Focus on foreclosures

When Oregon lawmakers gather in Salem for their February session, they must take the time and summon the will to save thousands of homeowners from foreclosure.

Yes, the legislative agenda is packed, including rebalancing a crippled state budget and pushing ahead with health care and education reforms. And yes, the banking industry lobbyists keep telling legislators to move along, that there's nothing to do or see here.

But there is. The lingering housing crisis is still getting worse, not better. Foreclosure starts fell across the West Coast in December, but they kept rising in Oregon. Portland-area home prices fell to an 11-year low last year, driven down by foreclosures, according to the Regional Multiple Listings Service. Already, one in four Oregon homeowners is underwater, owing more than their home is worth. One out of 11 is in foreclosure or behind in payments.

If lawmakers move housing to the front of the line of issues before them in February, Oregon can keep many more of these families in their homes and out of foreclosure. Other states have demonstrated that pre-foreclosure mediation, stronger mortgage servicing rules and other new housing regulations increase settlements and reduce foreclosures.

Twenty-one states, including neighboring Washington, require mandatory foreclosure meetings that are conducted by a neutral third party and require lenders to send a representative with true decision-making authority. In well-established programs, settlements between lenders and homeowners are reached more than 50 percent of the time, according to Economic Fairness Oregon, a consumer advocacy group.

The group has lined up bipartisan support for a similar pre-foreclosure mediation bill in Oregon. In terms of impact on desperate homeowners, and on the state's limping housing market, it's the most important bill before lawmakers this February. We strongly urge House and Senate leaders to make it a priority.

Another housing bill would prohibit what's known as the dual track process, where lenders go forward with the foreclosure process at the same time they are supposedly considering loan modification or forbearance. A third proposal would strengthen mortgage servicing rules and require a single point of contact for borrowers in default. It's time to put an end to the cruel practice of forcing borrowers to wade through phone trees only to be shuttled among various secretaries and loan representatives.

We recognize that the housing crisis is an old story — it's been four long years since the bubble burst. And it's always tempting for lawmakers to punt housing and banking regulations on to Congress. In fact, states have exclusive control of foreclosure laws. Moreover, there ought to be fresh impetus in Salem for learning from other states, instituting pre-foreclosure mediation and stopping the foreclosure landslide.

Housing lies at the core of the economic collapse that has so rocked Oregon and the rest of the country. History will record whether lawmakers did everything they could during the worst housing crisis since the Depression to help Oregonians save their homes.

So far, they have not. But February offers another chance — not only for lawmakers, but for thousands of Oregonians struggling to save their homes.

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