Oregon Updates Mortgage Lending Rules to Comply with Federal Disclosure Requirements

• December 31, 2015
• Laura Eckstein

December 31, 2015
By Laura Eckstein, J.D.
The Oregon Department of Consumer and Business Services, Division of Finance and Corporate Securities, amended its recordkeeping requirements to accommodate the recent changes made by the Consumer Financial Protection Bureau (“CFPB”) to the federally-mandated mortgage disclosures.  Since 2011 federal law has mandated that the CFPB establish a single disclosure scheme for use by lenders or creditors in complying with the disclosure requirements of both the Real Estate Settlement Procedures Act and the Truth in Lending Act. The CFPB issued its rule combining the disclosures on November 20, 2013, effective October 3, 2015.
OAR 441-865-0060
Oregon rules specify that the lender or broker keep a copy of completed federally-mandated disclosures in order to preserve records of loan transactions to assist the department in performing full and fair examinations of licensed mortgage bankers and brokers. These provisions are effective immediately.
Taking a Residential Mortgage Application
(1) In addition to the books and records required under the provisions of OAR 441-865-0010 to 441-865-0090, a mortgage banker or mortgage broker that takes an application for a residential mortgage transaction must prepare and maintain the following:

• A copy of each executed loan application form, including the unique identifier of the mortgage loan originator that took the residential mortgage loan application and offered to negotiate or negotiated the terms of the loan;
• A copy of each executed fee agreement, if prepared;
• In the case of residential or single family loans, a borrower acknowledged statement that a loan interest rate will float or a copy of the executed lock agreement. The lock agreement shall specify at a minimum the: date of the agreement; file identification, and property address; lock-in rate; lock expiration date; disclosure that the lock may be subject to change if any of the loan factors change; and disclosure that if the lock expires, the rate and points are subject to change; and the term of the loan.
• A copy of all correspondence with the borrower in writing or in a format easily converted to writing;
• A copy of any documents noting approval or denial of a borrower’s mortgage loan application;
• A copy of all documents submitted by a borrower to the mortgage banker or mortgage broker in connection with the loan application;
• If required to be prepared for the residential mortgage transaction, a copy of the good faith estimate required by Regulation X, 12 C.F.R. Part 1024, and translated as applicable to comply with 86A.198;
• A copy of the executed Authorization to Release Credit Information Form;
• Copies of every credit report accessed by the mortgage banker or mortgage broker in connection with the transaction;
• If required to be prepared for the residential mortgage transaction, copies of the Truth in Lending Disclosure Statement required by Regulation Z, 12 C.F.R. Part 1026 and translated as applicable to comply with ORS 86A.198;
• If required to be prepared for the residential mortgage transaction, a copy of the final HUD-1 settlement statement required by 12 C.F.R. Part 1024; and

Funding a Residential Mortgage Transaction(2) In addition to the books and records required under the provisions of section (1) of this rule and OAR 441-865-0010 to 441-865-0090, a mortgage banker that funds a residential mortgage transaction must also prepare and maintain the following in the loan file:

• A summary of information on the loan funding program parameters required for the loan’s key terms;
• A copy of each executed loan application form, including on the form the unique identifier of the mortgage loan originator that took the residential mortgage loan application and offered to negotiate or negotiated the terms of the loan;
• A copy of all documentation relied upon in making the loan decision;
• A copy of the borrower executed note and executed trust deed;
• A copy of the good faith estimate prepared under Regulation X, 12 C.F.R. Part 1024 and translated as applicable to comply with ORS 86A.198;
• If required to be prepared for the residential mortgage transaction, a copy of the every credit report accessed by the mortgage banker or mortgage broker in connection with the transaction;
• If required to be prepared for the residential mortgage transaction, a copy of any disclosure required by Regulation Z, 12 C.F.R. Part 1026 and translated as applicable to comply with ORS 86A.198, including, but not limited to, the Truth in Lending disclosure statement;
• A copy of the final HUD-1 settlement statement required by 12 C.F.R. Part 1024; and
• A copy of the statement that notifies the borrower that loan documents associated with the transaction will be in English and that advises the borrower to obtain appropriate assistance, with any necessary translations as required by ORS 86A.195.

(3) A mortgage broker that closes a residential mortgage loan in the name of the broker shall retain the records required in Sections (1) and (2) of this rule.

About the Author
Laura Eckstein, J.D is a Regulatory Compliance Consultant at Bankers Advisory.
She is a graduate of the University of Rhode Island and earned her Juris Doctor at Suffolk Law School. She is admitted to the Bar in Massachusetts and New Hampshire. She may be reached at laura.eckstein@bankersadvisory.com

Tags: Oregon, Mortgage Lending, Real Estate Lending, State Mortgage Compliance | 1 Comment »