Foreclosure reform passes!

Kari Chisholm

In the closing hours of the 2012 session, a deal was made on foreclosure reform. There's much to study, but one advocate I trust - Rep. Michael Dembrow (D-Portland) - says it's "a good start". From an email he sent to constituents tonight:

After several weeks of negotiations, we reached a deal on two foreclosure reforms. An amendment to SB 1552 combined that bill with another foreclosure bill, SB 1564. The amended bill passed the House and the Senate. Under the amendment, the bill contains several important provisions. Lenders will now be required to meet face to face with homeowners being foreclosed on with a third-party mediator to explore possible alternatives to foreclosing.

The bill also requires lenders to send a representative into the mediation process who has the authority to accept or reject proposals for foreclosure avoidance measures. It directs the Attorney General to draft rules and oversee the foreclosure mediation program, and allows the mediator to waive the cost of mediation to the homeowner.

Another key piece of the legislation puts an end to “dual track” foreclosure, where banks pursue foreclosure while at the same time negotiating with the homeowner to find alternatives.

As I reported in the last newsletter, there was an attempt by a couple of legislators to attach amendments to the bill that would have watered it down, making mediation voluntary on the part of the banks, and giving approval to the finance industry’s “MERS” system of handling foreclosures (waiving Oregon’s mortgage recording laws). I’m happy to report that these unacceptable amendments were resisted and rejected.

SB 1552 will provide a measure of relief to the thousands of Oregonians who are facing foreclosure. To my mind, it doesn’t go far enough to protect homeowners but it’s a good start. I’m proud to be a cosponsor of this bill.

After holding things up to try and make mediation voluntary for banks and push through MERS, the Republicans caved - voting 56-4 in favor of the deal. (I don't know who the four were - but that data will appear overnight here. Hey Lege, can we get real-time votes online already? It's the 21st century, y'know!)

What did Republicans get? The O's Elliot Njus has that:

But in a concession to House Republicans, it requires homeowners to first meet with a housing counselor approved by the federal Housing and Urban Development Department.

"Instead of being thrown into a room with a banker and a mediator, this gives them an opportunity to be educated and get financial counseling," said Rep. Matt Wand, R-Troutdale.

That can be an advantage, said Mauricio Juarez, a Lane County counselor with the Neighborhood Economic Development Corporation.

"If the homeowner doesn't ask the right questions, they might end up without a house," Juarez said. "We empower homeowners to ask the right questions."

This is good news - and a big win for progressives. In a statement tonight, Economic Fairness Oregon's Angela Martin said:

Today is a major step forward in holding banks accountable and finally ending our state’s foreclosure crisis. Credit must be given to the sponsors of this legislation, who persevered even when it seemed there was no hope of salvaging the bill.

A week ago, it looked like these bills were going to fail. Passage of SB 1552 B is a testament to the power of leadership, determination and unyielding citizen advocacy. Thanks to these protections, we can finally begin the long overdue process of rebuilding our community and economy.

Fantastic.

By Kari Chisholm March 05, 2012