(2)(a) In any advertisement, solicitation or communication that a lender or an agent or affiliate of the lender intends as an inducement for a person to apply for or enter into a contract for a reverse mortgage, the lender or the agent or affiliate of the lender shall include a clear and conspicuous summary of the terms of the reverse mortgage. The summary must, at a minimum, disclose these provisions of the reverse mortgage loan contract to the extent that the contract includes the provision:
(A) At the conclusion of the term of the reverse mortgage loan contract, some or all of the equity in the property that is the subject of the reverse mortgage no longer belongs to the person and the person may need to sell or transfer the property to repay the proceeds of the reverse mortgage from the proceeds of the sale or transfer or the person must otherwise repay the reverse mortgage with interest from the person’s other assets.
(B) The lender will charge an origination fee, a mortgage insurance premium, closing costs or servicing fees for the reverse mortgage, all or any of which the lender will add to the balance of the reverse mortgage loan.
(C) The balance of the reverse mortgage loan grows over time and the lender charges interest on the outstanding loan balance.
(D) The person retains title to the property that is the subject of the reverse mortgage until the person sells or transfers the property and is therefore responsible for paying property taxes, insurance, maintenance and related taxes. Failing to pay these amounts may cause the reverse mortgage loan to become due immediately and may subject the property to a tax lien or other encumbrance or to possible foreclosure.
(E) Interest on a reverse mortgage is not deductible from the person’s income tax return until the person repays all or part of the reverse mortgage loan.
(b) As used in paragraph (a) of this subsection:
(A) "Clear and conspicuous" means:
(i) In larger type than the surrounding text or in a type, color or font that contrasts with surrounding text of the same size or set off from surrounding text by symbols or other marks in a manner that draws attention; or
(ii) Spoken in a volume and cadence that is sufficient to enable a reasonable person to hear and understand.
(B) "Reverse mortgage" means a residential mortgage transaction in which the lender provides loan proceeds to a borrower in a lump sum or in monthly installments with the expectation that the borrower will repay the loan from the proceeds of a sale or transfer of the real property that secures the loan.
(3)(a) A lender who has a contract with a person for a reverse mortgage each year shall send a notice with the information specified in subsection (2)(a)(D) of this section to the person or to any escrow agent, title insurance company or other agent that pays property taxes from an escrow account on the person’s behalf. The lender shall send the notice to the person at the person’s last-known address or to the escrow agent, title insurance company or other agent at the address the lender has in the lender’s records for the escrow agent, title insurance company or other agent. The lender shall send the notice at least 60 calendar days before property taxes are due for the property that is subject to the reverse mortgage.
(b) Paragraph (a) of this subsection does not apply to a contract for a reverse mortgage that includes a reserve account for taxes.
(4) Subsections (2) and (3) of this section do not apply to a financial institution, as defined in ORS 706.008, or to a licensee, as defined in ORS 725.010. [2012 c.13 §1; 2015 c.87 §1; 2017 c.161 §1]
Note: 86A.196 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 86A or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.
Structure 2021 Oregon Revised Statutes
Volume : 02 - Business Organizations, Commercial Code
Chapter 086A - Mortgage Lending
Section 86A.100 - Definitions.
Section 86A.112 - Licensees to keep records; inspection; filing financial reports; rules.
Section 86A.115 - Grounds for denying, suspending, conditioning or revoking license.
Section 86A.121 - Cancellation of license or application; application to surrender license.
Section 86A.127 - Investigations; publicity with respect to violations; cease and desist order.
Section 86A.136 - Rules; financial statements.
Section 86A.139 - Notice of orders; hearings on orders.
Section 86A.142 - Judicial review of orders.
Section 86A.145 - Oaths and subpoenas in proceedings before director.
Section 86A.148 - Copies of documents; fees; rules; effect of certification.
Section 86A.154 - Fraud and deceit with respect to mortgage banker or mortgage broker business.
Section 86A.157 - Clients’ Trust Account; examination; deposit of funds; interest; rules.
Section 86A.160 - Notice to bank regarding Clients’ Trust Account.
Section 86A.163 - Prohibited advertisements.
Section 86A.178 - Legislative findings regarding mortgage loan originators; prohibited practice.
Section 86A.186 - Mortgage loan originator criminal records checks; rules.
Section 86A.198 - Materials in languages other than English; requirements.
Section 86A.200 - Definitions.
Section 86A.209 - Interim license; findings required.
Section 86A.212 - Findings required for issuing license; basis for denial; rules.
Section 86A.215 - Education and testing requirements for license; education and test providers.
Section 86A.218 - License renewal; expiration; reinstatement; rules.
Section 86A.221 - Continuing education requirements for mortgage loan originator; credit allowed.
Section 86A.227 - Corporate surety bond required; right of action; rules.
Section 86A.236 - Prohibited activities.
Section 86A.239 - Display of license and unique identifier; rules; report of condition.
Section 86A.303 - Definitions.
Section 86A.306 - License requirement; applicability; exceptions; enforcement; rules.
Section 86A.312 - Licensee’s principal place of business; registered agent; assumed business name.
Section 86A.318 - Required notices to director; rules.
Section 86A.321 - Director’s supervisory authority; examinations; confidentiality.
Section 86A.324 - Duties of mortgage loan servicer; prohibited conduct; rules.
Section 86A.327 - Complaints; director’s power to investigate; confidentiality; exceptions.
Section 86A.330 - Violations; civil penalties; costs of investigation.
Section 86A.336 - Suspension or removal of licensee’s director or officer.
Section 86A.339 - Additional duties of mortgage loan servicer; prohibited practices.
Section 86A.990 - Criminal penalties for violations of ORS 86A.095 to 86A.198.
Section 86A.992 - Civil penalties for violations of ORS 86A.095 to 86A.198.