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28	28	STATE OF OKLAHOMA
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30	30	1st Session of the 58th Legislature (2021)
31	31
32	32	HOUSE BILL 2519 By: Kannady
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38	38	AS INTRODUCED
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40	40	An Act relating to mortgages; declaring legislative
41	41	intent; defining terms; disallowing certain actions
42	42	by lenders; requiring lenders ma ke certain
43	43	deferments; allowing lenders to make certain
44	44	adjustments and accountings; stating requirements of
45	45	certain notification; disallowing certain actions by
46	46	lenders; requiring tolling of certain time frame
47	47	during emergency period; allowing certain act ions to
48	48	resume after certain expiration; disallowing certain
49	49	court actions; requiring dismissal of certain
50	50	actions; disallowing certain sales; voiding certain
51	51	sales; providing for certain court actions; allowing
52	52	recovery of certain costs and fees; requirin g certain
53	53	timely notice; providing certain exceptions;
54	54	providing for noncodification; providing for
55	55	codification; and providing an effective date .
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60	60	BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
61	61	SECTION 1. NEW LAW A new section of law not to be
62	62	codified in the Oklahoma Statutes reads as follows:
63	63	The Oklahoma Legislature finds and declares that:
64	64	1. The provisions of this act might affect the terms and
65	65	conditions of certain contracts into which resid ents of this state
66	66	have entered;
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93	93	2. The effects of the provisions of this act are
94	94	inconsequential because the provisions have a limited scope and
95	95	duration and are necessary to protect the public health, safety and
96	96	welfare. For these reasons the provisions do not undermine a
97	97	contractual bargain, interfere with a party 's reasonable
98	98	expectations or prevent said party from safeguarding or reinstating
99	99	the party's rights; and
100	100	3. Even if a provision of this act has the effect of
101	101	undermining a contractual bargain, interfering wit h a party's
102	102	reasonable expectations or preventing a party from safeguarding or
103	103	reinstating the party 's rights, the provision is appropriate and
104	104	reasonable as a means by which to implement the significant and
105	105	legitimate public purpose of responding to the d eclaration of a
106	106	state of emergency issued by the Governor on March 15, 2020.
107	107	SECTION 2. NEW LAW A new section of law to be codified
108	108	in the Oklahoma Statutes as Section 303 of Title 46, unless there is
109	109	created a duplication in number ing, reads as follows:
110	110	A. As used in this section:
111	111	1. "Borrower" means a mortgagor of real property, a grantor
112	112	that conveys an interest in real property by a trust deed as
113	113	security for the performance of an obligation , a purchaser in a land
114	114	sale contract, a person that enters into a retail installment
115	115	contract with, or gives a security interest to, a lender for subject
116	116	property and a successor in interest to the mortgagor, grantor,
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143	143	purchaser or person. For the purposes of this paragraph, "successor
144	144	in interest" means a person to whom a borrower has transferred an
145	145	interest in subject property under any of the following
146	146	circumstances:
147	147	a. the transfer occurs by devise, descent or operation of
148	148	law at the borrower's death,
149	149	b. a relative of the borrower receives the transfer as a
150	150	result of the borrower 's death,
151	151	c. the spouse or children of the borrower become owners of
152	152	the subject property,
153	153	d. the transfer results from a decree of dissolution of
154	154	marriage, a legal separation agreement or an incidental
155	155	separation agreement under which the spouse of the
156	156	borrower becomes an owner of the subject property , or
157	157	e. the transfer does not relate to rights to occupy the
158	158	subject property, but the subject property becomes
159	159	trust property in an inter vivos trust in which the
160	160	borrower remains a beneficiary;
161	161	2. "Emergency period" means a period that began on March 15,
162	162	2020, and ends when Governor 's executive orders cease to extend the
163	163	emergency;
164	164	3. "Financing agreement" means:
165	165	a. a contract under which a borrower must make payment s to
166	166	a lender to satisfy an obligation that is secured by a
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193	193	mortgage, a trust deed, a land sale contract or a lien
194	194	or other security interest in subject property, and
195	195	b. a retail installment contract, which is a contract for
196	196	the sale of goods under which the buyer makes payments
197	197	periodically and the seller retains title to or a
198	198	security interest in the goods , for which the subject
199	199	matter is personal prope rty that is used as a
200	200	residence;
201	201	4. "Foreclosure avoidance measure " means an agreement between a
202	202	beneficiary and a grantor that uses one or more of the following
203	203	methods to modify an obligation that is secured by a residential
204	204	trust deed:
205	205	a. the beneficiary defers or forbears from collecting one
206	206	or more payments due on the obligation ,
207	207	b. the beneficiary modifies, temporarily, or permanently,
208	208	the payment terms or other terms of the obligation ,
209	209	c. the beneficiary accepts a deed in lieu of foreclosure
210	210	from the grantor,
211	211	d. the grantor conducts a short sale , or
212	212	e. the beneficiary provides the grantor with other
213	213	assistance that enables the gr antor to avoid a
214	214	foreclosure;
215	215	5. "Forfeiture remedy" means the nonjudicial remedy whereby
216	216	the seller cancels the contract for default, declares the
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243	243	purchaser's rights under the contract to be forfeited, extinguishes
244	244	the debt and retains sums previously pa id thereunder by the buyer;
245	245	6. "Lender" means:
246	246	a. a beneficiary designated in a trust deed as the person
247	247	for whose benefit a trust deed is given, or the
248	248	person's successor in interest, and who is not the
249	249	trustee unless the ben eficiary is qualified to be a
250	250	trustee under the laws of this state,
251	251	b. a trustee, other than the beneficiary, to whom a trust
252	252	deed conveys an interest in real property, or the
253	253	person's successor in interest, or an employee of the
254	254	beneficiary, if the employ ee is qualified to be a
255	255	trustee under the laws of this state,
256	256	c. a mortgagee whose name and address appear as
257	257	mortgagee, beneficiary or assignee in a mortgage of
258	258	record or a trust deed of record that is recorded with
259	259	the county clerk of the county within w hich the
260	260	property or improvement is located and that has a
261	261	valid subsisting mortgage of record or trust deed of
262	262	record that secures a loan u pon land or upon an
263	263	improvement,
264	264	d. a seller in a land sale contract ,
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291	291	e. a licensee that has applied for and obtaine d or
292	292	renewed a license to engage in business as a
293	293	residential mortgage loan servicer in this stat , or
294	294	f. a retail seller engaged in the business of selling
295	295	goods or services to retail buyers in a retail
296	296	installment contract for subject property or an agent ,
297	297	affiliate or employee of a beneficiary, trustee,
298	298	mortgagee, seller, retail seller or licensee;
299	299	7. "Subject property" means:
300	300	a. real property located in this state, and
301	301	b. personal property that is used as a resi dence in this
302	302	state; and
303	303	8. "Trust deed" means a deed executed in conformity with the
304	304	laws of this state that conveys an interest in real property to a
305	305	trustee in trust to secure the performance of an obligation the
306	306	grantor or other person named in the deed owes to a beneficiary.
307	307	B. 1. During the emergency period, a lender may not treat as
308	308	a default a borrower 's failure to make a periodic installment
309	309	payment or to pay any other amount that is due to the lender on or
310	310	in connection with an obligation that is subject to a financing
311	311	agreement if at any time during the emergency period the borrower
312	312	notifies the lender that the borrower will not be able to make the
313	313	periodic installment payment. In lieu of treating the failure to
314	314	pay as a default, and only if the lender and borrower do not
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341	341	otherwise agree to modify, defer or otherwise mitigate a loan,
342	342	including by agreeing to a foreclosure avoidance measure in
343	343	accordance with the laws of this state, the lender shall:
344	344	a. defer from collecting the periodic installment payment
345	345	during the emergency period , and
346	346	b. permit the borrower to pay an amount the borrower owes
347	347	to the lender as a result of a deferral under this
348	348	subsection at the scheduled or anticipated date on
349	349	which full performance of the obligation is due.
350	350	2. After an escrow analysis and in accorda nce with the Real
351	351	Estate Settlement Procedures Act (12 U.S.C. 2601 et seq.), a lender
352	352	may adjust the amount of any escrow impound payment the borrower has
353	353	an obligation to make under the financing agreement and may take
354	354	into account any shortage or deficie ncy that results from deferring
355	355	payments under this subsection.
356	356	3. A borrower does not need to provide a notification to a
357	357	lender under paragraph 1 of this subsection more than once. If the
358	358	subject property is a residence with four or fewer dwelling unit s,
359	359	the notification must attest that the borrower 's failure to pay is a
360	360	result of a loss of income related to the COVID -19 pandemic. If the
361	361	subject property is commercial property or residential property with
362	362	more than four dwelling units, the notificatio n must include
363	363	financial statements or other evidence that demonstrates a loss of
364	364	income related to the COVID -19 pandemic and must disclose any funds
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391	391	the borrower received from the United States Small Business
392	392	Administration under the Paycheck Protection P rogram, as implemented
393	393	under the Paycheck Protection Program Flexibility Act of 2020 (P.L.
394	394	116-142) or other state or federal relief programs.
395	395	4. A lender may not, with respect to a financing agreement
396	396	that is subject to paragraph 1 or 2 of this subsectio n:
397	397	a. impose or collect charges, fees, penalties, attorney
398	398	fees or other amounts that, but for the provisions of
399	399	this section, the lender might have imposed or
400	400	collected from a borrower for failing, during the
401	401	emergency period, to make a periodic installme nt
402	402	payment or pay another amount due on or in connection
403	403	with the borrower's obligation,
404	404	b. impose a default rate of interest that, but for the
405	405	provisions of this section, the lender might have
406	406	imposed or collected from a borrower for failing,
407	407	during the emergency period, to make a periodic
408	408	installment payment or pay another amount due on or in
409	409	connection with the borrower 's obligation,
410	410	c. treat in any manner the borrower 's failure during the
411	411	emergency period to make a periodic installment
412	412	payment or pay another amount due on or in connection
413	413	with the obligation as an ineligibility for a
414	414	foreclosure avoidance measure,
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441	441	d. require or charge for an inspection, appraisal or a
442	442	broker opinion of value, not otherwise permitted in
443	443	the absence of a default,
444	444	e. initiate cash management not already in existence
445	445	before the effective date of this act,
446	446	f. implement lockbox procedures not already in existence
447	447	before the effective date of this act,
448	448	g. take control of the operating revenue from real
449	449	property secured by the fi nancing document unless the
450	450	control was established before the effective date of
451	451	this act, or
452	452	h. declare a default based on the failure of a borrower
453	453	to meet financial covenants due to inadequate
454	454	operating revenue resulting from the COVID -19
455	455	pandemic.
456	456	C. Except as provided in subsection I of this section , a
457	457	lender may not at any time during the emergency period:
458	458	1. Foreclose a trust deed by advertisement and sale ;
459	459	2. Bring an action or suit to foreclose a mortgage or trust
460	460	deed or to enforce an obligatio n under a retail installment contract
461	461	for subject property ;
462	462	3. Enforce a forfeiture remedy; or
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489	489	4. Bring an action or suit to foreclose a lien or other
490	490	security interest on, or petition for an order of foreclosure by
491	491	advertisement and sale of, subject pro perty.
492	492	D. Except as provided in subsection I of this section , if a
493	493	lender initiated a foreclosure with respect to subject property
494	494	before the effective date of this act, the period of time that must
495	495	elapse between the time a lender initiated the foreclosu re and the
496	496	time at which a trustee 's sale, forfeiture remedy or other
497	497	foreclosure may occur is tolled during the emergency period. After
498	498	the emergency period expires, a trustee 's sale, forfeiture remedy or
499	499	other foreclosure proceeding may continue as if u ninterrupted if the
500	500	lender complies with the provisions of such a sale under the laws of
501	501	this state.
502	502	E. Except as provided in subsection I of this section , during
503	503	the emergency period a court may not enter a judgment of foreclosure
504	504	and sale or issue a wri t of execution with respect to subject
505	505	property. A court shall dismiss without prejudice any action or
506	506	suit commenced during the emergency period to foreclose a lien upon
507	507	subject property.
508	508	F. 1. Except as provided in subsection I of this section , a
509	509	trustee's sale may not occur during the emergency period. Any
510	510	purported trustee's sale during the emergency period is void and
511	511	does not transfer or foreclose any rights to subject property.
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538	538	2. Except as provided in subsection I of this section , an
539	539	execution sale of subject property may not occur during the
540	540	emergency period. Any purported execution sale of subject property
541	541	during the emergency period is void and does not transfer or
542	542	foreclose any rights to the subject property.
543	543	G. A borrower that suffers an ascertainable loss of money or
544	544	property because a lender took an action prohibited under subsection
545	545	B of this section may bring an action in the appropriate county
546	546	court of this state to recover the borrower 's actual damages. A
547	547	borrower who prevails in th e action may also recover the borrower 's
548	548	court costs and attorney fees.
549	549	H. Within sixty (60) days following the effective date of this
550	550	act, each lender authorized to do business in this state must
551	551	provide written notice by mail to all of the lender 's borrowers of a
552	552	borrower's rights for accommodation under this section.
553	553	I. This section does not:
554	554	1. Apply to judgments of foreclosure and sale, writs of
555	555	execution or notices of a trustee 's sale that:
556	556	a. were issued or given before the emergency period
557	557	began,
558	558	b. occur in connection with a tax foreclosure proceeding
559	559	under the laws of this state, or
560	560	c. occur after a person has recorded a notice of intent
561	561	to abandon real property or a judicial order that
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588	588	authorizes an abandonment of real property under the
589	589	laws of this state; or
590	590	2. Relieve a borrower of the duty to repay the full amount of
591	591	any obligation that is subject to a waiver, deferral, modification
592	592	or forbearance under the provisions of this section.
593	593	SECTION 3. This act shall become effect ive November 1, 2021.
594	594
595	595	58-1-5017 JBH 12/08/20

Oklahoma 2022 Regular Session

Oklahoma House Bill HB2519 Compare Versions