Governor John Kitzhaber has recently signed into law Senate Bill 558A to help Oregonians avoid foreclosure and remain in their homes. Like the previous foreclosure mediation program that went into effect last July, the new law will ensure homeowners receive counseling services before the bank completes the foreclosure process.
The new program is set to initiate in early August and will shut down the “judicial loophole” that nearly crushed previous mediation efforts by the state. Before the mediation program was established, the main form of foreclosure used by lenders was the non-judicial foreclosure process. Due to the fact that mediation was only required in the case of non-judicial foreclosure, the majority of lenders switched their practices over to the “court mandated” judicial process.
“With the new legislation, the result will be more mediated settlements and fewer home foreclosures, a win-win for homeowners and banks alike,” said Attorney General Ellen Rosenblum.
Mediation efforts not only give homeowners more time to figure out solutions to avoid foreclosure, it also allows the Attorney General to take legal action against lenders who refuse to abide by state law.
In March of this year alone, banks initiated more than 1,000 judicial foreclosure across the state. With virtually all defaults undergoing the judicial foreclosure process, a mere 538 homeowners entered the mediation program. Out of 340 mediation requests by the homeowner, over 90% of applicants were turned down by the lender.