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Oregon Legislative Week in Review

This Oregon Legislative Update outlines the eight mortgage/foreclosure bills currently of interest to credit unions during the Oregon Legislature’s first-ever “short session.”

Oregon SealThe Oregon Legislature convened on Feb. 1, 2012, for its first-ever “short session,” giving a historic feel to the proceedings.

House co-Speaker Arnie Roblan, D-9, addressed the legislature, saying, “Colleagues, as we embark on Oregon’s first annual session, it’s important that we take a moment to recognize and celebrate this moment in Oregon’s history. We set the standard for what’s to come. And today, co-Speaker Hanna and I are confident that the standard we will set is high—not only in the issues we will tackle this session, but more importantly, in the way we will work through them, with cooperation, bipartisanship, and a collegiality that is uncommon in state legislatures these days. We worked together to accomplish extraordinary things in 2011. I am confident that the standard we will set in 2012 is the ability to work through important challenges with the kind of tone and spirit that represent the very best of Oregon."

The current slate currently holds 11 bills of interest to credit unions, including two elder abuse bills, two bills related to the Oregon Investment Act, and the following eight mortgage/foreclosure bills:

House Bill 4137 – Mortgage Services

House Bill 4137 charges mortgage loan servicers with duty of good faith and fair dealing toward borrowers, requiring the servicer to respond to and take action concerning borrowers’ qualified correspondence within certain time limits. It also requires the servicer to implement policies and procedures that enable the servicer to respond promptly and requires the servicer to credit payments to borrowers’ mortgage loan accounts on certain date.

The bill would prohibit servicers from charging a late fee until after the servicer credits payment to borrowers’ accounts and would require servicers to provide borrowers with certain statements of account at fixed times as well as at the borrower’s request. The bill also prescribes the timing and content of statements in addition to requiring the servicer to maintain a schedule of fees and charge only fees that are reasonable, that are for services rendered or costs incurred, that are authorized by the mortgage loan agreement and that are not prohibited by law.


House Bill 4138 - “Good Neighbor Bill”

The Good Neighbor Bill would prohibit the owner of a foreclosed residential real property from neglecting the property during periods of vacancy. It would permit local government to assess a civil penalty for each day during which the owner fails to remedy conditions of neglect and declares emergency, effective on passage.


House Bill 4140 - Mediation

House Bill 4140 would require a beneficiary or beneficiary’s agent under residential trust deed to send a notice of mediation and enter into mediation with the grantor for purpose of agreeing to a foreclosure avoidance measure. It specifies the form and content of the notice of mediation, the date by which the notice must be sent and the method of service. It also lays out the specific duties of the beneficiary or beneficiary’s agent with respect to mediation. The beneficiary or beneficiary’s agent is required to record a certificate of compliance from the mediation service provider in order to proceed with the foreclosure of trust deed.

The bill also seeks to establish the Foreclosure Avoidance Mediation Fund, wherein continuously-appropriated moneys are set aside for the Attorney General to use to pay the expenses of coordinating the mediation program. The bill would require the trustee or beneficiary that records the notice of default to pay a $100 charge in addition to the recording fee unless the trustee or beneficiary provides a certain affidavit.


House Bill 4147 – Recording Note Transfer

House Bill 4147 would require that each transfer, assignment or other conveyance of beneficial ownership or beneficial interest in a note or other instrument that is evidence of an obligation a grantor owes and that is secured by a trust deed on a residential property must be recorded with the county clerk within 15 calendar days in order for the trustee to foreclose the trust deed by advertisement and sale. It would further require the person that seeks to record the transfer, assignment, conveyance or reconveyance of the trust deed to inspect and correct the mortgage record and to pay the county clerk a certain amount for each correction.


Senate Bill 1552 – Mortgage Mediation

Senate Bill 1552 would require the beneficiary or beneficiary’s agent under a residential trust deed to send a notice of mediation and enter into mediation with the grantor for the purpose of agreeing to a foreclosure avoidance measure. It specifies the form and content of the notice of mediation, the date by which notice must be sent and the method of service. It further specifies the duties of the beneficiary or beneficiary’s agent with respect to mediation. The beneficiary or beneficiary’s agent would be required to record a certificate of compliance from the mediation service provider in order to proceed with the foreclosure of the trust deed. It would permit the grantor that is at risk of default to request mediation with the beneficiary or beneficiary’s agent and would require the trustee to notify certain persons if he or she postpones the trustee’s sale. It declares emergency, effective on passage.


Senate Bill 1564

Senate Bill 1564 would require the beneficiary to determine whether the grantor qualifies for a foreclosure avoidance measure or has not complied with terms of the foreclosure avoidance measure to which the grantor agreed. It would require the beneficiary or beneficiary’s agent to serve the grantor with a notice explaining the basis for the beneficiary’s determination before the trustee may conduct the trustee’s sale. It would further require the beneficiary or beneficiary’s agent to record an affidavit stating that the beneficiary has complied with the requirements to make a determination and to notify the grantor. The beneficiary or beneficiary’s agent would need to mail a copy of the notice and affidavit to the Department of Justice, and the bill would require that the trustee serve the grantor and certain other persons with a notice if the trustee postpones the trustee’s sale. Finally, it provides that violation of certain provisions of the act constitute unlawful practices enforceable under unlawful trade practices law and declares emergency, effective on passage.


Senate Bill 1576

Senate Bill 1576 would require the beneficiary or beneficiary’s agent under a residential trust deed to send a notice of mediation and enter into mediation with the grantor for the purpose of agreeing to a foreclosure avoidance measure. It specifies the form and content of notice of mediation, the date by which the notice must be sent and the method of service. It also lays out the specific duties of the beneficiary or beneficiary’s agent with respect to mediation and would require the beneficiary or beneficiary’s agent to record a certificate of compliance from a mediation service provider in order to proceed with the foreclosure of trust deed. The bill would permit the grantor that is at risk of default to request mediation with the beneficiary or beneficiary’s agent and declares emergency, effective on passage.


Oregon Investment Act

The Oregon Investment Act would establish the Oregon Growth Board to encourage investment in and availability of capital to new and existing businesses in Oregon and to increase resources available to local governments and state agencies that create, facilitate, maintain and promote financial services and support and to other efforts that further economic development in Oregon.” The bill comes from the State Treasurer’s office, and the seven-member board would include one credit union representative. Valley Credit Union President and CEO Jean Wheat-Palm testified before the House Transportation and Economic Development Committee in support of the Oregon Investment Act Monday morning.

Because of the short deadline, bills have to be scheduled for final work sessions in the first body of origin by next week. The most likely bill to move on foreclosure will be SB 1552 (up for hearing on Monday). The tricky part of that for us is the bill is sponsored by Senator Lee Beyer who serves on the board for Oregon Community Credit Union.


Questions? Contact a member of the Association’s Legislative Affairs team:

Jennifer Wagner, Director of Legislative Advocacy
Mark Minickiello, Vice President, Legislative Affairs
Stacy Augustine, Senior Vice President & General Counsel

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