(1) A savings association may invest any percentage of its assets in loans secured by mortgages or real estate contracts on interests in real property. Investments made by an association under this section shall be made in accordance with sound lending practices and the rules adopted by the Director of the Department of Consumer and Business Services to carry out this section.
(2) A loan on the security of a mortgage shall not exceed 100 percent of the appraised value of the security. The term of a straight loan shall not exceed five years.
(3) If a loan is secured by a mortgage which is junior to prior mortgages or liens, the sum of the loan amount and the amount unpaid upon prior encumbrances, excluding taxes not due, shall not exceed the applicable limitations of this chapter.
(4) If a loan is secured by a leasehold interest, the loan shall provide that:
(a) The loan will be completely paid within a period of four-fifths of the term of the leasehold; and
(b) The association is entitled to be subrogated to all rights of the lessee under the leasehold.
(5) A mortgage shall not be subject to any prior mortgage, liens or encumbrances against the property unless the aggregate amount of such mortgage and any prior mortgage, liens and encumbrances does not exceed 100 percent of the appraised value of the property.
(6) An association may invest in real estate contracts if the principal amount due under the contract does not exceed 100 percent of the appraised value of the property and the association holds or acquires the title to the property covered by the contract.
(7) Unless the excess is guaranteed or insured, or an excess reserve is established, as provided by ORS 722.326, an association shall not:
(a) Make a loan upon the security of an interest in real property in excess of 90 percent of the appraised value thereof; or
(b) Invest in a real estate contract having a balance due in excess of 90 percent of the appraised value of the property.
(8) An association may renew or extend a loan made or contract purchased under this section if, as renewed or extended, the loan or contract complies with the limitations and conditions provided under this section at the time of the renewal or extension.
(9) As used in this section:
(a) “Mortgage” includes a first or second mortgage, a trust deed or a first lien on a leasehold.
(b) “Prior liens and encumbrances” does not include:
(A) A lease, in case the loan is secured by a mortgage on an interest, other than a leasehold interest, in real property.
(B) A sublease, in case the loan is secured by a mortgage on a leasehold interest. [1975 c.582 §97; 1979 c.863 §8]
Section: Previous 722.309 722.310 722.311 722.312 722.314 722.315 722.320 722.322 722.324 722.325 722.326 722.328 722.330 722.332 722.334 NextLast modified: August 7, 2008