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OR Tightens Mortgage Regulations

OR Tightens Mortgage Regulations

Originator education required

January 22, 2007


photo of Patrick Crowley
Oregon regulators have implemented tougher originator education requirements, a mortgage industry newsletter and guidelines for dealing with borrowers seeking exotic loans.The Oregon Department of Consumer and Business Services said the changes include adopting new rules and guidelines while increasing education and enforcement efforts.

Cory Streisinger, director of the state agency, said the changes are in response to concerns raised by the industry and consumers.

“We expect these changes to help the industry stay strong while making sure borrowers are protected,” Streisinger said in a statement.

Tom Hendrickson, who sits on the board of the Oregon Association of Mortgage Professionals, said the association worked with state officials and legislators on the new regulations and is pleased with the outcome.

“We’re happy about the rules and the protections that go with it,” Hendrickson told “We worked with the state on formulating the changes … and we’re happy to see some changes in education.”

There are new education requirements and enforcement regulations designed to “prevent misleading advertising,” regulators said in the statement.

The state will also launch an “industry newsletter” to help lenders understand Oregon’s mortgage laws and rules and undertake an outreach campaign to provide consumers information about foreclosure.

Lenders now have more responsibility when it comes to supervising and monitoring their employees.

“Educating loan officers will certainly make the industry better,” said Hendrickson, who works for Associated Mortgage Group of Portland. “There’s no question … they need to understand the very basics about mortgage compliances, which is now a requirement, before taking a loan application.”

Eric Wiley, senior vice president and COO of Pacific Residential Mortgage in Lake Oswego, said the “more formal requirements will be positive for the industry.”

“Loan officers who are educated and well-informed provide better services to consumers and help the home-buying process go smoothly,” Wiley said in a statement.

The new guidelines also cover nontraditional loans, outlining best practices related to payment option and interest only loans.

Nontraditional loans appeal to borrowers who may not qualify for traditional mortgages, and they often do not understand the risks they face, David Tatman, the DFCS administrator, said in the statement.

“These guidelines will protect those borrowers by directing lenders to clearly explain the implications of the loans and evaluate the borrower’s ability to make monthly payments even when the loan rates are adjusted after a few years,” he said.

Oregon’s guidelines have been adopted by 19 states and are based on federal guidelines for “national banks and institutions”, the state said.

“This is a pure win for the consumer,” Hendrickson said.

A complete list of the new rules can be found at


Patrick Crowley is a feature journalist and blogger for He is also a reporter, blogger and columnist for The Cincinnati Enquirer.
e-mail Patrick at:

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