Homeowners, Your State Actually Cares: Oregon Moves to Force Mediation before Foreclosure

 

As a new homeowner in Portland, I can’t help but feel Oregon has my back when I read news of programs the state has created to protect me from losing my home. And that’s exactly what Oregon has done. Thanks in part to an innovative, and apparently very effective median program, Oregon foreclosure filings reached a 5-year low this July. RealtyTrac reports that Oregon filings dropped 42% in June and 48% in July, compared year-over-year with 2011. Check out the numbers above, courtesy of RealtyTrac.

Who can we thank for this good news? Multiple factors are at play at the local, state, and federal level with decreased foreclosures, but a major aspect of this turnaround is mediation. This new system, effective since early July of this year, requires that defaulting homeowners be allowed to meet face-to-face with lenders to discuss alternatives to foreclosure. Oregon also passes additional legislation in July to protect mortgage holders: The Oregon Court of Appeals said lenders must file a mortgage's complete ownership history in county records before initiating any out-of-court foreclosure. This makes out-of-court procedures more difficult and expensive, and this requirement, when added to the mediation requirement, adds up to a tremendous incentive for banks to work with, not against, defaulters.

Indeed, the Oregonian reported that “the week the [mediation] program went into effect, out-of-court foreclosures came to a stop.”

Pretty impressive results for such a new policy. But then, if I weren’t impressed by Oregon in general, I’d never have bought a home here. 

Anna Marie Erwert writes from both the renter and new buyer perspective, having (finally) achieved both statuses. She focuses on national real estate trends, specializing in the San Francisco Bay Area and Pacific Northwest. Follow Anna on Twitter: @AnnaMarieErwert.

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