OAR 441-910-0135: Loan Modifications

(1) A person registered as a debt management service provider may modify or offer to modify the terms and conditions of a consumer’s existing loan or obligation as described in ORS 697.602 if the modification meets all the following conditions: (a) The existing loan or obligation is in default, is in imminent danger of default, or there is an objectively reasonable basis to believe that the loan or obligation will default; (b) The borrower is not required to pay fees normally assessed for a new loan or obligation to receive the modification; and (c) The contract or agreement makes or is anticipated to make permanent or long-term changes to the principal, interest, length of the loan or obligation, or other key terms of the existing loan or obligation. (2) A debt management service provider meeting the requirements of section (1) of this rule may charge the fees allowed under ORS 697.692. (3) Section (1) of this rule shall not be construed to allow a debt management service provider to make or offer to make a new loan or obligation, including residential mortgage loans. (4) Notwithstanding section (3) of this rule, a mortgage loan originator regulated by the director under applicable law may modify or offer to modify the terms and conditions of an existing residential mortgage loan without a registration as a debt management service provider. (5) The term “modifying or offering to modify terms and conditions of an existing loan or obligation” does not include an individual who negotiates with a consumer to modify a loan if: (a) The individual is either an employee or has contracted to represent a lender or loan servicer; (b) The loan modification activity is within the scope of the individual’s responsibilities for the lender or loan servicer; and (c) The individual receives no direct compensation from the consumer for the individual’s services.