Req. No. 5017 Page 1 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
STATE OF OKLAHOMA
1st Session of the 58th Legislature (2021)
HOUSE BILL 2519 By: Kannady
AS INTRODUCED
An Act relating to mortgages; declaring legislative
intent; defining terms; disallowing certain actions
by lenders; requiring lenders ma ke certain
deferments; allowing lenders to make certain
adjustments and accountings; stating requirements of
certain notification; disallowing certain actions by
lenders; requiring tolling of certain time frame
during emergency period; allowing certain act ions to
resume after certain expiration; disallowing certain
court actions; requiring dismissal of certain
actions; disallowing certain sales; voiding certain
sales; providing for certain court actions; allowing
recovery of certain costs and fees; requirin g certain
timely notice; providing certain exceptions;
providing for noncodification; providing for
codification; and providing an effective date .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law not to be
codified in the Oklahoma Statutes reads as follows:
The Oklahoma Legislature finds and declares that:
1. The provisions of this act might affect the terms and
conditions of certain contracts into which resid ents of this state
have entered;
Req. No. 5017 Page 2 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
2. The effects of the provisions of this act are
inconsequential because the provisions have a limited scope and
duration and are necessary to protect the public health, safety and
welfare. For these reasons the provisions do not undermine a
contractual bargain, interfere with a party 's reasonable
expectations or prevent said party from safeguarding or reinstating
the party's rights; and
3. Even if a provision of this act has the effect of
undermining a contractual bargain, interfering wit h a party's
reasonable expectations or preventing a party from safeguarding or
reinstating the party 's rights, the provision is appropriate and
reasonable as a means by which to implement the significant and
legitimate public purpose of responding to the d eclaration of a
state of emergency issued by the Governor on March 15, 2020.
SECTION 2. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 303 of Title 46, unless there is
created a duplication in number ing, reads as follows:
A. As used in this section:
1. "Borrower" means a mortgagor of real property, a grantor
that conveys an interest in real property by a trust deed as
security for the performance of an obligation , a purchaser in a land
sale contract, a person that enters into a retail installment
contract with, or gives a security interest to, a lender for subject
property and a successor in interest to the mortgagor, grantor,
Req. No. 5017 Page 3 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
purchaser or person. For the purposes of this paragraph, "successor
in interest" means a person to whom a borrower has transferred an
interest in subject property under any of the following
circumstances:
a. the transfer occurs by devise, descent or operation of
law at the borrower's death,
b. a relative of the borrower receives the transfer as a
result of the borrower 's death,
c. the spouse or children of the borrower become owners of
the subject property,
d. the transfer results from a decree of dissolution of
marriage, a legal separation agreement or an incidental
separation agreement under which the spouse of the
borrower becomes an owner of the subject property , or
e. the transfer does not relate to rights to occupy the
subject property, but the subject property becomes
trust property in an inter vivos trust in which the
borrower remains a beneficiary;
2. "Emergency period" means a period that began on March 15,
2020, and ends when Governor 's executive orders cease to extend the
emergency;
3. "Financing agreement" means:
a. a contract under which a borrower must make payment s to
a lender to satisfy an obligation that is secured by a
Req. No. 5017 Page 4 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
mortgage, a trust deed, a land sale contract or a lien
or other security interest in subject property, and
b. a retail installment contract, which is a contract for
the sale of goods under which the buyer makes payments
periodically and the seller retains title to or a
security interest in the goods , for which the subject
matter is personal prope rty that is used as a
residence;
4. "Foreclosure avoidance measure " means an agreement between a
beneficiary and a grantor that uses one or more of the following
methods to modify an obligation that is secured by a residential
trust deed:
a. the beneficiary defers or forbears from collecting one
or more payments due on the obligation ,
b. the beneficiary modifies, temporarily, or permanently,
the payment terms or other terms of the obligation ,
c. the beneficiary accepts a deed in lieu of foreclosure
from the grantor,
d. the grantor conducts a short sale , or
e. the beneficiary provides the grantor with other
assistance that enables the gr antor to avoid a
foreclosure;
5. "Forfeiture remedy" means the nonjudicial remedy whereby
the seller cancels the contract for default, declares the
Req. No. 5017 Page 5 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
purchaser's rights under the contract to be forfeited, extinguishes
the debt and retains sums previously pa id thereunder by the buyer;
6. "Lender" means:
a. a beneficiary designated in a trust deed as the person
for whose benefit a trust deed is given, or the
person's successor in interest, and who is not the
trustee unless the ben eficiary is qualified to be a
trustee under the laws of this state,
b. a trustee, other than the beneficiary, to whom a trust
deed conveys an interest in real property, or the
person's successor in interest, or an employee of the
beneficiary, if the employ ee is qualified to be a
trustee under the laws of this state,
c. a mortgagee whose name and address appear as
mortgagee, beneficiary or assignee in a mortgage of
record or a trust deed of record that is recorded with
the county clerk of the county within w hich the
property or improvement is located and that has a
valid subsisting mortgage of record or trust deed of
record that secures a loan u pon land or upon an
improvement,
d. a seller in a land sale contract ,
Req. No. 5017 Page 6 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
e. a licensee that has applied for and obtaine d or
renewed a license to engage in business as a
residential mortgage loan servicer in this stat , or
f. a retail seller engaged in the business of selling
goods or services to retail buyers in a retail
installment contract for subject property or an agent ,
affiliate or employee of a beneficiary, trustee,
mortgagee, seller, retail seller or licensee;
7. "Subject property" means:
a. real property located in this state, and
b. personal property that is used as a resi dence in this
state; and
8. "Trust deed" means a deed executed in conformity with the
laws of this state that conveys an interest in real property to a
trustee in trust to secure the performance of an obligation the
grantor or other person named in the deed owes to a beneficiary.
B. 1. During the emergency period, a lender may not treat as
a default a borrower 's failure to make a periodic installment
payment or to pay any other amount that is due to the lender on or
in connection with an obligation that is subject to a financing
agreement if at any time during the emergency period the borrower
notifies the lender that the borrower will not be able to make the
periodic installment payment. In lieu of treating the failure to
pay as a default, and only if the lender and borrower do not
Req. No. 5017 Page 7 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
otherwise agree to modify, defer or otherwise mitigate a loan,
including by agreeing to a foreclosure avoidance measure in
accordance with the laws of this state, the lender shall:
a. defer from collecting the periodic installment payment
during the emergency period , and
b. permit the borrower to pay an amount the borrower owes
to the lender as a result of a deferral under this
subsection at the scheduled or anticipated date on
which full performance of the obligation is due.
2. After an escrow analysis and in accorda nce with the Real
Estate Settlement Procedures Act (12 U.S.C. 2601 et seq.), a lender
may adjust the amount of any escrow impound payment the borrower has
an obligation to make under the financing agreement and may take
into account any shortage or deficie ncy that results from deferring
payments under this subsection.
3. A borrower does not need to provide a notification to a
lender under paragraph 1 of this subsection more than once. If the
subject property is a residence with four or fewer dwelling unit s,
the notification must attest that the borrower 's failure to pay is a
result of a loss of income related to the COVID -19 pandemic. If the
subject property is commercial property or residential property with
more than four dwelling units, the notificatio n must include
financial statements or other evidence that demonstrates a loss of
income related to the COVID -19 pandemic and must disclose any funds
Req. No. 5017 Page 8 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
the borrower received from the United States Small Business
Administration under the Paycheck Protection P rogram, as implemented
under the Paycheck Protection Program Flexibility Act of 2020 (P.L.
116-142) or other state or federal relief programs.
4. A lender may not, with respect to a financing agreement
that is subject to paragraph 1 or 2 of this subsectio n:
a. impose or collect charges, fees, penalties, attorney
fees or other amounts that, but for the provisions of
this section, the lender might have imposed or
collected from a borrower for failing, during the
emergency period, to make a periodic installme nt
payment or pay another amount due on or in connection
with the borrower's obligation,
b. impose a default rate of interest that, but for the
provisions of this section, the lender might have
imposed or collected from a borrower for failing,
during the emergency period, to make a periodic
installment payment or pay another amount due on or in
connection with the borrower 's obligation,
c. treat in any manner the borrower 's failure during the
emergency period to make a periodic installment
payment or pay another amount due on or in connection
with the obligation as an ineligibility for a
foreclosure avoidance measure,
Req. No. 5017 Page 9 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
d. require or charge for an inspection, appraisal or a
broker opinion of value, not otherwise permitted in
the absence of a default,
e. initiate cash management not already in existence
before the effective date of this act,
f. implement lockbox procedures not already in existence
before the effective date of this act,
g. take control of the operating revenue from real
property secured by the fi nancing document unless the
control was established before the effective date of
this act, or
h. declare a default based on the failure of a borrower
to meet financial covenants due to inadequate
operating revenue resulting from the COVID -19
pandemic.
C. Except as provided in subsection I of this section , a
lender may not at any time during the emergency period:
1. Foreclose a trust deed by advertisement and sale ;
2. Bring an action or suit to foreclose a mortgage or trust
deed or to enforce an obligatio n under a retail installment contract
for subject property ;
3. Enforce a forfeiture remedy; or
Req. No. 5017 Page 10 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
4. Bring an action or suit to foreclose a lien or other
security interest on, or petition for an order of foreclosure by
advertisement and sale of, subject pro perty.
D. Except as provided in subsection I of this section , if a
lender initiated a foreclosure with respect to subject property
before the effective date of this act, the period of time that must
elapse between the time a lender initiated the foreclosu re and the
time at which a trustee 's sale, forfeiture remedy or other
foreclosure may occur is tolled during the emergency period. After
the emergency period expires, a trustee 's sale, forfeiture remedy or
other foreclosure proceeding may continue as if u ninterrupted if the
lender complies with the provisions of such a sale under the laws of
this state.
E. Except as provided in subsection I of this section , during
the emergency period a court may not enter a judgment of foreclosure
and sale or issue a wri t of execution with respect to subject
property. A court shall dismiss without prejudice any action or
suit commenced during the emergency period to foreclose a lien upon
subject property.
F. 1. Except as provided in subsection I of this section , a
trustee's sale may not occur during the emergency period. Any
purported trustee's sale during the emergency period is void and
does not transfer or foreclose any rights to subject property.
Req. No. 5017 Page 11 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
2. Except as provided in subsection I of this section , an
execution sale of subject property may not occur during the
emergency period. Any purported execution sale of subject property
during the emergency period is void and does not transfer or
foreclose any rights to the subject property.
G. A borrower that suffers an ascertainable loss of money or
property because a lender took an action prohibited under subsection
B of this section may bring an action in the appropriate county
court of this state to recover the borrower 's actual damages. A
borrower who prevails in th e action may also recover the borrower 's
court costs and attorney fees.
H. Within sixty (60) days following the effective date of this
act, each lender authorized to do business in this state must
provide written notice by mail to all of the lender 's borrowers of a
borrower's rights for accommodation under this section.
I. This section does not:
1. Apply to judgments of foreclosure and sale, writs of
execution or notices of a trustee 's sale that:
a. were issued or given before the emergency period
began,
b. occur in connection with a tax foreclosure proceeding
under the laws of this state, or
c. occur after a person has recorded a notice of intent
to abandon real property or a judicial order that
Req. No. 5017 Page 12 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
authorizes an abandonment of real property under the
laws of this state; or
2. Relieve a borrower of the duty to repay the full amount of
any obligation that is subject to a waiver, deferral, modification
or forbearance under the provisions of this section.
SECTION 3. This act shall become effect ive November 1, 2021.
58-1-5017 JBH 12/08/20