Consumer Protection News

Monday- As the legislative session drew to a close, Oregon lawmakers took action to address the foreclosure crisis by passing SB 628. The vote on the house floor was 57-2-2 on Monday evening, after passing the Senate unanimously on Friday. The bill will give struggling homeowners the opportunity to meet with their lenders to discuss modifying their home loan, and requires lenders to evaluate loan modifications in good faith.

“Frankly, there's a lot of blame to go around for the foreclosure crisis, but there are a couple of things we can all agree on. The problem is getting worse, and we should do everything we can to stop the bleeding. Thanks to the leadership and tireless advocacy of people like State Senator Suzanne Bonamici, the legislature has now taken a real step forward for struggling homeowners, and all Oregonians,” said OSPIRG Consumer Advocate Matt Wallace.

Oregon has been facing skyrocketing foreclosure rates, and has been ranked in the top ten foreclosure states for the first quarter of 2009. The economic impacts of the crisis are severe, with Oregon homeowners projected to lose billions in equity due to neighboring foreclosures. Up to half of all foreclosures could be avoided through a loan modification or other workout option, but lenders and borrowers just aren't talking (for more statistics and cites, check out our issue overview).

Consumer advocates remain concerned about potential abuse of an exemption in the bill meant to avoid duplicating efforts by companies with robust loan modification efforts already in place.

"Despite roadblock after roadblock from the financial lobby in Salem, we got a bill passed. But, we are concerned that for this program to live up to it's potential, we will have to count on the good faith participation of the financial services industry,” continued Wallace. “We intend to work closely with lawmakers to monitor the implementation of the program, and will urge further action if necessary to protect Oregon consumers and the economy.”

The bill now goes to the Governor's desk.