Today the Oregon legislature gave final approval by a unanimous vote to HB 3610-A, which will provide homeowners facing foreclosure with more tools with which to pursue a loan modification. The legislation does two things:

1) Provides a 5-day window prior to the sale of a home at foreclosure within which the affidavit of compliance with the mortgage modification provisions required by 2009’s Senate Bill 628 must be filed. Current law would allow the affidavit to be filed later in the day after a foreclosure sale.

2) Requires that when lenders deny a homeowner’s request for a loan modification, the notice of denial must provide an explanation of how the lender calculated eligibility for the loan modification. Providing a homeowner with an explanation will help that homeowner make informed decisions about best options. In some cases, the explanation given may alert the homeowner to lender errors, which may then be corrected.

The bill now goes to Governor Kulongoski for his signature.

OSPIRG thanks and commends the Oregon Legislature for taking action to ensure that when a homeowner facing foreclosure is denied a loan modification, they get both enough information and time to correct any errors that may have led to that denial. This bill also will ensure that lenders are actually doing all the calculations they are required to under the federal HAMP program, which is intended to help homeowners avoid foreclosure.

While more could still be done to help Oregonians stay in their homes, we feel this is a solid step forward to stabilize Oregon’s housing market.