The Oregon Legislature introduced a bill this week that would prohibit a lender from in any way transferring a mortgage loan for half a decade after the deal closes. In addition, the lender cannot transfer servicing rights or obligations for the same time period.
As Oregon Senate Bill 663 reads, a mortgage banker, broker, or originator that makes a loan within the state "may not, for a period of five years after the closing date for the loan, sell, assign, convey or otherwise transfer the loan."
The Senate Committee on General Government, Consumer and Small Business Protection sponsored the bill. Members of the committee were not immediately available for comment on the motivation behind it.
The Oregon Association of Mortgage Professionals, which is lobbying against the proposed act, said the consequences of such a bill would be devastating to the industry as well as consumers.
"This is another bill intended to inaccurately attack non-depository lending institutions in hopes of improving quality to the consumer which if passed would drastically create the exact opposite result," the firm said.
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