Foreclosure talks break down in Ore. Legislature

Foreclosure measures appear dead after negotiations break down in Oregon Legislature

Associated Press

SALEM, Ore. (AP) -- Legislation intended to help homeowners facing foreclosure appeared dead Monday as both Oregon Republicans and Democrats said negotiations had broken down.

Each party blamed the other for the breakdown. They agreed, however, that they couldn't reach consensus on the role that financial counselors should play in the foreclosure process and whether borrowers should be able to force their lender into mediation.

Democrats said all struggling homeowners should be able require their bank to meet with a professional mediator and try to hammer out an agreement that could work for both sides.

"We don't want to provide a barrier to people speaking with their lender," said Rep. Tina Kotek, D-Portland.

Republicans argue that the process can't help many homeowners, so people who are struggling should meet with a financial counselor who would decide whether to mediate or try to help in a different way.

"I just can't in good conscience vote for a bill with mandatory mediation and pretend we have a victory in the foreclosure crisis," Rep. Matt Wand, R-Troutdale, said.

The parties also disagreed on other issues, including how to use Oregon's $30 million share of a settlement with mortgage lenders over foreclosure practices.

Foreclosures have been a hot topic for lawmakers in an election year, and newspaper editorial pages have issued fierce calls for action on the topic.

Kotek and Wand both said they're willing to kick start negotiations again, but no meetings were scheduled.

The House was negotiating on two Senate-passed bills.

Senate Bill 1552 would enact the mandatory mediation standards sought by Democrats. The legislation is modeled after similar laws in California, Nevada and Washington, proponents say.

Senate Bill 1564 would outlaw a practice known as the "dual-track" process, where lenders work on loan modifications and foreclosure processes at the same time. It also would allow homeowners in some circumstances to sue for damages under the Unlawful Trade Practices Act.

The state constitution gives lawmakers until next week to wrap up their work, but they're trying to finish by Wednesday. Legislative leaders are feverishly negotiating in private on a variety of issues other than foreclosures, including some of Gov. John Kitzhaber's health care and education initiatives along with Republican proposals to withdraw more water from the Columbia River.

Proponents of those ideas said they were still alive as of Monday evening. With the House split 30-30 between Republicans and Democrats, leaders of both parties must sign off before legislation can advance.

Lawmakers also continued debating which construction projects to fund with lottery bonds.

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