Mortgage Lending

ORS 86A.151
Liability of person that employs mortgage loan originator

  • recovery of damages
  • limitations on proceeding
  • action against bond or letter of credit
  • attorney fees


A person that employs a mortgage loan originator or under the provisions of ORS 86A.200 (Definitions) to 86A.239 (Display of license and unique identifier) should employ a mortgage loan originator is liable as provided in subsection (2) of this section for an ascertainable loss of money or property, real or personal, in a residential mortgage transaction if the person engages in a residential mortgage transaction in which the person:


Violates a provision of ORS 86A.200 (Definitions) to 86A.239 (Display of license and unique identifier), except ORS 86A.236 (Prohibited activities) (11), or ORS 86A.095 (Short title) to 86A.198 (Materials in languages other than English), except ORS 86A.115 (Grounds for denying, suspending, conditioning or revoking license) (4); or


(A)(i) Makes an untrue statement of a material fact; or


Omits from a statement a material fact that would make the statement not misleading in light of the circumstances under which the person makes the statement; and


Fails to prove that the person did not know, or in the exercise of reasonable care could not have known, of the untrue statement or omission.


The person suffering ascertainable loss may recover damages in an amount equal to the ascertainable loss.


A person whose sole function in connection with a residential mortgage transaction is to provide ministerial functions of escrow, custody or deposit services in accordance with applicable law is liable only if the person participates or materially aids in the residential mortgage transaction and the plaintiff sustains the burden of proof that the person knew of the existence of the facts on which liability is based or that the person’s failure to know of the existence of the facts was the result of the person’s recklessness or gross negligence.


Except as otherwise provided in this subsection, an action or suit may not be commenced under this section more than three years after the residential mortgage transaction. An action under this section for a violation under subsection (1)(b) of this section or ORS 86A.154 (Fraud and deceit with respect to mortgage banker or mortgage broker business) may be commenced within three years after the residential mortgage transaction or two years after the person bringing the action discovered or should have discovered the facts on which the action is based, whichever is later, but not later than five years after the date of the residential mortgage transaction. Failure to commence an action on a timely basis is an affirmative defense.


A person has a right of action under the corporate surety bond or irrevocable letter of credit required under ORS 86A.106 (Procedures for licensing) or 86A.227 (Corporate surety bond required) if the person:


Initiates a mortgage banking loan or mortgage loan application; and


Has a right of action against another person under this section.


Subsection (3) of this section does not limit a person’s liability:


For conduct other than in the circumstances described in subsection (3) of this section; or


Under any other law.


Except as provided in subsection (8) of this section, the court may award reasonable attorney fees to the prevailing party in an action under this section.


The court may not award attorney fees to a prevailing defendant under the provisions of subsection (7) of this section if the action under this section is maintained as a class action pursuant to ORCP 32. [Formerly 59.925; 2011 c.9 §5]

(formerly 59.925)

Notes of Decisions

Any person who suffers ascertainable loss in transaction creating security interest in residential property due to mortgage broker or mortgage banker engaging in misrepresentation or violating provision of [former] ORS 59.840 to 59.980 may claim against bond of broker or banker. American Bankers Insurance Co. v. State of Oregon, 337 Or 151, 92 P3d 117 (2004)


Last accessed
Jun. 26, 2021