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Foreclosure Rates Expected to Increase Throughout State

pamplinmedia.com | April 27, 2014

By Jason Chaney

For several counties across Oregon, the rate of foreclosures has experienced a substantial uptick.

Statistics compiled by Gorilla Capital, one of the primary purchasers of distressed real estate in the country, show that the number of filings have increased from 395 in February to 566 in March.

“As predicted, foreclosures continued to climb in the first quarter of the year as borrowers began exiting the state-legislated mediation process enacted last August,” said Gorilla Capital CEO John Helmick. “Many of the foreclosures filed last month probably began the mediation process as far back as fall 2013.”

Despite the uptick throughout the state, Crook County has not yet seen a spike in its foreclosure numbers. Of the 474 court foreclosures filed statewide in March, only five occurred locally.

“The more rural areas of Oregon did not have the huge price increases we saw in the metropolitan areas (during the housing boom), therefore they didn’t see as many foreclosures,” Hemlick said.

That does not mean that Crook County will continue to see few foreclosures. Because of two bills passed during the past two years, many lenders have waited to file until the laws governing foreclosures were sorted out.

Senate Bill 1522, which took effect in the summer of 2012, was intended to require mediation between banks and homeowners during the foreclosure process. However, the law did not require mediation for judicial foreclosures, prompting many banks to go that route and skip the mediation requirement.

To fix the loophole, the Legislature passed Senate Bill 558A, which added the mediation requirement to judicial foreclosures.

“That has caused a huge backlog,” Helmick said. “Oregon will lag behind the rest of the country because we have not processed through the distressed, abandoned, vacant homes out there.”

Gorilla Capital does not compile backlog foreclosure statistics for individual counties, but Helmick said that they counted about 8,000 in Oregon. Another 25,000 are waiting for a compliance certificate from mediation before they can be filed.

“There is an artificial lull in foreclosures that occurred because of these legislative changes,” he said.

Once the amount of foreclosures increases, the presence of the lower-priced homes could once again drive down house prices. While that is true, Helmick does not expect the same substantial drop in the market that occurred during the recession.

“If the interest rate goes up, that is a drag on home price depreciation,” he said. “A one-point increase in interest rates would be much more of a drag (on home prices) than the foreclosure situation.”

While the foreclosure rate hike has yet to reach Crook County, once it does, Helmick said it could stick around for several months.

“This increase will continue for the rest of this year,” he said. “We will be one of the few states that have more foreclosures in 2014 than 2013.”

 

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CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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