Chapter 1001 Oregon Laws 1999

Session Law

AN ACT

SB 1295

Relating to mortgages; creating new provisions; and amending ORS 59.925.

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

SECTION 1. ORS 59.925 is amended to read:

59.925. (1) As used in this section, "mortgage banker transaction" and "mortgage broker transaction" mean a transaction in which a person, in order to engage in the transaction, is required to be licensed as a mortgage banker or a mortgage broker under ORS 59.840 to 59.965.

[(1)] (2) A mortgage banker or mortgage broker is liable as provided in subsection [(2)] (3) of this section to any person who suffers any ascertainable loss of money or property, real or personal, in a mortgage banker transaction or a mortgage broker transaction if the mortgage banker or mortgage broker:

(a) Transacts business as a mortgage banker or mortgage broker in violation of any provision of ORS 59.840 to 59.965; or

(b) Transacts business as a mortgage banker or mortgage broker by means of an untrue statement of a material fact or an omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading, and who does not sustain the burden of proof that the person did not know, and in the exercise of reasonable care could not have known, of the untruth or omission.

[(2)] (3) The person suffering ascertainable loss may recover [all damages, including direct, indirect or consequential] damages in an amount equal to the ascertainable loss.

[(3)] (4) A person whose sole function in connection with a transaction is to provide ministerial functions of escrow, custody or deposit services in accordance with applicable law is liable only if the person participates or materially aids in the transaction and the plaintiff sustains the burden of proof that the person knew of the existence of the facts on which liability is based or that the person's failure to know of the existence of such facts was the result of the person's recklessness or gross negligence.

[(4)] (5) Except as otherwise provided in this subsection, no action or suit may be commenced under this section more than three years after the transaction. An action under this section for a violation under subsection [(1)(b)] (2)(b) of this section or ORS 59.930 may be commenced within three years after the transaction or two years after the person bringing the action discovered or should have discovered the facts on which the action is based, whichever is later, but in no event more than five years after the date of the transaction. Failure to commence an action on a timely basis is an affirmative defense.

[(5)] (6) Any person having a right of action against a mortgage banker or mortgage broker shall under this section have a right of action under the bond or irrevocable letter of credit provided in ORS 59.850.

[(6)] (7) Subsection [(3)] (4) of this section shall not limit the liability of any person:

(a) For conduct other than in the circumstances described in subsection [(3)] (4) of this section; or

(b) Under any other law.

[(7)] (8) Except as provided in subsection [(8)] (9) of this section, the court may award reasonable attorney fees to the prevailing party in an action under this section.

[(8)] (9) The court may not award attorney fees to a prevailing defendant under the provisions of subsection [(7)] (8) of this section if the action under this section is maintained as a class action pursuant to ORCP 32.

SECTION 2. The amendments to ORS 59.925 by section 1 of this 1999 Act apply only to causes of action arising on or after the effective date of this 1999 Act.

Approved by the Governor August 20, 1999

Filed in the office of the Secretary of State August 23, 1999

Effective date October 23, 1999

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