Oregon administrative law sets forth specific requirements concerning lock-in agreements, as follows:
“For residential mortgage transactions . . . a mortgage banker that does not fund a loan or mortgage broker that does not fund a loan must prepare and maintain the following:
(c) In the case of residential or single family loans, a borrower acknowledged statement that a loan interest rate will float or a copy of the executed lock agreement. The lock agreement shall specify at a minimum the: date of the agreement; file identification, and property address; lock-in rate; lock expiration date; disclosure that the lock may be subject to change if any of the loan factors change; and disclosure that if the lock expires, the rate and points are subject to change; and the term of the loan.” (Or. Admin. R. 441-865-0060)
“A dishonest, fraudulent or illegal practice or conduct under Or. Rev. Stat. §59.865 includes, but is not limited to, the following conduct by a person in connection with a mortgage loan:
(2) Entering into a lock agreement for a specific interest rate or advertising the availability of a lock agreement for a specific interest rate unless:
(a) The agreement of advertisement also specifies the terms of the lock agreement including the length of the lock period and the costs to the borrower associated with the lock agreement; and
(b) The mortgage banker or mortgage broker can demonstrate that they have successfully closed loans under lock agreements, which provided for similar interest rates within similar time frames.” (Ibid. 441-870-0030)
To comply with these requirements, DocuTech has been providing the current version CX4297 (OR Float or Lock Agreement) to its clients as a generick lock-in agreement. During a recent review of Oregon’s disclosures, it was discovered that the Oregon Division of Finance and Corporate Securities provides a model lock-in agreement that can be used to comply with Oregon’s laws (see http://www.cbs.state.or.us/external/dfcs/forms.html#mortgage; under the “Mortgage Lenders” section, “Interest Rate Lock/Float Agreement 440-4828).
DocuTech holds a policy of providing disclosures that, where applicable, mirror model forms that are provided by state governments, in order to ensure the strictest and most secure compliance with state laws. Pursuant to this policy, DocuTech will be revising Cx4297 to match the model form provided by the Oregon government.
This change will take effect on Friday, September 16th, 2011.