Answer. Oregon law requires that unless exempted, an individual must use a "mortgage loan originator" ("MLO") [e.g. mortgage bankers or mortgage brokers] license if he/she:
- Takes a residential mortgage loan application; or
- Negotiates the terms or conditions of a residential mortgage loan.
It is the second of these two requirements that affect you as a park owner re-selling formerly abandoned homes. You must either use a MLO or be covered by an exemption. However, as you will see under the Oregon MLO laws below, the statute is not limited only to "abandoned homes" - just "previously owned homes."
The Safe Act. The federal Secure and Fair Enforcement for Mortgage Lending Act ("S.A.F.E. Act") of 2008 requires that MLOs register with the Oregon Department of Business and Consumer Services ("DCBS"). As required by the S.A.F.E. Act, all states must adopt their own set of laws governing MLOs. Oregon's version is found at ORS 86A.200 to 86A.239. The Consumer Finance Protection Bureau (CFPB"), a Dodd- Frank created mega-agency, and DCBS have taken the position that the S.A.F.E. Act applies not only to third-party loans, but also to seller-carried transactions, including manufactured homes both inside and outside of parks.
Oregon MLO Laws. An individual may not engage in business as a mortgage loan originator in Oregon without first:
- Obtaining and maintaining a MLO license; and
- Obtaining a unique identifier from the Nationwide Mortgage Licensing System and Registry ("NMLS").
Exemptions to MLO Laws:
- A registered MLO acting within the scope of their employment;
- One who offers or negotiates terms of a residential mortgage loan with or on behalf of the individual's spouse, child, sibling, parent, grandparent, grandchild or a relative in a similar relationship with the individual that is created by law, marriage or adoption;
- One who offers or negotiates terms of a residential mortgage loan that is secured by a dwelling that served as the individual's residence;
- An Oregon-licensed attorney [subject to limitations]:
- An individual licensed as a manufactured structure dealer under ORS 446.691 and who:
o Offers or negotiates terms of a residential mortgage loan related to a sale for occupancy of a previously owned manufactured dwelling in a manufactured dwelling park three (3) or fewer times in any 12- month period; and
o Uses a written sale agreement form with the purchaser that: (a) complies with the requirements of ORS 646A.050, 646A.052 and 646A.054; (b) with any applicable administrative rules; and (c) any other applicable requirements for residential mortgages for manufactured dwellings.
o Note: This exemption does not permit the individual to hold more than eight (8) residential mortgage loans at any one time.
- An individual who is licensed as a limited manufactured structure dealer, and who:
o Has an ownership interest in a manufactured dwelling park;
o Offers or negotiates terms of a residential mortgage loan related to a sale for occupancy of a previously owned manufactured dwelling in any manufactured dwelling park in which the individual has an ownership interest, five (5) or fewer times in any 12-month period; and
o Uses a written sale agreement form with the purchaser that: (a) complies with the requirements of ORS 646A.050, 646A.052 and 646A.054, (b) with any applicable administrative rules, and (c) with any other applicable requirements for residential mortgages for manufactured dwellings.
o This exemption does not permit the individual to hold more than twelve (12) residential mortgage loans at any one time.
- An employee of a licensed manufactured structure dealer is not subject to the MLO licensing requirements if the employee:
o Performs only administrative or clerical tasks; and
o Receives only a salary or commission that is customary among dealers and employees of dealers.
- An employee of a dealer may become subject to the licensing provisions if the CFPB determines, in a guideline, rule, regulation or interpretive letter that this exemption granted is inconsistent with requirements set forth in 12 U.S.C. 5101 et. seq. (S.A.F.E. Act)