Senate Commerce Committee Passes Legislation to Help Families Facing Foreclosure.

HB 3630 severely restricts foreclosure "rescue" schemes; requires plain language.

Oregon State Capitol by Tim King Salem-News.com

(SALEM, Ore.) - The Senate Commerce Committee in Salem approved HB 3630 this morning by a unanimous vote. They say the bill will help Oregon families facing foreclosure by cracking down on mortgage "rescue" scams.

These scams take advantage of vulnerable homeowners by promising salvation from impending foreclosure. Calling themselves ‘foreclosure consultants,’ purveyors of these scams can oftentimes steer homeowners into further financial crisis, resulting in worsening credit and/or loss of the home.

In the most serious cases, homeowners enter into complicated agreements with ‘equity purchasers,’ where the borrower can lose their equity, the title to their home, and in essence, end up renting their own home from the ‘equity purchaser’ indefinitely.

"We’ve heard testimony on how these ‘rescue’ scams can devastate homeowners who are already facing dire times," said Senate Majority Leader Richard Devlin (D-Tualatin).

"I’m proud of our vote today to put an end to this dishonorable practice in Oregon. It is simply unacceptable to take advantage of those who are already in a weak position."

In a separate section of the bill, HB 3630 requires that mortgage lenders provide borrowers facing foreclosure with a written, plain language notice of the potential consequences of their situation and ways to avoid foreclosure.

This notice must include a clear statement of: the amount the borrower would need to pay to bring the loan current; a list of ways to avoid foreclosure; legal and counseling services for borrowers facing foreclosure; and a toll free number to call to help work out options with the lender.

"Providing clear and straightforward information to homeowners is common sense," said Sen. Ben Westlund (D-Tumalo), chair of the Senate Commerce Committee. "Considering the stress of impending foreclosure, homeowners need all the help they can get, in language they can understand."

The two concepts in HB 3630 were products of the Governor’s Task Force on Mortgage Lending, a broad coalition of consumer advocates, industry groups, and legislators. HB 3630 was passed by the House last week by a unanimous vote. The bill will now move to the Senate floor for its final vote.

Source: Oregon Legislature