Mortgage Grapevine

OREGON BROKERS SPEAK UP AND FIGHT NOW Senate Bill 965

This is part of several emails being sent to brokers around the state by concerned brokers who are watching this Bill. If you are not aware of SB 965 you need to be NOW. Read below for some points and concerns. Part of the email is designed to help anyone who wants to spaek up. None of the words below are mine. Its a composite of others. Im just posting this to alert you.




If Oregon Senate Bill 965 becomes law, will you remain a mortgage broker?

Oregon SB 965, if you thought you knew what it was, you need to re-read.

The original bill's text is completely gone. All new text is in as of May 8th, 2007. This is not just a "last minute adjustment" someone came up with. This is a well written and thought out change. This had to be planned to happen this way with a thought out strategy in advance.

As I read this current version passed by the Senate (and those of you that are attorneys or understand better, please correct me):

Yes, loan officers are liable for damages from the consumer in the current version of the bill. Also, the mortgage broker licensee personally, not just your corporation.

Major new bullet points:

· All loans apply now that meet definitions. (Sec. 2 Definitions)

o Any:

§ Interest Only Loan

§ Reduced Documentation Loan

§ Short Term Introductory interest rates (read "ARM")

· "Simultaneous second-lien loan" is mentioned, could they be adding that to this bills liabilities? Are 80/20s 80/10/10s dead?

o Introduced Bill only applied to "High Cost Loans" of 7 points or more.

· The DBCS has new police powers to bring suit in court (Sec. 11 Rulemaking & Enforcement)

o They don't just need Consent Orders or in office procedures anymore

o Court can award the DBCS attorneys fees as well now

(the bullet point above can never happen..never happen. Now I can see why the head of the DFCS, this Tatman boy sat with a smirk on his face when this issue came up.)

· Sets statute for private cause of actions for damages (read consumers sue your company, and you individually) (Sec. 11 Rulemaking & Enforcement & Sec. 12 )

o The summary notes on the prior amendment even state this as a specific reason for the new bill as written.

· Individual loan officers and managers (along with owners) personally liable for damages to consumer (Sec. 13)

o Could this Sec. 13 be construed as to include Realtors, appraisers, escrow, or ??



· Bill takes effect on passage (read now)

o original bill took effect Jan. 1 2008 to give time to adjust and plan.

Read the "Findings", "Loan Terms and Underwriting Standards", "Risk Management Practices", "Consumer Protection Standards" and ask yourself:


· Will wholesale lenders offer these products to mortgage brokers with the risks for liability with this language for implementation?

· Will any mortgage broker or loan officer write these loans with their house and savings account on the line for a court & jury to decide if they wrote the right loan to the consumer 18 months later and the customer is behind on payments?

· What will our bonding companies do to our bond rates, if they will even write a bond any more to a mortgage broker with the increased liability?

Why should "I" worry? "I" don't do hardly any Reduced Doc, Option ARM or Interest Only anyway.

· I do worry about a level playing field for competition though

· I do worry that this bill could make worse in OREGON, the downward spiral of home values

· I do worry that this bill could make worse the potential foreclosure problem in OREGON

This Bill doesn't stop these loans, or stop these practices, it just stops Oregon Mortgage Brokers from doing them for all intense purposes.

Who can still do all these loans without any liability from this bill?

BANKS & those exempt "affiliated with BANKS" mortgage companies that hide behind Federal preemption from State oversight.

Mortgage Brokers will be at a major competitive disadvantage unless federal law passes exact enforcement statutes.

Mortgage Brokers as we currently know it, will go away. This may be the goal of the persons responsible for this bill. The consumers in Oregon will suffer with higher costs loans and less options though.

All of us in this profession will become Banks in some manner to avoid liability and be competitive.

Is OREGON to be the strictest law in the land now regarding mortgage brokers?

Are we to fall on our swords to set a precedent nationally and hope Federal law follows suit soon?

Where is the OAMP with mass emails on this Bill as written since 05/08/2007 and passed the Oregon Senate?

· I hope legislative committee and the Board are well aware of this new text and are mobilizing as this is being written.

· Hopefully the strictest legislation with the most liability to mortgage brokers individually to be passed in any state's legislature warrants higher attention from the state's mortgage broker association.

If you don't believe me, read the state's web site yourself.
Senate Bill 965

Senate Amendments ( html | pdf )
A-Engrossed ( html | pdf )
Introduced ( html | pdf )


SB 965


By Senators AVAKIAN, BROWN, METSGER, MONNES ANDERSON -- Relating to lending practices; declaring an emergency.

03/08 (S)

Introduction and first reading. Referred to President's desk.

03/15 (S)

Referred to Business, Transportation and Workforce Development.

04/04 (S)

Public Hearing held.

04/25 (S)

Work Session held.

04/26 (S)


Work Session held.

05/08 (S)


Recommendation: Do pass with amendments. (Printed A-Eng.)

05/09 (S)


Second reading.

05/10 (S)


Taken from 05-10 Calendar and placed on 05-11 Calendar on voice vote.

05/11 (S)


Third reading. Carried by Avakian. Passed. Ayes, 24; Nays, 2--Beyer, Kruse; Excused, 4--Atkinson, George, G., George, L., Winters.

05/14 (H)


First reading. Referred to Speaker's desk.


by JustplainMarvin May 18, 2007 12:00 AM

http://www.leg.state.or.us/07reg/measpdf/sb0900.dir/sb0965.1sa.pdf,
by JustplainMarvin May 18, 2007 12:00 AM

It has been clear to me since before I got my license that OAMB was leveraging its bias from those it purported to advocate for US!

Yes I saw this on the horizon. There was primarily ONE large mortgage company that advocated these changes. If you read back into the history you will identify which company and WHOM individually I may be referring to. Obviously it would be unwise on my part to directly state the business or individual. Just look back into the origin of this legislation and you will find for yourself that this is merely a ´Consolidation´ effort on that companies part which is as you correctly observe is intended to drive us independents out of the market place.

Oregon Already has tough licensing requirements and tough originator requirements. The changes DO NOT effect their business [pipeline] BUT you do correctly identify this increased BURDEN placed on independents which for all intents and purposes places us in a position where we spend MORE time being Compliant than we actually do providing our services to those that truly need us.

What can I add....? A shrug of my shoulders....I am just a little guy like most here. Will I be renewing my license...? Don´t know yet.

Cascadia Mortgage
by Oregon_Money_Man May 20, 2007 12:00 AM

I am not a mortgage broker. I am personally involved in the lives of many people. I am a physician. I take issue w. the pervious writers assertion/suggestion that mortgage brokers and their companies should not be responsible for bad loans that they direct a customer into. You should take full responsibility for it. Absolutely. In my profession, I am MANDATED to take full responsibility. Lawyers frequently remind us as a group. I am responsible for directing the healthcare decisions that a patient takes. Likewise, YOU should be responsible for directing the financial health of individuals and families. Why is it that if a health care provider makes a wrong recommendation, they can get sued. A financial advisor/ stock broker or mortgage broker can make a recommendation that may not have the consumers best interest at heart which can end in complete financial and therefore emotional devastation and nothing most likely will happen. They still get their commission. In a sense mortgage brokers greed and shenanigans keep us docs in business, because we have to deal with the depression and anxiety that you could have prevented if you TRULY had the best interest of your customer at heart. Thanks for the business!! IT IS TIME TO STEP UP TO THE PLATE AND BE RESPONSIBLE FOR YOUR "PROFESSION." I wonder why there is opposition? If there is nothing to hide and there is no greed at heart, the mortgage broker should have nothing to fear. My profession has been under assault for many years by lawyers and it is highly regulated but we still thrive doing an honest days work. Granted there are bad seeds in any profession but as always, the few screw it up for the rest of us. Now lets get to playing!!
by drtanko August 10, 2007 12:00 AM

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