The COVID-19 pandemic prompted legislatures across the country to enact emergency borrower protection measures that fundamentally altered the foreclosure landscape. Oregon was among the states that moved most aggressively, passing House Bill 4204 in June 2020 to impose sweeping temporary restrictions on lenders doing business within the state. While the emergency provisions themselves have long since expired, the legislative framework they established continues to influence Oregon’s approach to borrower protection and lender compliance obligations.
This article examines the key provisions of Oregon HB 4204, its lasting impact on the state’s foreclosure regulatory environment, and what private lenders operating in Oregon should understand about the broader compliance lessons this legislation imparted.
Background: Oregon HB 4204
Governor Kate Brown signed House Bill 4204 into law on June 30, 2020, during the height of the pandemic’s first wave. The legislation represented one of the most comprehensive state-level borrower protection packages enacted during that period, imposing obligations that went well beyond the federal CARES Act’s mortgage forbearance provisions.
The law’s emergency measures initially applied to the period from March 8 through September 30, 2020, with authority granted to the Governor to extend the timeline as circumstances warranted.
Core Provisions of the Legislation
Mandatory Payment Deferral
HB 4204 required lenders to offer payment deferral options to borrowers who demonstrated financial hardship resulting from the pandemic. Unlike voluntary forbearance programs, this was a mandatory obligation, meaning lenders could not refuse deferral requests from qualifying borrowers regardless of the loan terms or the lender’s own financial position.
Prohibition on Default Enforcement Actions
During the covered period, the law prohibited lenders from initiating or advancing default-related actions against borrowers who had requested or received pandemic-related accommodations. This included restrictions on assessing late fees, reporting negative credit information, and accelerating loan balances based on payment deficiencies that arose during the covered period.
Foreclosure Moratorium
The legislation imposed a blanket moratorium on both judicial and non-judicial foreclosure proceedings for the duration of the emergency period. Lenders were prohibited from recording notices of default, scheduling trustee’s sales, or pursuing judicial foreclosure complaints during the moratorium window.
Mandatory Borrower Notification
One of the most operationally significant requirements was the law’s notification mandate. All lenders authorized to conduct business in Oregon were required to provide written notice to every active borrower by August 30, 2020, informing them of the protections available under the new law. This notice had to be sent by mail, and compliance with this requirement was treated as a strict obligation regardless of whether the borrower had experienced any financial hardship.
Lasting Regulatory Impact
Although HB 4204’s emergency provisions have expired, the legislation established several precedents that continue to shape Oregon’s regulatory posture toward mortgage lending:
Heightened Borrower Communication Standards
The mandatory notification requirement set a baseline expectation that lenders proactively inform borrowers of their rights during periods of economic disruption. Oregon regulators have continued to emphasize borrower communication obligations in subsequent guidance, and lenders operating in the state should maintain robust notification procedures.
Expanded Loss Mitigation Expectations
The pandemic-era requirement for mandatory payment deferrals reinforced the expectation that lenders exhaust loss mitigation alternatives before pursuing foreclosure. Oregon’s regulatory framework increasingly treats pre-foreclosure outreach and workout discussions as prerequisites rather than courtesies.
Compliance Documentation Requirements
The detailed compliance obligations under HB 4204, including proof of borrower notification, deferral request processing, and moratorium adherence, established a documentation standard that lenders should maintain for all Oregon lending activities. Regulators expect clear audit trails demonstrating compliance with both current and historical borrower protection requirements.
What Private Lenders Should Know in 2025
For private lenders originating or acquiring loans secured by Oregon property, the pandemic-era legislation offers several important takeaways:
State-Specific Compliance Is Non-Negotiable
Oregon demonstrated its willingness to impose requirements that exceeded federal standards. Private lenders cannot assume that compliance with federal mortgage servicing rules satisfies their Oregon-specific obligations. Each state where a lender operates may impose distinct requirements for borrower communication, loss mitigation, and foreclosure procedures.
Proactive Compliance Programs Reduce Risk
Lenders who had established compliance infrastructure before HB 4204 took effect were able to respond to the new requirements far more efficiently than those scrambling to build processes from scratch. Maintaining adaptable compliance frameworks that can accommodate new legislative mandates is essential for lenders with multi-state portfolios.
Borrower Communication Is a Regulatory Priority
Oregon regulators have consistently signaled that transparent, proactive borrower communication is a core expectation. Lenders should maintain current contact information for all borrowers, establish templates for regulatory-mandated notices, and implement tracking systems to document when and how required communications are delivered.
Monitor Legislative Developments
Oregon’s legislature has shown a pattern of enacting borrower-friendly legislation, and private lenders should actively monitor proposed bills that could affect their servicing and foreclosure practices. Engaging with industry associations and legal counsel who track state-level regulatory changes is a cost-effective way to stay ahead of compliance obligations.
Building a Resilient Oregon Lending Program
The pandemic-era experience underscored the importance of building lending programs with regulatory flexibility built into their operational DNA. For lenders active in Oregon, this means:
- Maintaining current awareness of Oregon Revised Statutes governing foreclosure, particularly ORS Chapter 86 (trust deeds) and ORS Chapter 88 (judicial foreclosure)
- Implementing scalable notification systems capable of delivering mandatory borrower communications within compressed timelines
- Documenting all loss mitigation interactions with borrowers in a manner sufficient to demonstrate regulatory compliance
- Working with experienced legal counsel who understand Oregon’s specific procedural requirements and can advise on compliance strategies
Geraci LLP assists private lenders in navigating the complex and evolving regulatory landscape across all 50 states, including Oregon’s borrower protection and foreclosure compliance requirements. For questions about your Oregon lending operations, contact us at (949) 403-3488 or visit 90 Discovery, Irvine, CA 92618.
