By Anna Braun, Consumer Law Section Executive Committee

The Oregon Foreclosure Avoidance Program goes into effect August 4.[1] After that date, most lenders must request a face-to-face meeting (called a “resolution conference”) with the homeowner prior to commencing a judicial or non-judicial foreclosure. A homeowner does not have to wait for the lender and may initiate the process through any approved housing counseling agency.

Only those lenders that commenced fewer than 175 foreclosures in the prior calendar year are exempt from the requirement. (Lenders claiming the exemption must submit a sworn affidavit to the Oregon Department of Justice.)

BEFORE COMMENCING A FORECLOSURE

A non-exempt lender that intends to foreclose must request a resolution conference and receive a Certificate of Compliance before filing a complaint for judicial foreclosure or recording a Notice of Default. The request is submitted to the service provider, Mediation Case Manager (MCM),that was chosen by the Attorney General’s office to coordinate this program.

A homeowner will receive an initial notice with instructions and a date range for the resolution conference. At this point a HOMEOWNER MUST PAY A FEE WITHIN 25 DAYS TO PRESERVE THE RIGHT TO A RESOLUTION CONFERENCE.  The fee is $175 but will be reduced to $50 if the homeowner is low income.

If no fee is paid, MCM will cancel the resolution conference. At that time the foreclosing lender will receive a certificate to file when commencing a foreclosure that shows they complied with the program and the homeowner did not participate.

If the fee is paid, the homeowner will receive a second notice with the exact date and time of the resolution conference, which will be scheduled within 75 days of the first notice. Between that notice and the conference, a homeowner must meet with a housing counselor and submit required documents to the lender through a secure online portal. A housing counselor will assist the homeowner at no charge in preparing the best possible proposal to the lender.  After the homeowner submits his documents, the lender must provide the homeowner with information about the loan, including the owner’s name, a payment history, and an itemized list of all fees and charges.

At the resolution conference, an agent of the lender must attend in person and either have complete authority to negotiate and commit the lender to an agreement or have another person with authority participate by phone. The homeowner must also attend in person. The conference will be conducted by a facilitator trained in mediation and basic foreclosure issues.  Any agreement reached must be in writing and signed by both parties. A lender is not required to offer a modification if the homeowner is not eligible.

After the resolution conference concludes, the lender will receive a certificate of compliance good for one year that the lender must record if foreclosing nonjudicially or attach to the complaint if foreclosing judicially. The certificate must be valid and unexpired at the time the foreclosure is commenced (but not at the time the foreclosure is completed).

If the lender does not comply with the program requirements, it will receive a non-compliance notice and must foreclose judicially. To foreclose judicially, a lender must attach to the complaint either an affidavit showing they were exempt from the program or a certificate of compliance or a notice of non-compliance.

If a lender commences a foreclosure either with a notice of non-compliance or no attachment of the documents listed above, a party may move to abate or dismiss the foreclosure and if a motion is granted the court may award attorney fees and costs to the moving party.

Other enforcement of the program is the responsibility of the Oregon Attorney General’s office.[i]