Foreclosure Avoidance Mediation Program is Expanding to Include Judicial Foreclosures

more+
less-

On June 4, 2013, Oregon Governor John Kitzhaber signed into law Senate Bill 558, which expands the Foreclosure Mediation Program created in 2012 to include judicial foreclosures. The original program applied only to nonjudicial foreclosures, and was created in response to the perception that borrowers were not being given an adequate opportunity to work out their delinquencies before losing their properties to nonjudicial foreclosure. Now, lenders will be required to participate in the program, regardless of the foreclosure method that they choose.

Prior to the new legislation, lenders had largely been able to avoid the mediation program by seeking judicial foreclosures instead. While judicial foreclosures require filing a lawsuit and are thus costlier and slower than nonjudicial foreclosures, those disadvantages were largely negated by the mediation requirements applicable at the time to only nonjudicial foreclosures. Judicial foreclosures also provided the clarity, certainty and finality of a judicial decree, thereby averting the all-too-common post-sale challenge to a nonjudicial foreclosure. Since the mediation program began in 2012, nonjudicial foreclosures in Oregon have all but disappeared, and the number of judicial foreclosures pending in Oregon’s courts has skyrocketed. Expect to see a further surge of judicial foreclosure activity prior to August 4, 2013 — the date when the new law becomes effective and this avenue around the mediation program is closed — as lenders seek to avoid the costs and other problems associated with the mediation program.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Lane Powell PC | Attorney Advertising

Written by:

more+
less-

Lane Powell PC on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
×
Loading...
×
×