In response to the ongoing foreclosure crisis in this country, many states have implemented mediation programs to assist homeowners in finding ways to avoid foreclosure. In 2012, the state of Oregon passed Senate Bill 1552, which implemented a new foreclosure mediation program for homeowners in nonjudicial foreclosure. The foreclosure mediation program was subsequently expanded to also include judicial foreclosures beginning on August 4, 2013. Read on to learn more about how Oregon’s Foreclosure Avoidance Program works and how you may be able to benefit from the process.
(To learn about other options for dealing with foreclosure, visit Nolo's Foreclosure section.)
What Is Foreclosure Mediation?
Foreclosure mediation is a process that is used to help homeowners avoid foreclosure by coming up with an alternate solution that benefits both the homeowners and the lender. Mediation consists of a face-to-face meeting between:
- the homeowners
- their lender, and
- a neutral third-party (the mediator).
At the meeting, the parties discuss the homeowners’ financial situation and try to negotiate a way for the homeowners to keep the home or give up the property without going through a foreclosure. By working together, the parties are often able to reach an agreement.
Potential outcomes of mediation include:
- loan modification
- repayment agreement
- forbearance agreement
- short sale
- deed in lieu of foreclosure.
(To get information about each of these options, see our Alternatives to Foreclosure area.)
Oregon Foreclosure Process
In Oregon, foreclosures may be judicial or nonjudicial. (To learn more about the difference between judicial and nonjudicial foreclosure, and the procedures for each, see Will Your Foreclosure Take Place In or Out of Court?)
(To learn more about foreclosure in Oregon, see the Summary of Oregon's Foreclosure Laws.)
Oregon’s Foreclosure Avoidance Mediation Program
Senate Bill 1552 (2012) established a Foreclosure Avoidance Mediation Program beginning on July 11, 2012. The Foreclosure Avoidance Mediation Program initially only applied to nonjudicial foreclosures. As a result, most lenders stopped filing out-of-court foreclosures and chose to proceed judicially instead to avoid the mediation program altogether. In fact, nonjudicial foreclosures nearly ground to a halt in Oregon following the mediation law and an unrelated appellate court ruling on lenders’ assignment recording practices.
However, on June 4, 2013, SB 558 was signed into law (Oregon Laws 2013 chapter 304). The new law expands the program to cover judicial foreclosures and makes changes to the overall structure of the program. The new mediation program was implemented on August 4, 2013.
Foreclosures Prior to August 4, 2013
The 2012 program is no longer accepting new cases. (For more information, go to www.ForeclosureMediationOR.org, and click on "Learn More About 2012 Program.)
Foreclosures on or after August 4, 2013
On or after August 4, 2013, prior to initiating any type of foreclosure proceeding (judicial or nonjudicial), a lender must request a resolution conference with the homeowner in accordance with the rules of the Oregon Foreclosure Avoidance Program. (The homeowner may also request a resolution conference with their lender by meeting certain requirements. See below for more information.)
After the lender requests mediation, the Mediation Case Manager will send a Notice of Resolution Conference to both parties. This request will include:
- a range of dates within which the resolution conference will occur
- details about required documents and deadlines for submitting these documents, and
- information about when and how to pay the required fee.
If You Have Received a Notice Regarding a Resolution Conference
If you agree to participate in a resolution conference, your lender is not able to initiate any type of foreclosure proceeding until they have complied with the requirements of the program by attending a resolution conference with you. Follow the steps below to participate if you have received a notice regarding a resolution conference.
- Contact Mediation Case Manager (the service provider) toll free at (855) 658-6733 or locally at (503) 451-6774 to get connected with a case manager who will work with you throughout the process.
- Obtain an appointment with an Oregon Housing and Community Services (OHCS) approved housing counselor. You can find a OHCS-approved counseling agency by going to www.ForeclosureMediationOR.org, clicking on "Learn More About 2013 Program," "For Homeowners - Learn More," and "Counseling."
- Submit the $175.00 fee for participation. (A fee reduction waiver is available for households making 200% or less of the federal poverty level.)
- Complete and upload your required documents to the online portal. Your case manager or housing counselor will be available to assist you with this. You can find a list of required documents by going to www.ForeclosureMediationOR.org, clicking on "Learn More About 2013 Program," "For Homeowners - Learn More," and "Documents."
Requesting Mediation Even if You're Not in Foreclosure
If you are not in foreclosure, you may be eligible to participate in the program if you are 30 or more days in default on your loan obligation, or you are experiencing a financial hardship that may qualify you for a foreclosure avoidance measure. If you want to participate in the program, you may request a resolution conference with your lender by following the steps listed below.
- Obtain an appointment with an Oregon Housing and Community Services (OHCS) approved housing counselor. More information about OHCS-approved counseling agencies is available by going to go to www.ForeclosureMediationOR.org, clicking on "Learn More About 2013 Program," "For Homeowners - Learn More," and"Counseling."
- The housing counselor will determine whether or not you are eligible for participation in the program and assist you in making the request for a resolution conference. (Housing counselor certification is required to request a resolution conference with your lender.)
- Submit your request online with your housing counselor and a case manager will contact you to help you every step of the way.
New Program Shows Promise
The expanded foreclosure mediation program is already looking to be more successful than when the previous program was first launched. In the first six weeks since the new program went into effect, it has received 456 requests for face-to-face meetings between mortgage borrowers and lenders, many of which came from banks. (In comparison, in the first six weeks after the mediation program was initially launched in July 2012, it received only one mediation case referred by a private lender, and only 286 requests for mediation in the entire 13 months that it was in effect.)
Foreclosure Filings Drop After New Program Goes Into Effect
Foreclosure filings in Oregon dropped off significantly in response to changes to the mediation program. This is most likely in a short-term slowdown as lenders re-evaluate their procedures to ensure they are in compliance with the new rules. (Before the new rules went into effect in August, foreclosures had been returning to levels seen in mid-2012, prior to the last time state foreclosure law was modified.)
Certain Lenders Are Exempt From the Program
Lenders who initiated fewer than 175 foreclosure actions in the preceding calendar year do not have to participate in the program. If your lender is exempt, contact it directly to discuss alternatives to foreclosure.
For More Information
For more information about the Oregon Foreclosure Avoidance Program, go to www.ForeclosureMediationOR.org and click on "Learn More About 2013 Program." You can also go to www.doj.state.or.us and click “Foreclosure Mediation”.