Oregon Gov. Kate Brown issued Executive Order 20-37 today extending the emergency period under HB 4204 through December 31, 2020. The emergency period previously ran from March 8th through September 30. HB 4204 imposes mortgage payment forbearance requirements and foreclosure moratorium on all real property loans.

Today's extension of the emergency period raises questions about ongoing notification of rights to accommodations required to be sent by each lender to all borrowers within 60 days of the effective date (June 30th) making the deadline two days ago (August 29th). Most conforming first lien loans have first payment due date the first day of the month after the month in which the loan closed. Before the extension, that had the effect of mooting notice for loans closed after the notice deadline, because the first payments were not due until October 1st and the emergency period tentatively expired September 30. However, with the extension, loans originated after the notice deadline will have payments subject to the law.

The law is arguably silent with respect to future loan originations because it requires notice after 60 days of taking affect without addressing future borrowers. However, it does say each lender must provide notice to all borrowers. A court could rule either way, holding that future borrowers would have sufficient notice by the law being in place for a longer period of time, or that the intent was for all borrowers to receive notice. Residential mortgage regulators could also view failure to provide notice as an unfair, deceptive, or abusive practice, though that would be an aggressive policy stance. Oregon's Department of Consumer and Business Services, Division of Financial Regulation, published guidance related to HB 4204 earlier this month. However, it did not address whether it expected lenders to provide notice to borrowers for loans made after the 60 day notice deadline. The state has not filed an answer yet, in the complaint filed by the Oregon Bankers Association challenging the constitutionality of HB 4204 and arguing preemption for banks. The action was filed in federal court seeking declaratory and injunctive relief from HB 4204's notice and forbearance provisions, but does not challenge the foreclosure moratorium provisions.