A bill to extend mandatory foreclosure mediations for distressed borrowers in Oregon passed the state House this week and is now heading to the governor’s office for final approval.
The bill, if signed into law, would apply the mediation requirements to judicial foreclosures, which is well beyond the current reach of the mediation guidelines, reports Elliot Njus with The Oregonian.
Mandatory foreclosure mediation passed in the state more than a year ago and has been cited as a cause for a slowdown in the foreclosure pipeline.
Daren Blomquist with RealtyTrac conceded in the past that new foreclosure laws – including mandatory mediation in Oregon and a new private right of action for foreclosure plaintiffs in California – could slow foreclosures as financial firms rethink their strategies in those states.
First-quarter numbers from RealtyTrac definitely showed similar trends in both states.
Annually the number of unlisted foreclosures – or distressed properties not yet up for sale – declined 50% in Oregon and 31% in California. This means fewer foreclosures are waiting in the wings in those states, a deep drop from a year ago.
The new bill, if passed, is significant because it would require mediation sessions between borrowers and homeowners even when a judicial foreclosure is filed. Judicial foreclosures became the route for banks wanting to skip more onerous non-judicial requirements.