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.
Firefox recommends the PDF Plugin for Mac OS X for viewing PDF documents in your browser.
We can also show you Legal Updates using the Google Viewer; however, you will need to be logged into Google Docs to view them.
Please choose one of the above to proceed!
LOADING PDF: If there are any problems, click here to download the file.
Topics: Borrowers, Foreclosure, Judicial Foreclosure Process, Lenders, Mediation, Mortgages, New Legislation
Published In: Alternative Dispute Resolution (ADR) Updates, General Business Updates, Finance & Banking Updates, Residential Real Estate Updates
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