Or. Admin. Code § 441-880-0008 - Criteria for Determining if Nonprofit Organization is Bona Fide
As required by 12 C.F.R. § 1008.103(e)(7)(ii), a bona fide nonprofit organization is an organization that meets all of the following criteria:
(1) The nonprofit
organization has been granted a tax-exempt status under section
501(c)(3) of the
Internal Revenue Code of 1986,
26 U.S.C. §
501 (c)(3).
(2) The nonprofit organization promotes
affordable housing, provides homeownership education, or provides similar
services.
(3) The nonprofit
organization conducts its activities in a manner that serves public or
charitable purposes.
(a) The director may
consider the following activities conclusive when making a determination under
this section:
(A) Making loans for the
purpose of providing assistance for downpayments, closing costs, or other home
purchase subsidies;
(B) Making loans
for the purpose of funding housing rehabilitation projects;
(C) Making loans for the purpose of providing
energy efficiency assistance; or
(D) Making loans for the purpose of avoiding
or preventing foreclosure.
(b) For purposes of this section,
organizations that engage in the brokering of mortgage loans in a manner that
would require a license under ORS
86A.100(5) will
not be considered to have conclusively met the presumption in subsection
(a).
(4) The nonprofit
organization charges no more in fees than is necessary to support the
organization's loan origination program activities. The director may consider
recordation fees, application fees and housing counseling fees that together do
not exceed one percent of the principal of loan as conclusive when making a
determination under this section.
(5) The nonprofit organization compensates
its employees in a manner that does not incentivize employees to act other than
in the best interests of the borrower. For purposes of this section,
compensation based on loan volume, loan terms, or other measures of performance
will not be considered to have conclusively met the presumption that the
nonprofit organization compensates employees in a manner that does not
incentivize employees to act other than in the best interests of the
borrower.
(6) The nonprofit
organization provides for the borrower residential mortgage loans that are
consistent with loan origination in a public or charitable context, that
contain terms in the best interest of the borrower, and that are comparable to
mortgage loans and housing assistance provided under government housing
assistance programs. The director may consider any one of the following loan
terms conclusive when making a determination that a loan is made in the best
interest of the borrower:
(a) Loan terms that
do not charge a recipient for the accrual of interest;
(b) Loan terms that charge interest at below
market rates;
(c) Loan terms that
require a borrower to qualify for the loan by the contribution of sweat
equity;
(d) Loan terms that forgive
repayment in whole or in part, whether over a period of time, on a specified
date, or subject to ownership or occupancy conditions; or
(e) Loan terms that defer repayment for a
minimum amount of time, until the residential dwelling is sold, or until the
recipient no longer occupies the residential dwelling. This subsection does not
apply to home equity conversion mortgages, commonly known as reverse
mortgages.
(f) A loan whose terms
restrict the use of the property by the borrower to the borrower's principal
residence shall not be deemed to be a term that is unfavorable to the borrower
so long as the loan otherwise qualifies under subsections (a) through (e) of
this rule.
(7) The
nonprofit organization requires or provides to employees subject to
441-880-0006 training on state
and federal fair lending laws and consumer protection laws that are relevant to
the loan origination services that the nonprofit organization provides to its
borrowers. The director may consider training in one or more of the following
laws directly related to the nonprofit organization's loan origination
activities conclusive when making a determination under this section:
(a) The Equal Credit Opportunity Act,
15 U.S.C. §
1601 et seq. and Regulation B, 12 C.F.R. Part
1002.
(d) The Home Ownership and
Equity Protection Act, 15
U.S.C. §
1639 et seq.
(e) The Home Mortgage Disclosure Act,
12 U.S.C. §
2801 et seq. and Regulation C, 12 C.F.R. Part
1003.
(f) The Real Estate
Settlement Procedures Act, 12 U.S.C. §
2601 et seq. and
regulations implementing the Act, 12 C.F.R. Part 1024.
(g) The Fair Debt Collection Practices Act,
15 U.S.C. §
1692 et seq. and Regulation F, 12 C.F.R. Part
1006.
(8) The nonprofit organization requires a
state criminal records check of each individual employed by the nonprofit
organization to engage, in whole or in part, in loan origination
activities.
(9) The nonprofit
organization requires or provides continuing education on state and federal
fair lending laws and consumer protection laws referenced under section (8) of
this rule that are relevant to the loan origination services that the nonprofit
organization provides to its borrowers.
(10) The nonprofit organization implements
and administers a complaint process that, at a minimum, provides a process for
receiving complaints from borrowers and creates a record of the resolution of
the complaint, if any.
Notes
Stat. Auth.: ORS 86A.242
Stat. Implemented: ORS 86A.203
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