Lenders not engaging in Oregon foreclosure mediation program

Headline Story | equities.com.

SALEM — Private Oregon mortgage servicers have so far refused to participate in Oregon’s new foreclosure mediation program, declining even to respond to requests for mediation.

The state’s contractor charged with running the mediation program told an advisory committee in Salem on Wednesday that 132 eligible homeowners applied for the program on the grounds that they are at risk of foreclosure. The law allows at-risk borrowers to request a meeting with their lender even before they’ve missed a payment.

But none of the mortgage servicers responded to the requests within 15 days as required under the law that created the program.

“They just don’t want to play,” said Jonathan Conant, who is managing the state mediation program on behalf of the Florida-based Collins Center for Public Policy. He added that the five largest lenders operating in the state have indicated they won’t participate in the mediation process “under any circumstances.”

There is no penalty for banks that don’t participate in mediation with “at-risk” borrowers, a term that isn’t defined in the statute. Once the borrower is in foreclosure — provided it’s an out-of-court foreclosure — the lender could be barred from selling the home at auction if it doesn’t participate in mediation.

Meanwhile, lenders have also stopped filing out-of-court foreclosures. More are proceeding with court-supervised foreclosures, avoiding the mediation program altogether through the traditionally slower and costlier judicial foreclosure process.

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