After an early morning committee hearing on two foreclosure-related bills, Sen. Chip Shields, a Portland Democrat and committee chairman, signaled his intention to move the proposals to the Senate floor quickly.
Conversely, four foreclosure bills in the Oregon House died Monday, after Rep. Gene Whisnant, a Sunriver Republican and a co-chairman of the House General Government and Consumer Protection Committee, refused to schedule them for a public hearing by the end of the day.
The Senate-side bills, Senate Bill 1552 and SB 1564, would, respectively:
Require a lender and borrower to enter into mediation — preforeclosure and with the help of a neutral third party — to discuss loan modification options and other foreclosure avoidance measures.
Prevent a lender from beginning foreclosure proceedings while still negotiating a loan modification, often referred to as the “dual-track” process.
During the Senate committee hearing, Salem resident Ginny Real claimed that she had been “lied to constantly” by a major bank before it unexpectedly foreclosed on her home last summer.
Others residents testified emotionally that their lenders had shown no desire to negotiate a loan modification to help them keep their homes.
“I really wish there had been some laws in place to stop this from happening to us,” Real said. “My thinking is, better late than never.”
Sybil Hebb of the nonprofit Oregon Law Center said the bills would provide a “fair and reliable process” for people facing the possibility of foreclosure.
“We hope to avoid foreclosures where they are unnecessary and avoidable, but also just as importantly we hope to identify, in a fair and effective manner, when that’s not going to be the case,” she said. “If foreclosure is inevitable, homeowners benefit from knowing that ahead of time.”
Lobbyists representing banks and credit unions testified that the bills amounted to overregulation of the industry and wouldn’t help many more Oregonians keep their homes.
Paul Cosgrove, of the Oregon Bankers Association and Oregon Financial Services Association, said similar mediation programs adopted in Nevada and Washington state hadn’t yielded great improvements in foreclosure rates.
“Some of the solutions used in other states ... are not likely to be better than what we (currently) have and might very well be worse,” he said.
