January 1, 2012; and,

(g) Fails to deal with a borrower in good faith.

Stat. Auth.: ORS 183 & 646
Stats. Implemented.: ORS 646.608(1)(u)
Hist.: DOJ 4-2012(Temp), f. & cert. ef. 2-15-12 thru 7-24-12

Notes
1.) This online version of the OREGON BULLETIN is provided for convenience of reference and enhanced access. The official, record copy of this publication is contained in the original Administrative Orders and Rulemaking Notices filed with the Secretary of State, Archives Division. Discrepancies, if any, are satisfied in favor of the original versions. Use the OAR Revision Cumulative Index found in the Oregon Bulletin to access a numerical list of rulemaking actions after November 15, 2011.

2.) Copyright 2012 Oregon Secretary of State: Terms and Conditions of Use

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Phone: (503) 986-1523 • Fax: (503) 986-1616 • oregon.sos@state.or.us

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