Current through Register Vol. 63, No. 9, September 1, 2024
(1) Creation of
Classification. A classification of "mortgage broker offering" is
created.
(2) Optional Mechanisms
for Registration. An applicant for registration of a mortgage broker offering
may elect to register the offering under this rule in lieu of following the
full registration procedure by:
(a) The
filing of a generic registration covering a series of offerings; and
(b) The filing of a specific offering for a
specified security which incorporates by reference documents filed under
subsection (a) of this section.
(3) Registration Procedure:
(a) All registrations shall be filed on forms
provided by the Director;
(b) The
registrant shall file, along with the registration form, two copies of the
proposed offering documents;
(c)
The registration, when granted, will be effective for one year from the date of
registration;
(d) If any material
changes are made or occur concerning the offering, these changes must be filed
with the Director, and an amendment of the registration order must be obtained
before further sales are made; and
(e) The registrant must file with the
Director all advertising materials before they are used.
(4) Retention of Documents. Documents,
including specific offering materials and records, concerning purchasers and
investors must be kept by the registrant for whichever of the following periods
is longest:
(a) Four years from the date of
sale;
(b) As long as the
registrant, or principals of the registrant remain obligated to make payments
or deliver documents on loan transactions; or
(c) As long as the registrant is obligated to
provide servicing in connection with the transaction.
(5) Use of Legend. The offering document used
in connection with a registered mortgage broker offering shall contain the
following legend set out in a prominent place in the document:
"This offering has been registered with the Director of
the Department of Consumer and Business Services of the State of Oregon as a
mortgage broker offering under the provision of OAR
441-065-0260.
Registration does not constitute an endorsement or
recommendation by the Director. It is not a representation that the Director
has passed upon or reviewed the accuracy or values claimed. Any representation
to the contrary is a criminal offense."
(6) Limitations on the Use of the Generic
Registration Procedure:
(a) The following
types of securities cannot be offered or sold under a generic registration of
securities unless written permission is obtained from the Director based upon a
showing that the investors are adequately protected:
(A) Construction loans and loans exceeding 90
percent of the property and improvements that are in place. Offerings involving
construction loans and loans exceeding 90 percent of the value of the property
including existing improvements may not be sold as part of a generic
registration. These have to be registered separately. An offering exceeds 90
percent of the value of the property and existing improvements if the principal
amount of the note secured by a mortgage or trust deed or land sale contract
together with the unpaid principal amount of any encumbrances on the property,
plus unpaid interest to date of the transaction, exceeds 90 percent of the
reasonable market value of the real property including improvements;
(B) Principal Transaction. Offerings
involving the broker, its officers, agents, affiliates, and persons controlling
the broker or affiliates may not be sold as part of a generic registration
unless the registration with the Director includes a full description of these
transactions. An offering "involves" the persons listed where the person is the
owner, the borrower, or has an interest in the proceeds other than fees,
commissions, or mark-ups;
(C)
Offerings involving documents reserving the right to subordinate the investor's
position. Offerings involving real estate paper which reserve the right to
subordinate the position of any investor to any mortgage, trust deed or lien
created at or after the sale may not be sold under a generic
registration;
(D) Offerings to more
than ten persons. Offerings involving pooling or participations involving more
than ten investors may not be sold under a generic registration. However, where
only first liens are involved, the registrant may apply for a modification to
allow sales up to 25.
(b) A registrant requesting a modification
under this section must request it in writing and must provide satisfactory
evidence that the interest of the public will be adequately
protected.
Stat. Auth.: ORS
59
Stats. Implemented: ORS
59.065
