Make no mistake. Oregon lawmakers could fix at least part of the state’s property foreclosure problems today, if they chose to do so.
They do not, but neither have they given up on the notion that something must be done, either by them or the courts.
Two things have brought Oregon foreclosures almost to a standstill for nearly a year. Last year, lawmakers added a requirement that lenders agree to enter mediation with property owners before non-judicial proceedings — the quickest and most efficient way to end a delinquent property owner’s claim to a particular property — could continue.
Rather than doing so, lenders have almost universally chosen to foreclose through court action.
Judicial foreclosures take longer and are more expensive for all concerned. Also, there is no guarantee in a judicial foreclosure that the property owner will be relieved of the debt once the property is gone.
Lawmakers are working to correct the problem by requiring mediation in both types of foreclosure.
The other problem has come from a pair of lawsuits in which homeowners have argued that their lenders’ reliance on MERS — the Mortgage Electronic Registration Systems — was illegal. MERS is part of a privately held corporation whose members include bankers and other lenders. It has been used to streamline the buying and selling of mortgages among lenders.
Last year the Oregon Court of Appeals ruled on the two suits, saying that lenders had violated state law in their use of MERS and that those who use it must rely on the more cumbersome judicial foreclosures to get the job done. Those two rulings are before the state Supreme Court, which has heard arguments in the cases but not yet ruled on them.
Both MERS questions could be resolved by a change in the law, but the Legislature’s Democrats would rather have the court make the decision than do it themselves.
They do understand what a drag on the process the current delay is, however, and have had the good sense to save a bill for such a change if it’s needed.
It’s better than nothing. Oregon cannot truly recover until the foreclosure mess is straightened out. People cannot get on with their lives as judicial proceedings drag on, and the courts themselves are ill prepared to handle the mountain of new work they’ve been given.
While we believe quicker action by lawmakers is better, apparently this will have to do for now.