How our legislators may not deliver on homeowner protection

A few weeks ago I wrote about house bills and ideas that could ease the way for Oregonians facing foreclosure.

" House Bill 4137 would add more specific requirements for servicers to follow, including deadlines to respond to borrower inquiries and limits on fees.

Senate Bill 1564 would bar lenders from putting a homeowner in a trial modification program and foreclosing on their home at the same time, the so-called dual-track process.

Senate Bills 1552 and 1576 and House Bill 4140 would require lenders to mediate with homeowners before foreclosing, as Washington, Delaware and Nevada do."

In addition, that blog talked about the emergency regulations Attorney General John Kroger issued, that brought the mortgage services industry under the Oregon Unlawful Trade Practices Act.

Today, the Oregonian reports, in an article by Elliot Njus, that although the Senate has passed most of the above reforms, Republican leaders in the house have removed much of the homeowner protections.  For instance, instead of barring lenders from using the dual track processes as seen in SB 1564 above, lenders would be require to contact homeowners with whom the lender has not had contact, let the homeowner know if they might qualify for a loan modification and inform them of the scheduled foreclosure date.

The GOP leaders also took out the requirement that lenders actually meet with borrowers before taking their home in foreclosure.  Instead, the new proposal would make mediation voluntary AND ease some legal hurdles for foreclosing.  Other changes include removing the emergency regulations of last month, involving the Oregon Unlawful Trade Practices Act, and a retroactivley validating the Mortgage Electronic Registration System .

A quick primer on MERS:  way back, whenever a mortgage was sold from one financial institution to another, documents were actually filed and recorded in the public records, providing a record of who owned what loan.  In addition to providing accurate information, the lenders paid fees for the recording of the documents.   When mortgage shenigans were in their infancy, MERS was created by the lien holders as a way to "register" ownership and changes of ownership on the loans, while avoiding the fees.  Oregon has long had a rule requiring such filings be recorded.  This discrepancy led to some courts in Oregon saying foreclosures involving MERS were improper and violated state law.  Make note that last year, legislation validating MERS died in a house committee. hmm.

Hello!?  I think these bills were aiming at some protections for homeowners, not making foreclosing by lenders easier.  So what started out as constructive measures intended to focus on specifics of helping homeowners in trouble, becomes something that makes foreclosure easier, doesn't make a lender actually talk to someone before taking their home, and validates a questionable practice of tracking who own what loan.

Really?