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Oregon SB 98 brings about changes in the law for residential mortgage loan servicers, who must now post a surety bond and get a license in order to do business. The new law will take effect on January 1, 2018.
Residential mortgage loan servicers receive mortgage payments from borrowers and pay the lender or other person principal, interest, or other agreed-upon amounts in accordance with the contract between the servicers and the lender. Servicers also pay the borrower “if the residential mortgage loan is a home equity conversion mortgage or a reverse mortgage.”
Oregon residential mortgage loan servicers will apply for licensure through the state Department of Consumer and Business Services. The Director of the Department will decide whether applicants will submit their information to the Department itself or through the Nationwide Multistate Licensing System (NMLS). Listed is some of the information required with an application:
- Fingerprints from all applicant’s controllers, registered agents, or managers
- Applicant’s NMLS unique identifier
- Name and address of applicant’s registered agent
- Street address of applicant’s principal place of business and addresses of any other branch offices where the applicant will perform service residential mortgage loans
- Name of managers of any branch office the applicant maintains in Oregon
- Business name under which the applicant will operate (if any)
�The Director may require other information from would-be mortgage loan servicers, and the applicant will also be required to pay any fees specified by the Director by rule. Along with this information, the mortgage loan servicer applicant must also submit a surety bond in an amount the Director will also specify by rule. The surety bond guarantees that the servicer will service residential mortgage loans in accordance with Oregon law. Clients can file a claim against the surety bond if the servicer breaks the terms of the bond, causing the client monetary damage.
A registered agent, as required in the application, is a person in the state of Oregon who is “available to receive on the licensee�s behalf any notice, demand or service of process permitted by law to be given, made or delivered to, or served upon, the licensee,” per Section 5 of SB 98. Residential mortgage loan servicers are also expected to maintain sufficient liquidity, operating reserves, and tangible net worth to meet the costs of servicing mortgage loans. The amount required will be specified by rule by the Director.
Be sure to read SB 98 in its entirety to understand what the new licensing process means for your residential mortgage loan servicer application. Starting your application and need an Oregon surety bond? Single Source Insurance can help.