Today
the Public Safety Subcommittee of Ways and Means passed an amended
version of SB 628-- a bill to address the foreclosure crisis in
Oregon. The bill is the result of a long process of compromise, and
while we are concerned by the potential for abuse opened up by recent
amendments, this bill is a real step forward. The Oregon legislature
is now one step closer to taking action to prevent unnecessary
foreclosures, to the benefit of all Oregonians.
Oregon
has been hard hit by the foreclosure crisis, and the economic impacts
are severe. This year, Oregonians are facing near record foreclosure
rates. That's terrible for the families who lose their homes, and
it's bad news for their neighbors too. Without action, Oregon
homeowners will lose billions of dollars in equity over the next few
years, due to the negative impact of foreclosures in their
neighborhoods.
Frankly, there's a
lot of blame to go around for the mortgage meltdown, but there are a
couple of things everyone can agree on. The problem is getting
worse, and we should do everything we can here in Oregon to stabilize
the housing market and our economy.
We
have an opportunity here in Oregon to address the foreclosure crisis.
We know that up to half of all foreclosures could be prevented if
the lender and the borrower could work out a loan modification or
workout that would keep payments coming in to the lender, and lower
monthly payments to keep struggling borrowers in their homes. We
also know that these conversations just aren't happening often
enough. Time and time again, borrowers attempting to secure a loan
modification can't even get their lender on the phone. SB 628
addresses that problem by requiring lenders to evaluate in good faith
a loan modification at the borrower's request, and to meet with the
borrower to discuss their options.
The
version of the bill passed by the committee today represent the
results of a months long process of compromise to address the
concerns of the united financial lobby, and we are concerned about
the potential for abuse of a provision that exempts lenders from many
of the requirements of the bill in certain circumstances. The clear
intent of the exemption in this bill is to excuse those lenders who
have robust modification programs in place pre-foreclosure from
having to repeat the process once the foreclosure notice is filed,
and thus preventing duplicative efforts. The intent is not to excuse
lenders from responding to borrowers in a timely way, or from meeting
with borrowers at their request, even if a loan modification is not
ultimately approved. Whether this bill succeeds in living up to its
intent will depend in large part on the good faith participation of
the financial services industry. If these companies act in good
faith to uphold the intent of this legislation, Oregonians will be
well served. If instead lenders and servicers attempt to game the
system, using the exemption language to avoid interaction and proper,
timely notice to the borrower, the policy will fail to live up to its
potential.
Ultimately, SB 628
represents the best opportunity for the state legislature to address
this problem head on, and to prevent unnecessary foreclosures to the
benefit of all Oregonians, and with so little time left in this
legislative session, we're calling on the legislature to make action
on this crucial issue a top priority.
