Oregon Department of Justice Issues Mortgage Servicing Rule
January 31, 2012
January 31, 2012
On Friday, Jan. 27, the Oregon Department of Justice (DOJ) issued a temporary rule governing mortgage loan servicing. The rule covers anyone engaged in mortgage loan servicing (lenders, servicers and servicing agents) for a residential real estate property located in Oregon. The rule is effective immediately.
Under the rule, mortgage servicers will not be able to impose a late fee if payment was received by the due date (or within any applicable grace period). Servicers will not be able to collect any default-related fee that is not explicitly laid out in the contract. In addition, misrepresentation is prohibited, specifically information about loan modification or in any sworn statement about the borrower’s default or the servicer’s right to foreclose.
To comply with this new rule, servicers must deal with borrowers in good faith. They must provide a borrower with notice that the borrower’s request for modification has been denied. This notice must be provided with 10 days of said denial, but never less than 20 days before the foreclosure sale. Servicers must also follow RESPA rules about servicing transfer notices and qualified written response requirements. Finally, according to the DOJ, servicers must 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.”
This temporary rule is set to expire on July 24, 2012. In the interim, the Oregon DOJ will be working to create a permanent rule to replace it.
Questions about complying with this rule should be directed to firstname.lastname@example.org or 800.546.4465.
Questions or comments about the advocacy process for the permanent rule should be directed to NWCUA Director of Regulatory Advocacy Jaycee Winn at email@example.com or 800-995-9064 x 209.
Posted in Compliance.