SALEM, Ore. – A new law in Oregon that took effect on Wednesday will give homeowners new tools to help them prevent foreclosure on their homes.
Senate Bill 1552 (PDF), which took effect July 11, gives homeowners threatened with foreclosure the right to meet with their mortgage servicer face-to-face in mediation before final foreclosure decisions are made.
“This important piece of legislation will hold loan servicers accountable and ensure that Oregonians have every opportunity to stay in their homes,” said Oregon Senate majority leader Diane Rosenbaum said in a press release from the Oregon Department of Housing and Justice.
Rosenbaum called the law one of the “key accomplishments” of the 2012 legislative session for Oregon lawmakers.
The law states that homeowners who receive a notice of default will receive information on free foreclosure counseling and low-cost mediation services. Mediation services will be provided to homeowners at a subsidized rate of no more than $200.
The state says funding for the program comes from mortgage servicers and from funds set aside by the legislature from a national settlement with five large banks.
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During mediation, the law gives homeowners the ability to explore alternatives to foreclosure including loan modifications, refinancing, short sales and other options.
“By sitting down with their servicer, and a neutral mediator we’re ensuring homeowners will be well informed, and that they will be heard by banks,” said State Representative Betty Komp. “We’ve passed a landmark bill that will give Oregon homeowners an important tool to help them remain in their homes. I’m excited that today middle class families and at-risk seniors can begin accessing this program.”
The Department of Justice convened a 15-member work group to implement the program across the state and develop program rules. The Department of Justice also contracted with a mediation service provider, Collins Center for Public Policy to manage the mediation program.
Homeowners who want to participate in the mediation program should go to http://www.foreclosuremediationor.org/ or call 855-658-6733.
Homeowners can find a HUD Certified counselor and learn more about foreclosure prevention by visiting www.foreclosurehelp.oregon.gov or calling 1-800-723-3638.