The Foreclosure Crisis hits home for Oregon
Oregon
has fared better than the states hardest hit by the mortgage
meltdown, but we are now seeing the foreclosure wave that crested
over places like Las Vegas and southern California months ago crash
down on us here:
Oregon's
foreclosure rate is reaching historic levels with more than 31,000
homeowners
seriously delinquent or in foreclosure
for the first quarter of 2009 .
Oregon
is
now in the top
ten
states
for foreclosure rates for the first quarter of 2009
Foreclosures significantly decrease the value of surrounding homes. Without action. Oregonians
will lose more than $9.2 billion in decreased home value because of neighboring foreclosures between now and 2012.
The
Opportunity-
Modifying
troubled loans helps all parties, but voluntary programs aren't
keeping up.
Not only
are foreclosures bad for struggling homeowners and their
neighborhoods, they usually mean huge losses for the lenders as well.
Unfortunately, not enough loan modifications are being considered:
Up
to 50% of
projected foreclosures could be avoided through loan modification or
other workouts
Only
5-10%
of struggling homeowners are getting the help they need
One of
the biggest obstacles homeowners face in saving their home is simply
communicating with their mortgage lender. Callers are shuffled
through vast voicemail systems, bounced from one department to
another and even receive contradictory information from different
representatives. Eugene and
Salem-based foreclosure counselor Stacey Howard summed it up in her
testimony supporting SB 628 "We
can't
get through. We cannot get through and we're
doing it every day. How is the homeowner —
with their lack of information —
supposed to accomplish this?”
The
Solution-
The key to stopping
preventable foreclosures is to give homeowners the right to have a
meeting with their lender to discuss loan modification, and to have a
loan modification evaluated for their mortgage before foreclosure
takes place. SB 628 does just that, and includes the following key provisions:
When a lender
sends a foreclosure notice, they will include a notice and a form for
the borrower to request a loan modification and a meeting.
The borrower is
encouraged to work with a housing counselor to prepare a modification
proposal. The Department of Justice will fund additional non-profit
housing counselors through existing funds.
The foreclosure sale
cannot take place until the lender has evaluated a loan modification in
good faith and responded to the borrower.
