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Before a lender (beneficiary) can foreclose on a home – whether through a judicial (circuit court) or nonjudicial (advertisement and sale) process – it must first offer a face-to-face meeting (resolution conference) with the homeowner (grantor) to attempt to avoid foreclosure when the instrument securing the loan is a residential trust deed. Homeowners at risk of foreclosure may also request a meeting. Homeowners are at risk when they are more than 30 days in default on their loan payment or when a government-approved housing counselor believes the homeowners have a qualifying financial hardship. Lenders and homeowners must request the meeting in writing through the service provider the attorney general has identified. A facilitator will represent the service provider at the meeting. A lender representative with authority to make decisions can remotely attend. An attorney or housing counselor can accompany the homeowner.

Lenders must send homeowners a notice that includes possible dates and location after the homeowner accepts the meeting in writing and pays a fee not to exceed $200. Before meeting with the lender, homeowners must first consult a government-approved housing counselor and also give the service provider all required documents and information listed in the notice. Lenders must pay a fee not to exceed $600 and give the service provider certain loan and property information and other information the attorney general requires.

Lenders who foreclosed fewer than 175 homes in the previous year may be exempt from complying with the face-to-face meeting. Exempted lenders do not have to offer a meeting with at-risk homeowners.

Senate Bill 558 also amends foreclosure actions under ORS 86.735 - Foreclosure by advertisement and sale, and ORS 88.010 - Foreclosure of liens by suit; judgment for amount of debt; other remedies. The above referenced statutes can be found at the bottom of this page.

This law applies to foreclosure actions initiated starting Aug. 4, .

Mediation requirement prior to Foreclosure  SB 1552

For a trust deed non-judicial foreclosure, HB 1552 requires a lender or beneficiary, to meet with a homeowner to discuss alternatives to foreclosure with a third party mediator, if the borrower chooses. A homeowner at risk of default may also request mediation prior to the filing of a notice of default. Before a mediation session, the homeowner must consult with a U.S. Housing and Urban Development (HUD) housing counselor. This consultation must occur within 30 days after a notice of mediation is sent to the homeowner. The consultation requirement may be waived if the homeowner is not able to meet with the counselor within this timeframe, allowing the homeowner to begin mediation with the lender. A homeowner must respond to the mediation notice within 30 days or they lose this option. The Oregon Attorney General is charged with appointing a mediation service provider. The fee for the mediation for a homeowner is limited to $200, but can be waived by the mediator or paid by the lender. The mediator has the discretion to determine when there are adequate reasons for a mediation other than in-person. Upon completion of mediation, the mediator will provide a certificate of compliance to the homeowner, the lender, and the Attorney General. The lender is required to file a certificate of compliance to this law with the county at least 20 days before conducting the sale. The law limits when a sale can be postponed and generally requires notice of postponements to be provided to the homeowner in writing. Lenders that do 250 foreclosures or less a year (including those filed by their affiliates or agents), are exempt from these mediation requirements.

This law applies on foreclosure actions initiated on or after July 11, .

Cancellations of debt during the foreclosure process – HB 2916 . When a home is sold for less than the amount owed on the mortgage, it is considered a short sale. In such circumstances, the lender has two options. One is to write off the difference between the amount owed on the mortgage loan and revenue from the short sale (known as the residual debt), and provide notice to the Internal Revenue Service on a Form 1099-C showing the amount of debt cancelled for the borrower. The other option is for the lender to attempt to collect the residual debt from the borrower. (Chapter 480, Laws)

Tenants in foreclosure – SB 491 . This bill changes the time required for a tenant to receive notice of foreclosure from 30 days to 90 days, consistent with federal law. The extended notice provisions sunset in to conform to federal law. The bill changes the definition of covered tenant. The bill adds enforcement and remedy provisions not existent in the original law, including a requirement that proper notice is given to the tenant and legal defenses if notice was deficient. Purchasers of the foreclosed property are to notify tenants within 30 days and provide contact information. (Chapter 510, Laws)

Affidavits for loan modification – HB 3610 . A requirement that a trustee deliver a notice to a borrower of default on a residential trust deed and the filing of an affidavit was passed in (SB 628). HB 3610 modifies the affidavit requirement to require that it be filed at least five days before the sale of the property (rather than on or before the date of the trustee's sale, as required previously). The bill also requires the lender to provide additional information to a borrower requesting a loan modification and to provide an explanation to a borrower if the lender determines that the borrower is not eligible for a modification. HB 3610 presumes that a lender is complying with these requirements if the lender is already providing a similar notice as required by the federal Homes Affordable Modification Program. (Chapter 40, Laws)

Second loan on home, property – HB 3656 . When a homebuyer does not qualify for a single loan to cover the purchase price of a home, the buyer may, alternatively, qualify for an 80/20 loan, which is essentially two different loans secured by one property. HB 3656A clarifies that in cases where a second loan was created as part of the same purchase or repurchase transaction as the one on which the foreclosure action was taken, and when it was owed to or originated by the beneficiary of the foreclosure or its affiliate, the holder of the second loan cannot sue for restitution. HB 3656A also clarifies language relating to a deficiency action. (Chapter 48, Laws)

Foreclosure prevention – SB 628 . Oregonians facing foreclosure often have difficulty contacting their lender to discuss their options, such as a possible loan modification. SB 628 requires that the lender or loan servicer notify a homeowner facing foreclosure of the right to a meeting (either face-to-face or by phone) and that the lender/loan servicer assess whether the borrower is eligible for a loan modification. Foreclosure notice required by SB 628 (Chapter 864, Laws)

Tenants in foreclosure – SB 952 . This bill helps Oregon renters living in foreclosed homes by requiring advance notice of the foreclosure proceedings and providing protections related to leases and security deposits. The notice will provide information about tenants' rights and where they can go for assistance. Also see HB 3004. (Chapter 510, Laws)

Mortgage lending practices – HB 2188 . Protects Oregon mortgage borrowers against abusive lending practices by restricting the sale of negative amortization loans and by requiring lenders to provide translated disclosures when loans are marketed and negotiated in languages other than English. (Chapter 603, Laws)

Enforcement of new federal mortgage lending standards – HB 2189 . Protects mortgage borrowers by allowing the department to enforce new federal laws that require additional disclosures to borrowers and restrict loan servicing abuses and misleading advertising. The bill also increases surety bond requirements and enables Oregon to participate in a national licensing system for loan originators, to ensure mortgage lenders have met education requirements, passed background checks, and followed the laws in other states. (Chapter 863, Laws)

Debt management services – HB 2191 . Protects financially vulnerable Oregonians who are increasingly turning to consumer debt management services for assistance by prohibiting misleading advertising, requiring specific disclosures, and requiring all providers of debt management services to be registered with the state, including debt settlement companies and loan modifiers. (Chapter 604, Laws)

Deficiency judgments after foreclosure – HB 3004 . Before the mortgage-lending crisis, many homebuyers financed 80 percent of the purchase price with a mortgage and trust deed and the remaining 20 percent with second mortgage financed from the same lender. However, these consumers did not have the same protections under Oregon's foreclosure laws as borrowers with a single mortgage loan. HB 3004 closes that loophole by precluding lenders that foreclosure on a borrower with an 80/20 loan from collecting from the second loan if the home sells for less than what the borrower owes. Also see SB 952. (Chapter 883, Laws)

Enhanced loan originator enforcement – SB 1064 . Expands enforcement over loan originators, the individual salespeople who work for mortgage lenders and interact directly with borrowers. The Department of Consumer and Business Services can ban or suspend loan originators from the industry for fraudulent practices, negligence or incompetence, or violating industry rules. (Chapter 38, Laws)

Mortgage rescues and foreclosure notification – HB 3630 . Protects consumers at risk of foreclosure from both consultants who offer to help homeowners avoid foreclosure, and equity purchasers who acquire a financial interest in the property. The bill requires consultants and equity purchasers to provide a written contract with clear disclosures to the homeowners and other safeguards. It also gives the homeowner rights to cancel the contract. The bill also requires a trustee acting for the lender to send the homeowner facing foreclosure a clearly written notice at least 120 days before the sale, with helpful information about the homeowner's options. (Chapter 19, Laws)