i
Mediation efforts ramp up fo r foreclosure victims, but other resources await lawmakers’ discretion
BY A M A N D A W ALDRO UPE
S T A F F W R IT E R
ousing and consumer advocates are eagerly
counting down to July 11.
H
That is the day the provisions of the
state’s new mandatory mediation law, passed by
the Oregon Legislature earlier this year, go into
effect.
The law requires banks to enter into mediation
with homeowners 60 days before their home is
foreclosed upon. Homeowners at risk of
foreclosure — people, for instance, who have not
paid their mortgages for a few months — are also
eligible for mediation.
Mediation enables a representative of the bank
and the homeowner to sit down for a one-on-one
conversation regarding the homeowner’s situation.
The hope, from consumer advocate’s point of view,
is that the mediation process will reveal at least
one option allowing the homeowner to stay in their
home.
Oregon posted its highest foreclosure rate ever
in the first quarter of 2012, at 3.86 percent. This
translates to a total of 23,335 loans in the
foreclosure process in Oregon.
The program would not be possible without the
neary $30 million Oregon received in April as the
result of the national mortgage settlement
agreement reached between state attorneys
general and the five major financial institutions
deemed most responsible for the nation’s
foreclosure crisis — Bank of America, Wells Fargo,
JP Morgan Chase, Ally Financial, and Citigroup.
A fraction of those dollars — $7.6 million — was
allocated in late May by the Legislature’s
Emergency Board, a joint board of senators and
representatives that meet when the Legislature is
not in session.
Approximately $3.9 million will be used to start
the mediation program, which will be overseen by
the Department of Justice. The rest was given to
Oregon’s Community and Housing Services agency
to increase legal assistance to homeowners,
expand the state’s network of housing counselors,
and fund outreach efforts to find homeowners
facing foreclosure who are eligible for mediation
and other services.
But what about the rest of the $22 million now
padding the state’s General Fund?
It’s expected that the Emergency Board will
allocate more of the settlement money to
foreclosure prevention programs when the board
meets again in September and December. The
amount will be contingent upon reports the board
will receive from the Oregon Housing and
Community Services Department and the
Department of Justice.
Already, the spending on foreclosure prevention
programs is considered unprecedented in Oregon.
“It’s giving people access to tools and resources
they haven’t had,” says Angela Martin, the
executive director of Economic Fairness Oregon.
To consumer advocates, it’s a boon that they
hope will finally stem the number of foreclosures
in the state.
“By any standard, it’s a fair bit of money for
Oregon,” says Janet Byrd, the executive director of
the nonprofit housing advocacy organization,
Neighborhood Partnerships. “(The mediation
program) will lend some clarity to the foreclosure
process. The settlement money will mean that the
programs get started soon, and the system is more
complete and responsive.”
The nationwide mortgage settlement, in which
Oregon was one of 49 participating states, totaled
$25 billion, and included a mix of payments for
various actions. It included $2.5 billion that went
directly to the states, with suggested guidelines
that the funds were intended to have some
application to preventing foreclosures, prosecuting
fraud and compensating states for the costs caused
by “alleged unlawful conduct” of the big banks.
But those are only suggested guidelines.
According to a report released in May by
Enterprise Community Partners, a national,
nonprofit, affordable-housing financing
organization, many states are diverting the money
to filling their own stressed-out coffers.
The report, which looks at the ongoing decisions
in each state on how to apply their settlement
money, shows that at least six states aren’t
dedicating any of the money to housing, many have
split the money, and most states, including Oregon,
are still in the process of deciding what to do with
it.
In Missouri, the state legislature there voted to
use its $40 million to offset planned cuts to higher
education.
Out of Nebraska’s $8.4 million in settlement
monies, only $1 million went into the state’s
Read more on
foreclosure mediation
from Janet Byrd from
Neighborhood
Partnerships
See HOLD 'EM , page 7
Page 9
Inside
Quiz, culture,
Wee, the people
The gravity of
and, oh yeah,
abuse
Wayne Baseden
Jack Sim wants
everyone to come out
o f the water closet
and face the facts
about our most basic
needs
The second in our
series chronicling
the complex personal
toll o f domestic
violence
Page 3
Page 4
Page 8
community
service
A day in the life o f