| Foreclosure Provisions |
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| Introduction |
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The Housing and Economic Recovery Act contained several provisions to counter many of the current and potential home foreclosures throughout the country. Many of these foreclosures nationwide were caused by sub-prime lending. The bill provided new regulations for lenders to guard against predatory lending.
The bill also provided new resources to help households at risk of foreclosure and households needing foreclosure counseling. In some areas, foreclosures and abandoned properties have caused property values in neighborhoods to decline.
The bill provides funds to state and local entities to acquire and rehabilitate foreclosed and abandoned properties to develop single or multi-family affordable housing. Restoring reliable housing to these properties will help stabilize neighborhoods and communities.
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| Foreclosure Prevention |
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The bill provides additional regulations for lenders to guard against predatory lending. The bill allows FHA insurance on refinancing of loans to avoid foreclosure.
The bill also makes refinancing an eligible private activity bond activity for 2008-2010 for adjustable rate single-family mortgages made after December 31, 2001, and before January 1, 2008, (where the bond issuer determines the refinancing is needed to avoid financial hardship to the borrower.) Currently OHCS does not have a refinancing program.
To utilize any new allocation of bond authority to its best advantage, the department is evaluating the new eligible activities under the act, along with the needs of affordable housing throughout the state.
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| Foreclosure Counseling |
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The Housing and Economic Recovery Act provides $180 million in additional resources for foreclosure counseling. It allocates $180 million to the Neighborhood Reinvestment Corporation (NRC - NeighborWorks) to remain available until September 30, 2008 for foreclosure mitigation activities.
The bill requires the NRC to use $30 million of the $180 million in counseling funds to make
grants to counseling intermediaries or to hire attorneys and assist homeowners with
legal issues directly related to the homeowner's foreclosure, delinquency, or short sale.
The bill requires that at least 15 percent of counseling funds be provided to
organizations that target minority and low-income homeowners for loss mitigation counseling services or to provide such services in neighborhoods with high concentrations of
minority and low-income homeowners.
Earlier in 2008, Oregon obtained a grant from NeighborWorks in the amount of $327,004 for foreclosure counseling. For information about this counseling program, contact an Oregon counselor at 1.800.723.3638.
The state will be applying for additional counseling dollars through NeighborWorks. OHCS will post any new allocation decisions and information on this website as they become available.
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