New laws arriving in Oregon, Colorado

As the repercussions from the subprime collapse continue, more states are focusing on legislation which they feel will protect the consumer and strengthen the anemic mortgage industry in their region.

We’ve previously reported on emerging legislation in Massachusetts, Maine and Indiana. Now Oregon is joining the fray with Senate Bill 965. If passed, the new bill would ban prepayment penalties which extend beyond one year, and force lenders and brokers to adhere to national banking guidelines. It would also allow borrowers who feel they have been tied to unaffordable loans to sue the responsible lender or broker.

Colorado has also been busy creating new mortgage legislation. Governor Bill Ritter recently signed four new bills which enforce stricter licensing, training and conduct requirements on mortgage brokers. A fifth bill which requires a new annual fee from title companies to fund enhanced state monitoring was also signed.

For the most part, this new legislation should have a limited impact on legitimate mortgage brokers who operate in Oregon and/or Colorado. However, allowing consumers to sue brokers in Oregon has raised concerns with some mortgage businesses.