For the tens of thousands of Oregonians and their families who have lost their homes in the past four years, the recent announcement of the national mortgage settlement is of small comfort compared to their loss. The 49-state settlement will stretch over three years, and divide the $25 billion pound of flesh from the five major lending institutions down to about $1,800 per victim in Oregon.
But for the tens of thousands who are in the pipeline of foreclosure today, an ounce of prevention is still worth a pound of cure.
In Salem, two bills are left alive that would give Oregon homeowners protection against the predatory lending practices that contributed to the housing crisis and the avalanche of foreclosures it caused. Championing that cause through the Senate committee process is State Sen. Chip Shields, D-North/Northeast Portland, who chairs the General Government, Consumer and Small Business Protection Committee.
Shields’ committee cleared Senate Bills 1552 and 1564 that would install protections for consumers when they go to modify their loans to avoid foreclosure, and do away with the dual-track process that allowed banks to blindside homeowners with foreclosure even while they were in the process of modifying their loan. The measures echo the national mortgage settlement overview, the details of which are still unknown.
However, the bills survival is questionable, and reports as of yesterday (Feb 27) indicated they might not survive a vote. House Republicans snuffed four similar bills by denying hearings in the committee process. And there’s a Republican proposal to remove the dual-track violation from prosecution under the unfair trade practices act, an action that Shields says would water down the law, remove any remedy to victims and prevent the state attorney general from pursuing justice on an issue that now dominates concerns among his constituents.
Chip Shields: I’d say four years ago, 70 percent of my constituent case work was helping people who were having problems with government agencies, department of human services, etcetera. Now, 70 percent of our constituent work is people who are just complete at wits end about how inept, either on purpose or by accident, their lender or their mortgage company is. People in situations where they’re going along with the modification process in good faith, and then, wham, they get the notice right in the middle of it that the bank is foreclosing on them for no good reason — when they’ve been following the advice of the person on the other end of the phone. So it’s a huge problem, and we’re not just hearing from homeowners, we’re hearing from Realtors who are amazed at how poorly their clients are being treated. Continue reading