Oregon Department of Consumer and Business Services, Finance and Securities Regulation

Rule Rule 441-870-0050
Investor Transactions


A dishonest, fraudulent or illegal practice or conduct under ORS 86A.115 (Grounds for denying, suspending, conditioning or revoking license) includes, but is not limited to, the following conduct by a person in connection with a mortgage loan:

(1)

Failing to provide to investors who are persons other than persons enumerated pursuant to ORS 59.035 (Transactions exempt from registration)(4) and (5), prior to the time of sale of any interest in real estate paper, a written disclosure document which contains the following information:

(a)

The priority of the lien created by the security and the total face amount of any senior liens;

(b)

A statement whether any future advances may have a priority senior to that of the lien created by the security;

(c)

A copy of the most recent complete property tax statement, covering the real property underlying the security;

(d)

The value of the real property underlying the security. This value must be provided by:

(A)

The tax assessed value if it is 100 percent of the true cash value and is on the same property underlying the security; or

(B)

An appraisal by an independent licensed appraiser.

(e)

The debtor’s payment record, on the instrument being sold for the two years immediately preceding the sale. When the debtor’s payment record is less than two years or not available:

(A)

The payment record to date or a statement that payment records are not available; and

(B)

A current credit report on the debtor prepared by a credit reporting agency or a current financial statement of the debtor.

(f)

The terms of any senior lien or a copy of the instrument creating the lien and any assignments;

(g)

If the mortgage seller, seller’s agent, or any affiliate is the debtor, a statement disclosing that fact and the amount of cash paid to the debtor in consideration for the issuance of the real estate paper;

(h)

A statement of any commissions, collection fees, and other costs chargeable to the purchaser of the real estate paper;

(i)

A prominent statement of any balloon payments;

(j)

In the case of a sale of junior real estate paper, a statement of the risk of loss on foreclosure of a senior lien; and

(k)

A statement of whether or not the purchaser of the real estate paper will be insured against casualty loss.

(2)

In the case of transactions involving securities sold under a registration which is currently effective, compliance with the provisions of this rule shall be deemed to be satisfied if the mortgage banker or mortgage broker provides to the investor a copy of the offering memorandum which was submitted to the director as part of the application to register securities pursuant to ORS Chapter 59 (Securities Regulation).

(3)

In the case of transactions which are exempt from registration under the provisions of ORS 59.035 (Transactions exempt from registration)(7), compliance with the provisions of this rule shall be deemed to be satisfied if the mortgage banker or mortgage broker provides to the investor a copy of the risk disclosure section of an offering memorandum prepared for sales of similar, but non-exempt securities, if the memorandum was submitted to the director as a part of the registration application and that the registration is effective at the time the document is provided to the investor.
Source

Last accessed
Jun. 8, 2021