By Elliot Njus, The Oregonian
May 15, 2013
Foreclosure filings in Oregon’s largest counties dropped in April, the first major decline after months in rebound.
Numbers compiled from county records by Eugene-based foreclosure reseller Gorilla Capital show foreclosures filings fell 21 percent from March and 29 percent compared with numbers reported a year ago.
Foreclosure filings tend to move in fits and starts, but the decline could indicate foreclosure are beginning to level off following a year where shifts due to legal changes masked overall trends.
Filings have been on a mostly uninterrupted climb since September, with most of the increase in filings that indicate a foreclosure through the court system.
Foreclosures filed outside the court system — the usual method for foreclosing on a past-due mortgage since the 1950s — virtually came to a halt in mid-July as a foreclosure mediation program created by the Oregon Legislature took effect.
A week later, the Oregon Court of Appeals ruled lenders had to inscribe a loan’s ownership in county records before starting an out-of-court foreclosure. Most lenders had circumvented that system by recording ownership histories in an industry database called Mortgage Electronic Registration Systems, or MERS.
The changes led most banks to file their foreclosures in court instead, circumventing the mediation program and avoiding the recording requirement.
The court decision is on appeal to the Oregon Supreme Court, which banks hope will reject the ruling and affirm their practices. If the high court rules against lenders, the banking industry ask the Oregon Legislature to amend state law, a move opposed by consumer advocates.
In the meantime, a bill that would expand the foreclosure mediation program to include court-supervised foreclosures has passed in the Oregon Senate and is headed for a floor vote in the House.
Broader foreclosure trends are showing improvement. Fewer homeowners in Oregon and across the U.S. are behind on payments, according to data firm CoreLogic, and more homeowners are escaping foreclosure through loan modifications or short sales.
As of February, 5.2 percent of Oregon mortgages were delinquent, and 2.9 percent were actively in foreclosure.
— Elliot Njus
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