Opposition Coalition Hard at Work in Oregon

Drew Hagedorn

By Drew Hagedorn, Tonkin Torp, LLP

The UTA is joining forces with the Oregon Bankers Association, the Independent Community Banks of Oregon and the Northwest Credit Union Association among others to defeat a throng of offensive mortgage foreclosure bills introduced at the behest of consumer protection advocates by the Oregon legislature.

There are more than 20 bills that would place unreasonable burdens on trustees by, for example, adding unnecessary complexity to the foreclosure process.  The proposals include:

• Requiring trustees to file affidavits on strict timelines;
• Expanding duties and obligations of trustees in a foreclosure sale; and
• Requiring mandatory mediation prior to a trustee sale. 

Troublingly, many of the proposals would make any insignificant, non-prejudicial, technical compliance error an unfair business practice resulting in exposure to punitive damages claims and attorneys' fees. 

The Oregon opposition coalition has been successful thus far in preventing a hearing on any of the bills introduced in Oregon. It now appears the advocates are now turning their attention to Senate Bill 826 and Senate Bill 827.  Both bills were introduced by Sen. Suzanne Bonamici, D-Beaverton, the legislator that advanced similar proposals in 2009.  Sen. Bonamici introduced both bills last week. As of this writing, they had not been assigned to a committee.

Senate Bill 826 would confer sweeping rulemaking authority upon Oregon’s regulatory authority, the Department of Consumer and Business Services (DCBS).  It would allow DCBS to promulgate rules to “protect consumers” by regulating activities of mortgage brokers, mortgage bankers, mortgage loan servicers. 

Of greater significance to trustees is Senate Bill 827, which would make failure to include modification forms with the notice of sale and other technical requirements to file an affidavit with the Department of Justice, a violation of the Oregon unlawful trade practices law. 

The deadline for bill introduction passed February 17.  As a result, unless a bill is amended in an offensive fashion, we’ve seen virtually all the bills that will be introduced in the 2011 session.  I am working closely with the UTA’s membership to review, analyze and develop positions on all of the bills introduced thus far.