Bill Text: OR SB367 | 2013 | Regular Session | Introduced

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Bill Title: Relating to foreclosures of residential trust deeds; declaring an emergency.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2013-07-08 - In committee upon adjournment. [SB367 Detail]

Download: Oregon-2013-SB367-Introduced.html

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     77th OREGON LEGISLATIVE ASSEMBLY--2013 Regular Session

NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .

LC 1583

                         Senate Bill 367

Sponsored by Senator BATES (Presession filed.)

                             SUMMARY

The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.

  Requires person that brings suit to foreclose residential trust
deed to enter into mediation with grantor before bringing suit.
Provides exceptions.
  Requires person to serve on or mail to grantor notice of
mediation at least 120 days before bringing suit to foreclose
residential trust deed.
  Declares emergency, effective on passage.

                        A BILL FOR AN ACT
Relating to foreclosures of residential trust deeds; amending ORS
  88.010 and sections 2, 3, 4 and 4a, chapter 112, Oregon Laws
  2012; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. Section 2, chapter 112, Oregon Laws 2012, is amended
to read:
   { +  Sec. 2. + } (1) As used in this section and sections 3
and 4a { + , chapter 112, Oregon Laws 2012, + }   { - of this
2012 Act, - }  'foreclosure avoidance measure' means an agreement
between a beneficiary and a grantor that uses one or more of the
following methods to modify an obligation that is secured by a
trust deed:
  (a) The beneficiary defers or forbears from collecting one or
more payments due on the obligation.
  (b) The beneficiary modifies, temporarily or permanently, the
payment terms or other terms of the obligation.
  (c) The beneficiary accepts a deed in lieu of foreclosure from
the grantor.
  (d) The grantor conducts a short sale.
  (e) The beneficiary provides the grantor with other assistance
that enables the grantor to avoid a foreclosure.
  (2)(a) Except as provided in paragraph (d) of this subsection,
a beneficiary that seeks to foreclose a residential trust deed
under ORS 86.735 { +  or 88.010 + } shall enter into mediation
with the grantor for the purpose of negotiating a foreclosure
avoidance measure in accordance with the provisions of this
section.
  (b) The Attorney General shall:
  (A) Appoint a mediation service provider to coordinate a
mediation program and shall enter into an agreement to pay the
mediation service provider for the mediation service provider's
services from the Foreclosure Avoidance Mediation Fund
established in section 4 { + , chapter 112, Oregon Laws 2012 + }
 { - of this 2012 Act - } .  The appointment and the agreement
are not subject to ORS chapter 279A or 279B.
  (B) Prescribe qualifications, training and experience
requirements for mediators by rule.
  (C) Set the schedule of fees for the mediation by rule.
  (c) The beneficiary and the grantor shall share the cost of the
mediation, except that the grantor's portion of the cost may not
exceed $200. The mediator may waive the grantor's portion of the
fee in accordance with rules that the Attorney General adopts to
describe circumstances that permit a waiver.
  (d) The requirement to enter into mediation with a grantor does
not apply:
  (A) To an individual, a financial institution, as defined in
ORS 706.008, a mortgage banker, as defined in ORS 86A.100, or a
licensee, as defined in ORS 725.010, if the individual, financial
institution, mortgage banker or licensee provides to the Attorney
General a sworn affidavit that states that during the preceding
calendar year the individual, financial institution, mortgage
banker or licensee did not commence or cause an affiliate or
agent of the individual, financial institution, mortgage banker
or licensee to commence more than a total of 250 actions to
foreclose a residential trust deed by advertisement and sale
under ORS 86.735 or a residential mortgage by suit under ORS
88.010. An individual, financial institution, mortgage banker or
licensee that intends to claim an exemption under this
subparagraph shall file the affidavit either:
  (i) Within 30 days after   { - the operative date specified in
section 11 of this 2012 Act - }   { + July 11, 2012, + } to claim
the exemption for calendar year 2012 and not later than January
31 in any subsequent calendar year in which the individual,
financial institution, mortgage banker or licensee intends to
claim the exemption; or
  (ii) At the time the individual, financial institution,
mortgage banker or licensee files a notice of default under ORS
86.735 { +  or at least 120 days before the individual, financial
institution, mortgage banker or licensee or an agent of the
individual, financial institution, mortgage banker or licensee
brings suit to foreclose a residential trust deed under ORS
88.010 + }.
  (B) If the grantor fails to confirm that the grantor will enter
into mediation by the date specified under subsection (3)(c) of
this section.
  (3) Within 30 days after the date on which the beneficiary
caused a notice of mediation to be served or mailed as provided
in ORS 86.740 { +  or 88.010 (2)(b)(A) + }, the mediation service
provider shall send a notice to the grantor and the beneficiary
that:
  (a) Schedules a date, time and location for the mediation.  The
date must be not earlier than 45 days and not later than 90 days
after the date on which the notice of mediation was served or
mailed as provided in ORS 86.740 { +  or 88.010 (2)(b)(A) + }.
  (b) Identifies and provides contact information for the
mediation service provider.
  (c) Specifies a date at least 30 days before the scheduled date
of the mediation by which the grantor must contact the mediation
service provider to confirm that the grantor will enter into
mediation. The notice must state that the mediation service
provider will deem the grantor to have declined to enter into
mediation if the grantor fails to confirm by the specified date.
  (d) Lists the costs of the mediation and specifies the portion
of the costs for which the grantor is responsible.
  (e) Provides any other information that the Attorney General
requires by rule.
  (4)(a) If the grantor confirms by the date specified under
subsection (3)(c) of this section that the grantor will enter
into mediation, the beneficiary or the beneficiary's agent shall
appear at the time and the location identified in the mediation
service provider's notice under subsection (3) of this section
with the documentation described in paragraph (b) of this
subsection.
  (b) The beneficiary or the beneficiary's agent must appear in
person at the location of the mediation unless the mediator
permits the beneficiary or the beneficiary's agent to appear in
another manner for good cause shown. The fact that a beneficiary
or beneficiary's agent is located outside this state does not
alone constitute good cause for the purposes of this paragraph.
The beneficiary or the beneficiary's agent must appear at the
mediation with:
  (A) The grantor's complete payment history for the obligation
that is secured by the residential trust deed that the
beneficiary seeks to foreclose;
  (B) Evidence that the beneficiary is the real party in interest
with respect to the obligation, including but not limited to:
  (i) A true copy of the original debt instrument that is the
basis for the right the beneficiary claims to foreclose the trust
deed; and
    { - (ii) Documents that show the chain of title for the
property that is subject to the residential trust deed from the
date of the original loan for which the beneficiary seeks
foreclosure to the date of the notices given under ORS 86.740,
including conveyances, endorsements and assignments of the
residential trust deed, the note and the security instrument,
whether recorded or unrecorded; - }
   { +  (ii) Documents that show the chain of title for the
property that is subject to the residential trust deed, including
conveyances, endorsements and assignments of the residential
trust deed, the note and the security instrument, over a period
of time that begins on the date of the original loan the
beneficiary seeks to foreclose and ends on the date on which the
notices were given under ORS 86.740 or 88.010 (2)(b)(A); + }
  (C) A copy of the authorization from the beneficiary to the
beneficiary's agent, if the beneficiary's agent appears at the
mediation;
  (D) A copy of any of the following documents that apply to the
note or obligation that is secured by the trust deed:
  (i) A servicing agreement the beneficiary entered into with
another person; or
  (ii) An agreement by means of which the beneficiary pledged as
collateral for a security the beneficiary issued or sold all or a
portion of the ownership interest in the note or other
obligation; and
  (E) Other documentation the Attorney General specifies by rule.
  (c) The beneficiary or the beneficiary's agent that enters into
mediation with the grantor must have or be able to obtain, before
the initial mediation session concludes, authority to accept or
reject a proposal for a foreclosure avoidance measure and
authority to enter with the grantor into an agreement for a
foreclosure avoidance measure.
  (5)(a) The beneficiary or the beneficiary's agent must enter
into mediation in accordance with mediation guidelines the
Attorney General establishes by rule.
  (b) If the beneficiary or the beneficiary's agent agrees with
the grantor on a foreclosure avoidance measure, the beneficiary
or beneficiary's agent and the grantor shall set forth the terms
of the foreclosure avoidance measure in a written agreement, a
copy of which the beneficiary or beneficiary's agent shall
provide to the Attorney General. The beneficiary may elect to pay
the grantor's portion of the cost of the mediation or the grantor
and the beneficiary may agree to include the cost of the
mediation as part of and in accordance with any payment plan that
is part of the foreclosure avoidance measure.
  (c) If the beneficiary or the beneficiary's agent and the
grantor do not agree on a foreclosure avoidance measure, the
mediation service provider shall notify the Attorney General that
the mediation did not result in an agreement.
  (6)(a) At the conclusion of the mediation, if the beneficiary
has complied with the requirements of subsections (4) and (5) of
this section, the mediation service provider shall provide the
beneficiary or the beneficiary's agent with a certificate of
compliance in a form and with contents that the Attorney General
specifies by rule. The certificate must state that the
beneficiary has complied with the requirements of this section.
  (b) If the grantor does not confirm by the date specified under
subsection (3)(c) of this section that the grantor will enter
into mediation, the mediation service provider shall provide the
beneficiary or the beneficiary's agent with a certificate of
compliance in a form and with contents that the Attorney General
specifies by rule. The certificate must state that the grantor
declined to enter into mediation with the beneficiary.
  (c) The mediation service provider shall provide a copy of the
certificate the mediation service provider issues under paragraph
(a) or (b) of this subsection to the grantor and to the Attorney
General.
  (7)(a)   { - A grantor that is at risk of default - }  { +
If, + } before the beneficiary or the trustee has filed a notice
of default for recording under ORS 86.735 { +  or brought suit to
foreclose the residential trust deed under ORS 88.010, the
grantor has failed for 30 days or more to make a regular periodic
payment for the obligation that is secured by the residential
trust deed or the grantor is otherwise at risk of default, the
grantor + } may notify the beneficiary or trustee in the trust
deed or the beneficiary's or trustee's agent that the grantor
wants to enter into mediation.  Within 15 days after receiving
the request, the beneficiary or trustee or the beneficiary's or
trustee's agent shall respond to the grantor's request and shall
notify the Attorney General and the mediation service provider
identified in subsection (2)(b) of this section. The response to
the grantor must include contact information for the Attorney
General and the mediation service provider.
  (b) A grantor that requests mediation under paragraph (a) of
this subsection may also notify the Attorney General and the
mediation service provider of the request. The Attorney General
shall post on the Department of Justice website contact
information for the mediation service provider and an address or
method by which the grantor may notify the Attorney General.
  (c) Within 10 days after receiving notice of the request under
paragraph (a) of this subsection, the mediation service provider
shall send a notice to the grantor and the beneficiary that,
except with respect to the date by which the mediation service
provider must send the notice, is otherwise in accordance with
the provisions of subsection (3) of this section.
  (d) A beneficiary or beneficiary's agent that receives a
request under paragraph (a) of this subsection is subject to the
same duties as are described in subsections (2), (4) and (5) of
this section.
  SECTION 2. Section 3, chapter 112, Oregon Laws 2012, is amended
to read:
   { +  Sec. 3. + } The notice of mediation required under ORS
86.740 (1)(b) { +  or 88.010 (2)(b)(A) + } must be in a form and
with the contents the Attorney General specifies by rule and
must:
  (1) List the name, address, telephone number and other contact
information for the grantor or other person named in the
residential trust deed.
  (2) Specify the account number or other means by which the
beneficiary or trustee or an agent of the beneficiary or trustee

identifies the obligation that is secured by the residential
trust deed.
  (3) Provide the address, telephone number and other contact
information for:
  (a) The beneficiary or an agent of the beneficiary that the
beneficiary authorizes to negotiate on the beneficiary's behalf;
  (b) The Oregon State Bar's Lawyer Referral Service;
  (c) Service agencies or other providers that offer free or
low-cost legal services from a list of agencies or providers that
the Attorney General adopts by rule; and
  (d) A list of not-for-profit housing counselors approved by the
United States Department of Housing and Urban Development or an
agency of this state.
  (4) State that section 2 { + , chapter 112, Oregon Laws
2012, + }   { - of this 2012 Act - }  requires the beneficiary to
enter into mediation with the grantor for the purpose of
negotiating a foreclosure avoidance measure.
  (5) List the documents the grantor must bring to the mediation.
The Attorney General by rule shall specify the documents the
grantor must bring.
  (6) State that the grantor may choose to have an attorney or a
housing counselor approved by the United States Department of
Housing and Urban Development represent the grantor at the
mediation.
  (7) State the costs of the mediation and specify the maximum
cost for which the grantor will be responsible.
  (8) State that the mediation and mediation communications, as
defined in ORS 36.110, are confidential in accordance with and to
the extent provided in ORS 36.220 to 36.238.
  (9) State that within 30 days after the date of the notice a
mediation service provider will send another notice to the
grantor with a date, time and location for the mediation and with
the other information specified in section 2 (3) { + , chapter
112, Oregon Laws 2012 + }   { - of this 2012 Act - } .
  SECTION 3. Section 4, chapter 112, Oregon Laws 2012, is amended
to read:
   { +  Sec. 4.  + }(1) The Foreclosure Avoidance Mediation Fund
is established in the State Treasury, separate and distinct from
the General Fund. The fund consists of moneys the Attorney
General collects or receives for the purpose of paying the
expenses of coordinating a mediation program under section
2 { + , chapter 112, Oregon Laws 2012, + }   { - of this 2012
Act - }  and related expenses. The moneys in the fund are
continuously appropriated to the Attorney General for the
purposes of paying the expenses of coordinating the mediation
program and related expenses.
  (2) The Attorney General may receive moneys for the purposes
set forth in subsection (1) of this section from any public or
private source.
  (3)(a) Except as provided in paragraph   { - (b) - }
 { + (c) + } of this subsection, a trustee or beneficiary that
files a notice of default under ORS 86.735 shall pay to the
county clerk that records the notice $100 in addition to and not
in lieu of any fee that the county clerk charges for recording
the notice of default.  The county clerk at the end of each month
shall forward the proceeds of the $100 charge to the Attorney
General for deposit into the fund described in subsection (1) of
this section.
   { +  (b) Except as provided in paragraph (c) of this
subsection, a beneficiary that brings suit to foreclose a
residential trust deed under ORS 88.010 shall on the same date on
which the beneficiary brings the suit remit to the Attorney
General a fee of $100, which the Attorney General shall deposit
into the fund described in subsection (1) of this section. + }
    { - (b) - }   { + (c) + } An individual, a financial
institution, as defined in ORS 706.008, a mortgage banker, as
defined in ORS 86A.100, or a licensee, as defined in ORS 725.010,
is not subject to the $100 charge described in paragraph (a)
 { + or (b) + } of this subsection if the individual, financial
institution, mortgage banker or licensee provides to the county
clerk a sworn affidavit that states that during the preceding
calendar year the individual, financial institution, mortgage
banker or licensee did not commence or cause an affiliate or
agent of the individual, financial institution, mortgage banker
or licensee to commence more than a total of 250 actions to
foreclose a residential trust deed by advertisement and sale
under ORS 86.735 or a residential mortgage by suit under ORS
88.010. An individual, financial institution, mortgage banker or
licensee that intends to claim an exemption under this paragraph
shall provide the affidavit either:
  (A) Within 30 days after   { - the operative date specified in
section 11 of this 2012 Act - }   { + July 11, 2012, + } to claim
the exemption for calendar year 2012 and not later than January
31 in any subsequent calendar year in which the individual,
financial institution, mortgage banker or licensee intends to
claim the exemption; or
  (B) At the time the individual, financial institution, mortgage
banker or licensee files a notice of default under ORS
86.735 { +  or brings suit to foreclose a residential trust deed
under ORS 88.010 + }.
  SECTION 4. Section 4a, chapter 112, Oregon Laws 2012, is
amended to read:
   { +  Sec. 4a. + } (1)(a) If a beneficiary determines that a
grantor is not eligible for any foreclosure avoidance measure or
that the grantor has not complied with the terms of a foreclosure
avoidance measure to which the grantor has agreed, the
beneficiary or the beneficiary's agent, at least 30 days before
the date specified for the trustee's sale in a notice served
under ORS 86.740 or 86.755 (2)(b)  { - , - }  { +  or at least 30
days before the first scheduled proceeding in a suit to foreclose
the residential trust deed under ORS 88.010, + } shall notify the
grantor in writing of the beneficiary's determination and shall
cause the notice to be served as provided in ORS 86.740 (1).
  (b) The notice must in plain language explain the basis for the
beneficiary's determination.
  (2) The beneficiary or the beneficiary's agent shall mail a
copy of the notice of the determination described in subsection
(1) of this section to the Department of Justice on the same date
on which the notice is served.
  (3)(a) At least 20 days before the date specified for the
trustee's sale in a notice served under ORS 86.740 or 86.755
(2)(b)  { - , - }   { + or at least 20 days before the first
scheduled proceeding in a suit to foreclose the residential trust
deed under ORS 88.010, + } the beneficiary or the beneficiary's
agent shall:
  (A) Record in the mortgage records for the property that is
subject to the trustee's sale, in the county or in one of the
counties in which the property is located, an affidavit that
states that the beneficiary has complied with the requirements
set forth in subsections (1) and (2) of this section; and
  (B) Mail a copy of the affidavit to the department.
  (b) The affidavit described in paragraph (a) of this subsection
must:
  (A) Identify the property that is the subject of the trustee's
sale;
  (B) Identify the grantor and, as of the date of the affidavit,
the trustee and the beneficiary;
  (C) State that the beneficiary or beneficiary's agent has
complied with the requirements set forth in subsections (1) and
(2) of this section; and
  (D) Include proof of service on the grantor for the notice
described in subsection (1) of this section.
  (4) The Attorney General by rule shall specify a form for and
the contents of the notice of the determination described in
subsection (1) of this section and shall identify an address to
which the beneficiary or beneficiary's agent must mail the copy
of the notice under subsection (2) of this section and the
affidavit under subsection (3) of this section.
  (5)(a) A beneficiary or an agent of the beneficiary that fails
to comply with the provisions of this section is liable to the
grantor in the amount of $500 plus the amount of the grantor's
actual damages for each failure to comply with a provision of
this section.
  (b) A grantor may bring an action against a beneficiary or an
agent of the beneficiary in a circuit court of this state to
recover the amounts described in paragraph (a) of this
subsection.  The grantor shall commence the action within two
years after the date on which the beneficiary or the
beneficiary's agent should have complied, but did not comply,
with the provisions of this section.
  (c) Notwithstanding an agreement to the contrary, a court may
award reasonable attorney fees, costs and disbursements to a
grantor that obtains a final judgment in the grantor's favor.
  SECTION 5. ORS 88.010 is amended to read:
  88.010.  { + (1) + } Except as otherwise provided by law,
a { +   + }lien upon real or personal property, other than that
of a judgment, whether created by mortgage or otherwise,
 { - shall - }  { +  must + } be foreclosed, and the property
adjudged to be sold to satisfy the debt   { - secured thereby - }
 { +  the lien secures, + } by   { - a - }  { +  bringing + }
suit. Except as provided in ORS 88.070, in addition to the
judgment of foreclosure and sale, if { +  the lien debtor or
another person, as principal or otherwise, has given + } a
promissory note or other personal obligation   { - for the
payment of - }  { +  to repay + } the debt   { - has been given
by the lien debtor or any other person as principal or
otherwise - } , the court also shall enter a judgment for the
amount of the debt against the   { - person or persons - }  { +
lien debtor or other person + }. The provisions of this chapter
as to liens upon personal property   { - are not intended to - }
 { +  do not + } exclude a person   { - having such - }  { +
that has a + } lien from any other remedy or right   { - in
regard - }  { +  with respect + } to
  { - such - }  { +  the + } property { +  that the person
otherwise has + }.
   { +  (2)(a) A person may not proceed under this section with a
suit to foreclose a residential trust deed unless the person has
complied with applicable provisions of sections 2, 3, 4 and 4a,
chapter 112, Oregon Laws 2012, or unless the person is exempt
under section 2 (2)(d), chapter 112, Oregon Laws 2012, from a
requirement to enter into mediation with the grantor.
  (b) For the purposes of the requirement in paragraph (a) of
this subsection, a person has not complied with applicable
requirements of sections 2, 3, 4 and 4a, chapter 112, Oregon Laws
2012, if the person has not:
  (A) Served a notice of mediation in the form and with the
contents described in section 3, chapter 112, Oregon Laws 2012,
as provided in ORCP 7 D(2) and 7 D(3), or mailed the notice by
both first class and certified mail with return receipt
requested, at least 120 days before bringing suit under this
section;
  (B) Responded to a grantor's request for mediation as provided
in section 2 (7), chapter 112, Oregon Laws 2012;
  (C) Filed for recording in the official records of the county
or counties in which the property that is subject to the
residential trust deed is located the certificate of compliance
the person received under section 2, chapter 112, Oregon Laws
2012; or
  (D) Remitted to the Attorney General the fee described in
section 4 (3)(b), chapter 112, Oregon Laws 2012, unless the
person is exempt from the fee under section 4 (3)(c), chapter
112, Oregon Laws 2012.
  (c) Notwithstanding a person's exemption under section 2
(2)(d), chapter 112, Oregon Laws 2012, from the requirement to
enter into mediation with a grantor, the person may not proceed
with a suit to foreclose a residential trust deed under this
section unless the person has complied with the provisions of
section 4a, chapter 112, Oregon Laws 2012. + }
  SECTION 6.  { + This 2013 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2013 Act takes effect on its
passage. + }
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