Oregon Legislature Passes Foreclosure Protections

  By Salem-News | March 5, 2012 - 8:10 pm | ,

Salem, OR – Oregon homeowners win big today with the passage of a bill that will offer long awaited foreclosure protections. The agreement came in the closing hours of this year’s legislative session, and was a direct result of tireless efforts by key legislators, consumer advocates and Oregon residents.

The bill, SB 1552 B, will provide an end to the current dual track system in which a homeowner is simultaneously negotiating for a loan modification while in active foreclosure. It will also implement a mandatory mediation program in Oregon, which is already used in 21 other states. Well-established mediation programs result in foreclosure avoidance rates upward of 50%.

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

Although the legislation is based on SB 1552 and SB 1564, two bills that easily passed the Senate, the laws stalled under intense bank industry lobbying in the House until the final days of session.

Ginny Real, a Salem resident who lost her home of 24 years last July, was in the House chamber to watch the final vote. She participated in a pre-session press conference at which Senator Diane Rosenbaum and Representative Tina Kotek announced that the foreclosure bills were a key priority this session. Since then, Real has testified in support of the bills and personally visited with legislators to urge passage of foreclosure reform.

“My husband and I lost our home, and our life’s investment, because we trusted the information from our bank,” said Real. “Now that lawmakers have taken action, other Oregonians won’t face the same shame and frustration we did.”

The bill passed the House and was quickly moved to the Senate for a concurrence. It will now head to Governor John Kitzhaber.

“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,” said Martin. “Thanks to these protections, we can finally begin the long overdue process of rebuilding our community and economy.”

Source: Economic Fairness Oregon www.economicfairnessoregon.org


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  • Bob Gallagher

    Oregonians have always had foreclosure protection. It is the “Pay Your Bills” program. People who make the payments on a contract they knowingly signed do not get their homes foreclosed on.

    If you would like to avoid foreclosure, do not buy a house you can not afford. Responsibly manage your life and your finances by making sound decisions. If you are unable to do this, rent.

    Oh, there is always the example of the guy who had some medical catastrophe, but lets face reality. The vast majority of people who have their homes foreclosed are simply irresponsible people who made poor choices.

    I need look no further than the empty house across the street. They had plenty of money for ATV’s, leather furniture, a TV the size of Rhode Island, boats, etc. However they couldn’t see it in themselves to pay the people who they borrowed money from to purchase their house.

    No, the government doesn’t need to create another law to protect you from yourself. Just make the payments you agreed in contract to make and you will avoid foreclosure.

    Personal responsibility solves 99% of everything. Try it, you’ll like it.

    • Chris Minor

      I have been involved in this drama for some time, having represented both home owners and lenders. I have to agree with Bob Gallagher that the obvious solution is to live up to one’s obligations. On the other hand, a lot of folks got sucked into the prevailing view that home prices could only go up, and many of the lenders believed the myth as well. To some extent, at least some of the lenders are equally guilty of bad judgment. They share the risk and are suffering right along with those whose loans are being foreclosed.

      Where I take real issue with the lenders, particularly large lenders, is in the process of deciding whether to foreclose or to modify. In my experience a lender is much better served to reduce the interest rate, reduce the payments, even forgive some of the principal, rather than foreclose. If the loan is effectively modified, the home owner pays something, the homeowner pays the taxes, keeps the heat on, protects against vandalism, buys insurance and generally cuts the lender’s loss. If the lender takes the home back, at least in many instances, it sits vacant and at risk of vandalism, it becomes harder to sell, it adversely affects the value of other properties, it incurs extra costs which the lender must pay, and the lender receives nothing while it looks for a buyer (and the lender incurs a number of intrinsic costs in the foreclosure and resale, further exacerbating its loss). Not all home owners are willing to make a good faith effort, and there is really no other choice but to foreclose. But if the home owner is willing to pay something reasonable, and to preserve and protect the property, the lender would do well to work meaningfully with the home owner, rather than responding with meaningless form letters originating from someone who has no authority to do anything, with another branch of the lender all the while sending default letters and moving on with foreclosure.

      It is unfortunate the lenders haven’t taken this course on their own, as I am very dubious that a legislative mandate will solve the problem.

  • Greg Forward

    That’s funny, Bob. You musn’t have read the article through. Quote from above article states “My husband and I lost our home, and our life’s investment, because we trusted the information from our bank”

    I do agree that people were reckless in their spending. Most people were awash in greed with credit so loose. That goes for Banks, too.
    Personal responsibility solves more than 99% of everything. If the Banks were responsible for their fair share of the economic issues, we wouldn’t have had to bail them out with over $16 TRILLION in taxpayer money.

  • Don Drago

    Bob , It obvious that you dont know the entire story , heres a little well published background , you can verify this through many different forums ,, The Reals lived in that house for over 20 years , They were approved for a loan modification after their paperwork was lost twice by their bank ,the day the modification was approved , they were informed that the house was sold and they had 10 days to vacate , Mr. Real suffered some very serious medical issues ,, I know these people personally , i have known them my entire life ,, maybe you should learn more about an individuals situation before becoming annoyingly judgmental