Oregon law requires that when there is a “promissory note, loan agreement or other agreement that provides for advances subsequent to the date of recording of the line a credit that secures the note or agreement” the front page of the mortgage or trust deed must contain:
- “Line of credit mortgage,” “line of credit trust deed” or “line of credit instrument” either in capital letters or underscored above the body of the mortgage or trust deed;
- The maximum principal amount to be advanced pursuant to the credit agreement; and
- The term or maturity date, if any, of the credit agreement exclusive of any option to renew or extend the term or maturity date. (See Or. Rev. Stat. § 86.155).
Accordingly, Docutech is adding “Line of Credit Trust Deed” as the title, the maturity date, and changing “Consideration” to “Maximum Principal Amount” for construction, construction-to-perm, and HELOC loans. The documents that are being updated are:
- OR Deed of Trust (Cx346)
- OR Deed of Trust Second (Cx504)
- FHA OR Deed of Trust (Cx19395)
- HELOC Deed of Trust – OR (Cx1370)
Additionally, Docutech is further changing these instruments for loans that secure second home and investment properties in accordance with Or. Rev. Stat. § 86.155(2)(c), which states:
“Advances made any time after the date of recording and pursuant to a credit agreement that is not secured by a residential line of credit instrument to complete construction of previously agreed-upon improvements on the real property, whether or not the advances exceed the maximum principal amount state in the line of credit instrument under subsection (1)(b)(B) of this section provided, however, that the front page of the instrument states that the maximum principal amount to be advanced pursuant to the credit agreement may be exceed by advances to complete construction pursuant to the subsection.”
The statute defines “Residential line of credit instrument as “any line of credit instrument creating a lien on real property upon which are situated or will be constructed four or fewer residential units, one of which, at the time the credit agreement is entered into, is the borrower’s residence or is intended, following construction, to be a residence of the borrower.” Because the disclosure required by subsection (2)(c) only applies to credit instruments that are not “residential” line of credit instruments, only construction, construction-to-perm, and HELOC instruments securing second home or investment properties will have the following statement added to the first page: “The maximum principal amount to be advanced pursuant to the credit agreement may be exceeded by advances to complete construction.”
These changes will be in effect on May 31, 2017. If you have any questions or concerns about these changers, please contact Client Support at 1.800.497.3584.
DR 229436