A House panel is poised to extend a moratorium on Oregon foreclosures during the coronavirus pandemic, although the latest proposal is narrower than the law in effect until the end of last year.
The House Business and Labor Committee heard from both sides at an hourlong hearing Wednesday, March 3. Low-income housing advocates urged passage of House Bill 2009, which would end the moratorium on Sept. 1, unless Gov. Kate Brown chose by executive order to extend it to Dec. 31. But banks and credit unions opposed it or questioned the need for it.
House Speaker Tina Kotek, in a meeting with reporters on March 1, said she considered the bill unfinished business from last year's special sessions prompted by the pandemic. The Portland Democrat is a chief sponsor of the bill.
Committee Chairman Paul Holvey, D-Eugene, said an extension was delayed because of disagreements over the scope of a continued moratorium.
"We are moving this bill forward and making it retroactive to Dec. 31," Holvey, also a chief sponsor, said.
The original foreclosures moratorium passed in a special session June 26; Republicans cast most of the votes against it.
The latest bill would restrict the foreclosures moratorium to residential properties, no more than a total of five — a proposed amendment by Rep. Rob Nosse, D-Portland, would raise it to 10 — and each property could contain no more than four units. Greg Astley, speaking for the Oregon Restaurant and Lodging Association, urged the committee to restore commercial property.
"The commercial side is different," Sen. Lee Beyer, D-Springfield, said. "But what we do not want to see is a new filing of foreclosures by July."
For the bill
Housing advocates mentioned the Household Pulse survey conducted by the U.S. Census Bureau, which ranks Oregon 17th among the states in terms of people reporting they are behind on rent or mortgage payments and are at risk of eviction or foreclosure within two months.
Oregon's 38.1% of 153,402 surveyed online put it below Idaho (15th) but ahead of Nevada (19th). California and Washington ranked lower. The margin of error is 12.4 points, which means that the actual ratio of people at risk could be as low as 1 in 4 — or as high as 1 in 2.
"A lot more people are on the brink," Emily Reiman of DevNW told the committee. "Now is the time to act to prevent another foreclosure crisis."
Itzel Hernandez, program director for Hacienda Community Development Corp. in Portland, said the issue has disproportionate effects.
"Lower-income households have signed off already in higher numbers, as well as people in localities with large populations of Blacks and Hispanics and people in areas with high COVID infection rates," she said. "I am here to ask that you extend the foreclosure moratorium so that families can stay in their homes and do not have to choose between paying for basic necessities and keeping their homes."
Hernandez said the bill should require resolution conferences before a lender starts foreclosure proceedings.
Both organizations — Hacienda operates in the Portland metro area, and DevNW has an office in Oregon City — work with people with individual development accounts, which enable low-income households to obtain homes or pay for advanced education.
Also for the bill were the Oregon Housing Alliance and the Oregon Law Center.
Against the bill
Rep. Daniel Bonham, R-The Dalles, asked whether Oregon's high share of people at risk was related to the economic downturn or has been historically at that level. Rep. Bill Post, R-Keizer, questioned whether some homeowners are taking advantage of the moratorium to forgo mortgage payments.
Paul Cosgrove, speaking for the Oregon Bankers Association, said 70% of Oregon mortgages already fall under a federal foreclosure moratorium that is scheduled to end June 30. (The state bill would cover the other 30%.)
"We believe this bill is not only unnecessary, but will discourage future extensions of credit," he said.
Cosgrove also said Oregon stands to get $40 million from the federal government for homeowner assistance, and the possibility of more from President Joe Biden's $1.9 trillion pandemic recovery plan, which is making its way through Congress.
"We have problems," Cosgrove said. "But they are not as bad as they are in other states."
Lobbyists for the Northwest Credit Union Association said they had multiple questions about the need for the bill.
"The bigger issue is that people are falling back" on the moratorium, rather than meeting with lenders to work out payment plans, said Hal Scoggins, a Portland lawyer whose firm testified for the credit unions.
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