Chapter 50 Oregon Laws 1999

Session Law

AN ACT

SB 173

Relating to veterans' loans; amending ORS 407.177.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 407.177 is amended to read:

407.177. (1) When the Director of Veterans' Affairs considers such contracts necessary to improve the financial condition of the loan program conducted under this chapter, the director is authorized to enter into contracts with lending institutions under which the lending institutions may provide any of the following services:

(a) Processing of new loans and purchase contracts; and

(b) Management and servicing of new loans and purchase contracts.

(2) Contracts entered into by the director under this section may provide that the lending institution:

(a) Receive applications for loans for the acquisition of homes or farms under this chapter;

(b) Immediately investigate and process an application for a loan as provided by law; and

(c) For approved loans or contracts, if requested by the director, service the loan or purchase contract for a period of time specified by the director.

(3) When a lending institution, pursuant to a contract authorized by this section, receives an application for a loan for the acquisition of a manufactured home, as defined in ORS 197.295, the lending institution shall investigate and process the application in the manner prescribed in the contract between the lending institution and the director.

(4) When a lending institution, pursuant to a contract authorized by this section, investigates and processes a loan application that it considers eligible for approval under this chapter, the lending institution shall notify the director and state the reasons why the loan may be approved under this chapter. The director shall retain final authority to approve or disapprove the loan. If the director disapproves the loan, the director shall notify the lending institution and the applicant of the disapproval and shall indicate the reasons for the disapproval. When the director is satisfied that all requirements for approval of a loan have been met by the applicant and the lending institution and that the property offered as security for the loan protects the interests of the state, the director shall transfer to the lending institution an amount of money from the Oregon War Veterans' Fund equal to the loan amount approved by the director. The lending institution shall disburse the money in the manner prescribed by the director. The lending institution shall record the mortgage, trust deed, contract or other security agreement relating to the loan and then shall forward all the original loan documents to the director.

(5) All moneys received by a lending institution as payments on principal and interest for loans made under this chapter shall be paid to the director in accordance with the terms of the contract between the director and the lending institution.

(6) The director and lending institution shall mutually agree upon the compensation to be paid to the lending institution for services performed under a contract authorized by this section. Such compensation may be a fixed annual payment or a percentage of the amount of each loan or purchase contract processed or serviced by the lending institution under the contract.

(7) Contracts entered into under this section are exempt from the requirements of the provisions of ORS chapter 279 regarding personal service contracts.

(8) As used in this section, "lending institution" means [any banking institution, mortgage banking company, savings and loan association, credit union, national bank or federal savings and loan association maintaining an office in this state] an entity that is licensed to conduct business in the State of Oregon exclusively or in part as a mortgage lender or a conduit for mortgage loans and that, in the judgment of the director, is capable of meeting the needs of the director in carrying out this chapter.

Approved by the Governor April 19, 1999

Filed in the office of Secretary of State April 19, 1999

Effective date October 23, 1999

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