Foreclosure scam law sails through the House

Portland Business Journal--2/14/08

Both Democrats and Republicans in Salem are taking credit for passing a bill that aims to protect Oregonians from predatory foreclosure scams.

House Bill 3630 passed the chamber unanimously as both sides seek credit for installing measures that protect homeowners going through the foreclosure process. The bill requires foreclosure consulting contracts to be in writing and provided to homeowners 24 hours in advance.

Foreclosure consultants also cannot purchase the home from their clients. Also, the homeowners working with the consultants must receive 82 percent of net proceeds from their homes' sales.

"This common sense legislation cracks down on scam artists who prey on homeowners facing foreclosure," said Rep. Bruce Hanna, R-Roseburg, the House minority leader, in a statement. "Rather than helping Oregonians, these scam artists obtain deeds from homeowners and immediately move to kick them out onto the street. HB 3630 prevents this unfair practice."

"The last thing a family facing foreclosure needs is to have its home stolen away by a so-called rescue scam," said Rep. Jeff Merkley, D-Portland, the House speaker, in a statement. "Instead of helping families find their way out of a mortgage they can't afford, these scams rip them off when they are financially at their most vulnerable."

The measure emerged from the Mortgage Work Group assembled last year by Gov. Ted Kulongoski, who convened the committee to craft mortgage industry reforms during the national subprime lending crisis.

The bill now goes to the Oregon Senate.

Posted February 14, 2008
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