Press release from the Senate Majority Office 2-8-08:
Senate Commerce Committee Toughen Oversight
of Loan Originators
— Legislation will give state greater authority over mortgage salespeople
SALEM — The Senate Commerce Committee today approved a key piece of the Senate Democratic Agenda for February: legislation that will dramatically strengthen state oversight of mortgage loan originators, giving the Department of Consumer and Business Services the power to regulate bad actors in the mortgage sales business.
“We’ve seen too many Oregon families suffer at the hands of unscrupulous lenders,” said committee member and Senate Majority Leader Richard Devlin (D-Tualatin). “Senate Bill 1064 will give the DCBS the authority it needs to protect Oregonians from those who don’t have the best interests of Oregon’s homeowners at heart.”
Registration with DCBS has been mandatory for loan originators since 2002; however the enforcement mechanism for dealing with problems has not been clear. Senate Bill 1064 gives DCBS the authority to identify and police “bad actors” in the loan originator business by increasing reporting standards and expanding prohibited conduct to include behavior that demonstrates negligence or incompetence. In the case of willful or repeat violations of laws relating to mortgage lending, DCBS will have the authority to deny or revoke unscrupulous loan originators.
“Considering the Federal Reserve recently reduced interest rates, borrowers entering the market or refinancing a home deserve quality standards,” said Sen. Ben Westlund (D-Tumalo), chair of the Senate Commerce Committee. “Enacting higher standards for loan originators is a crucial piece of making sure this type of crisis doesn’t happen again in the future.”
Reining in unlicensed loan originators is a key part of the Oregon Senate Democrats’ pledge to fight for fairness for Oregon’s homeowners. Companion legislation cracking down on “rescue mortgage” foreclosure scams and providing straightforward information to borrowers facing default or foreclosure will be considered later in the February session.