Oregon Adopts Temporary Servicer Rules, Enacts Law Regarding Affordable Housing Covenants

Mortgage Servicing

Recently, Oregon adopted temporary rules that declare certain mortgage servicing practices to be unlawful trade practices. Effective January 27, 2012 through July 24, 2012, it is unfair and deceptive for a mortgage loan servicer to (i) assess late fees or delinquency charges for payments received by the payment’s due date or within any applicable grace period, (ii) assess or collect default-related fees that the servicer is not legally authorized to collect under the terms of the residential mortgage loan, deed of trust, or mortgage, (iii) fail to follow guidelines issued by the FHFA for loans made or held by government sponsored enterprises for borrowers pursuing an alternative to foreclosure, (iv) misrepresent any material information regarding a loan modification, (v) fail to provide a borrower with notice that the borrower’s request for loan modification has been denied or rejected within ten days of the denial or rejection, but in no event, less than twenty days before a scheduled trustee sale, (vi) fail to comply with certain provisions of RESPA, and (vii) fail to deal with a borrower in good faith.

Oregon also enacted, on February 27, 2012, SB 1535. The law authorizes affordable housing covenants contained in a recorded master form instrument to be incorporated by reference in a short form instrument recorded for a real property transaction. The change is effective immediately and is intended to reduce errors in the recording of affordable housing covenants.