Oregon House Republicans could give a rip if you get screwed by big banks
Carla Axtman
If you've had any local news on at all today, you probably heard about the unraveling of negotiations in Salem toward an agreement on a set of foreclosure bills.
These two bills had wide bipartisan support in the Oregon Senate. But there's too much crazy rightwing crap in the Oregon House Republican caucus to overcome, it seems.
Four foreclosure bills were introduced into the Oregon House this session. None were granted a hearing. The senate bills that made it to the House side stop dual track foreclosures, a practice in which mortgage lenders to move ahead with foreclosure even as the homeowner is trying to modify their loan. The legislation also includes actual enforcement mechanisms, bank accountability measures and requires face to face mediation. A number of other states use mediation because it gives homeowners a good shot at getting accurate information about their foreclosure-avoidance options and to hold banks and other lenders accountable. This type of mediation has been known to reduce foreclosures by as much as 50%.
After two editorials by the Oregonian and many angry emails, House Rs introduced an amendment. Sources in Salem tell me that it was essentially written by the lobbyist for the banker's association. The amendment watered down the senate bills by removing enforcement, getting rid of mandatory mediation, and expansion to community banks.
For more on this amendment stuff, read Kari's write up of that here.
In short, the House Republicans drug their feet until they had no choice, then tried to weaken the legislation to turn it into something basically worthless.
When the Dems wouldn't give in, the GOP walked away.
This is a complete and utter failure by the Oregon House Republicans. They chose big banks over Oregon homeowners. They chose big money fraud over their own citizens.
By the way Sunriver residents, you might want to get serious about sending someone else to Salem. Your current guy is tainted by the stench of having no shame whatsoever.
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6:19 p.m.
Feb 28, '12
This sure ought to get some of 'em fired in November. I sure wouldn't want to campaign as a shill for the big banks.
9:43 p.m.
Feb 28, '12
This is so predictable and so consistent. No surprise here.
10:25 p.m.
Feb 28, '12
What a bunch of jerks. Getting this message out to their constituents will be a great tool to take back the house in November.
9:51 a.m.
Feb 29, '12
Here's Lew Frederick on this:
http://www.youtube.com/watch?feature=player_embedded&v=1_N6vVMVBAM
10:01 a.m.
Feb 29, '12
What now? What can the average Oregonian do to demand fair play & transparency by the banks in their negotiations towards a foreclosure alternative? What tools do homeowners have on their side? Not very many, and unless they have a tremendous will, they will just quit and fade way.Click.
Keep standing up against the banks people...Occupy anyone??!
11:17 a.m.
Feb 29, '12
Many Oregon home owners have a huge hammer.
Oregon is a non recourse state.
Meaning that if you obtained a loan to buy your residence, and now decide that it doesn't make economic sense to keep paying, you can quit paying and save those monthly payments, live in the home until the bank forecloses then walk away after the public auction.
The bank then sells the home, and your home mortgage is completely satisfied, you owe the bank nothing.
It's often referred to as strategic default. I refer to it as exercising your legal non recourse option in your loan agreement.
There are some conditions and traps for the unwary if you decide to exercise that legal right. So, you want to have your situation reviewed by an experienced attorney.
Once people start to realize that paying $300,000 for a $200,000 asset deprives them of retirement, college savings, and the ability to support their family, it's the banks who will be asking for mandatory mediation.
I talk to maybe 5-10 people per week who are exercising their non recourse options. This is freeing up tens of thousands of dollars per month that these people can use for savings, and money that can be spent within their communities rather than sending the payments to Wells Fargo or US Bank.
And, the irony is, most of these clients would prefer to work something out with their lenders. They'd even be willing to pay more than the home is worth. But not 100,000 more.
Yet the banks would prefer to let the homeowner live free for 8-24 months, then foreclose and incur thousands more in foreclosure costs, and sell the home at 75 cents on the dollar, rather than agree to a reasonable write down in the mortgage principle.
There are a lot of reasons for this. And this post is already too long. But the bottom line is.....The banks know that in non recourse states like Oregon, in many cases, its the homeowners who have the leverage. And perhaps that's why they want no laws requiring mediation, which also would mean mediators will be likely obligated to point out the non recourse option to the homeowner and bank.
Now, I'm not advocating that everyone walk away from their home loans. Don't take that step lightly, and only consider it after talking to competent counsel. There are other options, and stopping payment will effect your credit score.
The point is however, there are legal options for homeowners, and I don't think the financial industry, or many people in government who are responsible for the economy, want us to seriously consider them. Yet, if some of these options were considered, it could convince some banks that reasonable principle write downs are wise. This could keep people in their homes, AND ironically, reduces losses for the banks.
M guess is, banks won't consider it until the losses they start to incur from strategic defaults exceed the losses they'd incur from principle write downs.
1:19 p.m.
Mar 3, '12
I work for a non-profit credit union where any losses we take come out of the membership pool so when have to eat a loss it hurts real people.
Walking away from your home simply because you are PO'd about not being able to tap your equity is pretty low if you ask me.
Tell financial institutions we are going to make it harder for them to get paid back in full for money they lent out and they might reduce lending.
I realize a lot of lenders made bad loans and I realize many are too quick to foreclose (ie foreclosing on a member while the member is in process of getting al oan modification) so I am not defending financial instutions across the board here.
Furthermore many people who are behind on ther loans won't even answer the phone when we call.
12:10 p.m.
Feb 29, '12
Perhaps it's time to turn this collection of bills into a ballot measure.