74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
 
NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .
 
LC 3073
 
                         House Bill 3474
 
Sponsored by Representative KOTEK; Representatives BARKER,
  BARNHART, BONAMICI, BOONE, CANNON, CLEM, GILLIAM, ROSENBAUM,
  SHIELDS, WITT (at the request of Mike Fahey)
 
 
                             SUMMARY
 
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
 
  Requires mortgage or trust deed lender to prorate prepayment
privilege penalty for prepayments made after first year of loan
agreement.
 
                        A BILL FOR AN ACT
Relating to prepayment privilege penalties; creating new
  provisions; and amending ORS 86.150.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 86.150 is amended to read:
  86.150. (1) Any person making a loan having a loan period of
more than three years secured by a mortgage or by a trust deed on
real property located in this state shall, with respect to such
loan, expressly and clearly state on the loan agreement and
promissory note any maximum prepayment privilege penalty. The
statement shall include the maximum prepayment  { + privilege + }
penalty applicable for prepayment during the first year of the
loan period and for each year thereafter. { +  After the first
year of the loan agreement, the lender shall prorate the
prepayment privilege penalty by multiplying the maximum
prepayment privilege penalty under the loan by the percentage of
the original loan period remaining at the time of the
prepayment. + }
  (2) Violation of subsection (1) of this section with respect to
a loan agreement or promissory note shall render any prepayment
privilege penalty provision in the agreement void.
  (3) 'Loan agreement' as used in this section means a written
document issued in connection with a particular loan which sets
forth the terms upon which the loan will be made. 'Loan
agreement' does not include a mortgage or trust deed which
secures a promissory note. Nothing in this section shall be
deemed to require a lender to issue a loan agreement.
  (4) This section does not apply to any loan agreement executed
on or before September 13, 1967, or any loan not primarily for
personal, family or household use.
  SECTION 2.  { + The amendments to ORS 86.150 by section 1 of
this 2007 Act apply to loan agreements entered into, extended,
refinanced or renegotiated on or after the effective date of this
2007 Act. + }
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