Senate Bill 555, which will require mortgage loan servicers to have a mediation session with their borrowers before initiating a foreclosure, either a judicial or non-judicial foreclosure, will have a senate committee meeting later today. The meeting is scheduled to start at 3:00 PDT, and is streaming live at www.leg.state.or.us/listn.
This bill expands the Foreclosure Avoidance Mediation Program to judicial foreclosures and makes some technical changes to clarify the mediation process.
Cody
Wednesday, February 27, 2013
Saturday, February 23, 2013
State of Oregon Legislative Measures
The State of Oregon Legislature is active in session at this time. Two bills currently in consideration are of particular interest for those involved in real estate.
The first bill, Senate Bill 558, doesn't really have much impact to real estate investors, but does have an impact on mortgage loan servicers when initiating a foreclosure process. First of all, a little history.
In the summer of 2012, two events occurred within a week of each other that had a substantial impact on mortgage loan servicers. First off, SB 1552 was passed in the 2012 Session and became law in July 2012. That bill, called the Foreclosure Avoidance Measure, required servicers to, among other things, to enter into mediation with the grantor (borrower) for the purpose of negotiating a foreclosure avoidance. The second event was that an Oregon Appellate Court basically stated that the Mortgage Electronic Registration System, or MERS, did not follow the Oregon non-judicial foreclosure laws, therefore nullifying, in most cases, a servicers right to foreclose if the beneficiary of the loan was listed as MERS. There is a lot to this case and I don't intend to discuss if in detail here.
Bottom line, is that most servicers took the approach they didn't want to go through a mediation with the borrower, and if the non-judicial systems wasn't working, then they would file a lawsuit with the courts and go down the judicial foreclosure path.
What SB1552 failed to anticipate was the change of servicers moving to judicial foreclosures. The mediation requirement was only necessary if they were attempting to foreclose non-judicially, so servicers could avoid the mediation requirement by filing in the courts.
What Senate Bill 558 hopes to cure is that loop hold, requiring servicers to engage in a mediation process before filing a judicial foreclosure.
For those that like to read the text of proposed state laws, here is a link to SB 558.
http://www.leg.state.or.us/13reg/measpdf/sb0500.dir/sb0558.intro.pdf
The second bill of interest is House Bill 2639. This bill, called the Housing Choice Act of 2013, has the potential for significant impact to real estate investors. As indicated in the summary of the bill, the bill "redefines "source of income" for purposes of prohibiting discrimination in selling, renting or leasing real property." Meaning, if you are a landlord, you can no longer refuse to rent to anyone that holds a valid Section 8 voucher.
I'm going to let you dwell on that for a while as I gather more information on the potential impact and what the thoughts are from landlords around the state. In the interim, rather than think about what types of tenants that could bring, the higher position is what additional administrative costs this will bring, the potential to increase vacancies as the wait for unit inspections protracts due to lack of inspectors, the additional costs to landlords for repairs and requirements of the HUD program, and many other things. Your thoughts?
Oh, here is a link to that bill:
http://www.leg.state.or.us/13reg/measpdf/hb2600.dir/hb2639.intro.pdf
So, add your comments. I'll be back soon with more information.
Cody
The first bill, Senate Bill 558, doesn't really have much impact to real estate investors, but does have an impact on mortgage loan servicers when initiating a foreclosure process. First of all, a little history.
In the summer of 2012, two events occurred within a week of each other that had a substantial impact on mortgage loan servicers. First off, SB 1552 was passed in the 2012 Session and became law in July 2012. That bill, called the Foreclosure Avoidance Measure, required servicers to, among other things, to enter into mediation with the grantor (borrower) for the purpose of negotiating a foreclosure avoidance. The second event was that an Oregon Appellate Court basically stated that the Mortgage Electronic Registration System, or MERS, did not follow the Oregon non-judicial foreclosure laws, therefore nullifying, in most cases, a servicers right to foreclose if the beneficiary of the loan was listed as MERS. There is a lot to this case and I don't intend to discuss if in detail here.
Bottom line, is that most servicers took the approach they didn't want to go through a mediation with the borrower, and if the non-judicial systems wasn't working, then they would file a lawsuit with the courts and go down the judicial foreclosure path.
What SB1552 failed to anticipate was the change of servicers moving to judicial foreclosures. The mediation requirement was only necessary if they were attempting to foreclose non-judicially, so servicers could avoid the mediation requirement by filing in the courts.
What Senate Bill 558 hopes to cure is that loop hold, requiring servicers to engage in a mediation process before filing a judicial foreclosure.
For those that like to read the text of proposed state laws, here is a link to SB 558.
http://www.leg.state.or.us/13reg/measpdf/sb0500.dir/sb0558.intro.pdf
The second bill of interest is House Bill 2639. This bill, called the Housing Choice Act of 2013, has the potential for significant impact to real estate investors. As indicated in the summary of the bill, the bill "redefines "source of income" for purposes of prohibiting discrimination in selling, renting or leasing real property." Meaning, if you are a landlord, you can no longer refuse to rent to anyone that holds a valid Section 8 voucher.
I'm going to let you dwell on that for a while as I gather more information on the potential impact and what the thoughts are from landlords around the state. In the interim, rather than think about what types of tenants that could bring, the higher position is what additional administrative costs this will bring, the potential to increase vacancies as the wait for unit inspections protracts due to lack of inspectors, the additional costs to landlords for repairs and requirements of the HUD program, and many other things. Your thoughts?
Oh, here is a link to that bill:
http://www.leg.state.or.us/13reg/measpdf/hb2600.dir/hb2639.intro.pdf
So, add your comments. I'll be back soon with more information.
Cody
I'm baaaccckkkk!!!!
After a considerable time away from this blog, I've decided to return. I look forward to providing quality content on real estate investing, and in particular my business, Northwest Property Option.
We're just back from the National REIA Winter Meetings, which happened to be on the Adventure of the Seas. While my tan is fading, my enthusiasm for real estate investing hasn't. Check back often and grow with me as this business grows.
Thalk to you soon.
Cody
We're just back from the National REIA Winter Meetings, which happened to be on the Adventure of the Seas. While my tan is fading, my enthusiasm for real estate investing hasn't. Check back often and grow with me as this business grows.
Thalk to you soon.
Cody
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