Legislation reinstating moratorium on Oregon residential foreclosures goes to Gov. Brown

By PETER WONG/Oregon Capital Bureau

Gov. Kate Brown is the final stop for a bill that reinstates a moratorium on Oregon residential foreclosures through June 30, and possibly to the end of this year if she chooses to extend it by executive order.

The House gave final approval on Wednesday to an amended House Bill 2009 by a 36-20 vote. The Senate approved it on May 17. The bill clarifies that a borrower must give notice to the lender of an inability to pay the mortgage — and show how the coronavirus pandemic affected the borrower’s ability to pay, such as a loss of job or income.

“We continued to work on the language as some concerns came up after this bill had passed the House,” Rep. Paul Holvey, D-Eugene, and the bill’s floor manager, said.

Brown imposed a moratorium by executive order at the outset of the coronavirus pandemic more than a year ago. A June 2020 special session of the Legislature wrote Brown’s order into law, and let her extend it by order through Dec. 31.

Unlike the original state moratorium, which applied to all properties, House Bill 2009 applies only to a total of five residential properties per owner. Each property can contain no more than four units. Commercial property is excluded.

The renewal by House Bill 2009 aligns with the June 30 deadline for a moratorium announced Feb. 25 by the Federal Housing Finance Agency, which regulates the federally backed mortgages that account for about 70% of all mortgages in Oregon.

The state bill would empower Brown to renew the state moratorium for up to two more quarters, but only if she gives notice of her orders by June 14 (before July 1) and Aug. 16 (before Oct. 1).

Any foreclosures initiated during the emergency period are stayed.

According to the Household Pulse Survey by the U.S. Census Bureau in March, an estimated 65,000 Oregon households were behind on their mortgages.

Congress approved mortgage assistance in December that will result in an estimated $40 million for Oregon, and its approval of President Joe Biden’s pandemic recovery plan in March will make available up to $100 million more for Oregon.

The Senate version also limits the exemptions for lenders to take part in the Oregon Foreclosure Avoidance Program. The current exemption applies to lenders that initiated less than 175 foreclosures in the prior year. The bill now applies the exemption only to lenders that, for 2021 and 2022, initiated less than 30 foreclosures in 2019.