§ 407.177 — Loan processing and servicing contracts with lending institutions; terms; procedures

Oregon § 407.177

• Jurisdiction: Oregon
• Vol.: 10
• Title 33: Privileges and Benefits of Veterans and Service Personnel
• Ch. 407: Veterans Loans

Text

(1) When the Department of Veterans’ Affairs considers such contracts necessary to improve the financial condition of the loan program conducted under this chapter, the department 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 department 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 department, service the loan or purchase contract for a period of time specified by the department.
(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, the lending institution shall investigate and process the application in the manner prescribed in the contract between the lending institution and the department.
(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 department and state the reasons why the loan may be approved under this chapter. The department shall retain final authority to approve or disapprove the loan. If the department disapproves the loan, the department shall notify the lending institution and the applicant of the disapproval and shall indicate the reasons for the disapproval. When the department 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 department shall transfer to the lending institution an amount from the Oregon War Veterans’ Fund equal to the loan amount approved by the department. The lending institution shall disburse the amount in the manner prescribed by the department. The lending institution shall record the mortgage or trust deed and then shall forward all the original loan documents to the department.
(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 department in accordance with the terms of the contract between the department and the lending institution.
(6) The department 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 279.835 to 279.855 and ORS chapters 279A, 279B and 279C regarding personal services contracts.
(8) As used in this section, “lending institution” means 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 department, is capable of meeting the needs of the department in carrying out this chapter.

Legislative History

1989 c.746 §2; 1993 c.35 §1; 1995 c.238 §4; 1997 c.802 §18; 1999 c.50 §1; 2003 c.794 §273; 2005 c.625 §§25,26; 2019 c.223 §19