Foreclosure Forum Notes

Organizational Reps at Foreclosure Meeting

Held last night at St Johns Community Center, Co-Hosted by Oregon State Rep Nina Kotek and US Congressional Rep Earl Blumenauer.  

Reps from several non profits, DCBS and OHCS also in attendance. (Pic is of Hacienda, DCBS, Our Oregon, and OHCS reps).

I estimate attendance at around 75 for this two hour meeting, pretty good for a rainy Tuesday evening. My notes:

• OHCS rep said Hardest Hit program operational in December.
• Hacienda rep indicated that they have a regular Wednesday meeting on Foreclosure Prevention. (No class this week, according to website).
• Kotek indicated that she was aware of Hardest Hit allocation issues and concerns from Deschutes and Jackson county about HH allocations.
• Blumenauer stayed for only first half hour because of sick child, indicated he though possible future bankruptcy reform could help apply pressure to banks to be more responsive on loan modifications. 
• Counseling agencies stressed importance of...counseling. 
• As is likely case in most public meetings today, there were a few attendees who wanted to vent about TARP etc, and appeared to me that with several using hand held video, there may have an effort by some to play "gotcha". Despite repeated interruptions, Kotek kept the meeting civil and on track.
• My guess is about 25 attendees indicated personal experience in dealing with loan modifications. These attendees have specific stories about difficulties in working with loan servicers on loan modifications, with files lost, long delays, and inconsistent answers. Legal Aid and other reps response was to stress importance of documentation of contacts including names and dates/Kotek indicated willingness to look at any state legislation that might better help regulate servicers who clearly are part of the problem with HAMP program. 
• DCBS rep reminded attendees of new requirement to fully document income etc BEFORE family will be offered a trial modification under HAMP. (Prior practice of accepting into trial mod before full documentation may have contributed to high drop out rates from loan mod trials). 
• Pretty clear that NO one knew about volume of HAMP loan mods that HAVE occurred in Oregon or nationally (my most recent related post HERE) , and I heard only one person who MAY have received a permanent loan modification under HAMP. 
• Audience was given HAMP Admin website HERE as source of lender rules for HAMP program.  While this site is an authoritative source, material is so dense and lengthy that most consumers likely will feel lost (like I often feel when looking at HAMP guidance).
• Our Oregon has new "Oregon Hoodwinked" website HERE on Oregon foreclosures.

I encourage other attendees to add comments to this post on items I may have missed. 

Originally created and posted on the Oregon Housing Blog.

Schwarzenegger's Housing Proposal for Special Legislative Session: 90 Day Foreclosure Freeze/Mandatory Counseling for Non Traditional Loans.

As part of a special session called to deal with budget issue, California's Governor has included a number of housing related proposals. From press release from Governor's Office HERE:

"The Governor's plan improves upon other foreclosure-relief programs by incentivizing loan modifications. To reduce foreclosures and encourage loan modifications, the Governor proposes:

* A 90-day stay of the foreclosure processes for each owner-occupied home subject to a first mortgage on which a Notice of Default has been filed.
* A "Safe Harbor" under which lenders will be able to exempt themselves from the 90-day stay procedure altogether if they provide evidence to the state official that the lenders have an aggressive modification program in place. An "aggressive modification program" is one designed to keep borrowers in their homes where doing so will ultimately bring investors a better return than simply foreclosing and selling at a loss.
* Loan modification Model: modifications will be based on a 38% housing debt-to-income ratio so that the modified loan is sustainable for the homeowner. The lenders can achieve that 38% level by invoking some or all of the following modification plans:

1. reducing the interest rate to a lower rate for five years or more; e.g., to a rate as low as 3%;
2. increasing the amortization of the loan to 40 years from the start of the amortization period; and
3. deferring some amount of the unpaid principal balance to the end of the loan term, so that the borrower will repay that amount upon refinancing or sale of the property."

"...Governor Schwarzenegger's plan ensures more responsible lending so that Californians will never again be victimized by unsustainable loans. In order to prevent another mortgage crisis in the future, the Governor prescribes a set of proposals, including:

* The Department of Real Estate and Department of Corporations will now be able to enforce federal laws and regulations such as the Truth in Lending Act and others, and to discipline real estate licensees who violate those laws and regulations.
* Lending practices will be reformed to protect borrowers by expanding fiduciary duties for mortgage brokers so that borrowers can be assured they are getting a loan that suits their circumstances and penalizing lenders who make false or misleading statements.
* Licensing requirements for loan originators will be increased and standardized.
* California will contribute to a national database for the public to access license status and disciplinary records of all loan originators to prevent dishonest originators from victimizing consumers.
* Pre-counseling interviews will be required for borrowers entering into risky "non-traditional" mortgages, as defined by the federal government, to ensure they understand and accept the terms to which they are agreeing."

Note: A good summary of prior California related housing bills signed into law earlier this year can be found in this press release on the Governor's web site HERE.

New York Nears Approval of Sub Prime Mortgage Law.

Press release on passage of bill in the NY Senate is HERE. (Last week the NY Governor announced agreement to move bill forward, so it appears the bill will be soon signed into law).

I have extracted from NY legislative site this "Sponsors Memo " HERE highlighting key provisions of the bill (Bill number is S8143A).

First Look: California Senate Committee Stalls, Kills, or Waters Down Predatory Lending Bills.

First news account from SF Chronicle HERE on Wednesday night says that several predatory lending bills which were subject of my prior post HERE, were effectively stopped, defeated, or watered down in a California State Senate committee on Wednesday.

It is likely that as more information becomes available, I will be able to expand on specifics in a later post on Thursday or Friday.

Senate Commerce Subcommitee Hearing on Improved Consumer Protections in Sub Prime Lending.

Hearing was held yesterday, web page for hearing HERE includes witness testimony and web video archive of the hearing.

Witness testimony was presented from reps of Federal Trade Commission; Center for Responsible Lending; Attorney General, State of Connecticut; National Association of Consumer Advocates; American Financial Services Association.

New Pew Charitable Trusts Report on 50 State Foreclosure Efforts.

A new report HERE from the Pew Charitable Trusts Center on the States was published today reporting on efforts in all 50 states to deal with mortgage foreclosures.

State by state PDF factsheets are included in the report.

The Oregon fact sheet is HERE; the fact sheet for Washington is HERE; and the fact sheet for Idaho is HERE.

Oregon Data Sheet Doesn't Include '08 Legislation:
The Pew report data appears to be as of end of 2007 as the Oregon fact sheet reports that Oregon was one of only 9 states to have not taken action by that time. However, there was modest foreclosure related Oregon legislation that DID pass during the the special 2008 Oregon legislative session. That legislation is summarized, and links to legislative language are included, on the Oregon DCBS, Division and Finance and Corporate Securities web page HERE.

WSJ: State Sub Prime Refinancing Programs Aren't Helping Much.

Good story in Wall Street Journal about the slow use of various state home loan sub prime refinancing programs is HERE.

Story says loans closed in any state so far is small: Maryland,18, NY, 17; Ohio,37.

Program allowing mortgage revenue bonds to be used for refinancing, part of currently debated Senate housing bill, could offer some modest help by reducing interest on refinancing loans. Real problem however made be credit worthiness of borrowers who have fallen behind on payments of their existing loans and of course, amount of underlying loan vs. current market value of property.

WSJ Story on State Mortgage Aid Measures.

Interesting WSJ story HERE on what various states are doing on the foreclosure prevention front invites inevitable comparison with slowness of action from US Congress and the President.

Statewide Candidates Views on Housing

[Corrected format and hyperlink].
I have previously posted about the housing positions taken by Democratic presidential candidates, but haven't done so for other statewide candidates here in Oregon. In particular candidates for the Senate and for Attorney General come immediately to mind.

So today a initial examination on what's on the Attorney General candidates websites about housing.

Frankly, there wasn't much related to housing for either candidate. and most of what I found related to sub prime loan legislation. Greg Macpherson had details about bills he supported in the last [short] legislative session, while Kroger's housing related information was non specific.

(Since neither candidates websites have a built in search function I had to stumble through several sections of their sites to find anything about housing and then use a site limited Google search to check my results).

Greg Macpherson (http://www.votemac.com/)
His views on recent Oregon sub prime loan legislation are HERE


John Kroger (http://www.johnkroger.com/ )
"I will aggressively attack fraud and abuse in the home mortgage industry"

"As Attorney General, I will fight to ensure that veterans returning from the Iraq war receive the quality health care to which they are entitled and assistance returning to the civilian work force. If anyone discriminates against veterans in the job or housing markets, I will fight to hold them accountable."

Mass. Attorney General Gets Injunction Against Subprirme Lender.

Story HERE.

Makes you kinda wonder about action , or lack thereof, from Oregon Attorney General on predatory lending, no?

Real Audio File: Joint Oregon Committee Hearing on Predatory Lending.

For the moment, available only as Real Audio File (.rm), HERE. (Plays with free Real Media Player).

This is three hour audio file of last nights hearing on predatory lending before two Committees of Oregon Legislature : Senate Commerce and Labor and House Consumer Protection. File is 22 MB.

(If I can figure out how to later convert to MP3 I will and will repost).

Oregon Predatory Lending Bill Campaign Starting, New Website Created.

Willamette Week had interesting story about legislators support for an Oregon version of a predatory lending bill, with a PDF table showing support HERE. Prime sponsor is Ben Westlund , who is also running for State Treasurer.

The WW article references a bill number not yet on the Oregon legislative site, SB 1090. However the draft bill text is available as a PDF HERE.

I found that draft bill text on a NEW website established for the bill, The Responsible Homebuying Act, HERE. (You may want to bookmark this site to track future developments).
A list of bill supporters can be found HERE.