The 160-Day Sausage Grind

Shawn Miller

“Laws are like sausages, it is better not to see them being made.”
-Otto von Bismarck

The Oregon legislature is approaching the finish line of its 160-day sausage grind. However gruesome it may be—it’s better to be part of the process than to sit on the sidelines.

The Legislature convenes annually in Salem, but sessions may not exceed 160 days in odd-numbered years and 35 days in even-numbered years. Five-day extensions are allowed by a two-thirds vote in each house.

2013 is an odd legislative year—in more ways than one!—which means a long 160 days that start on February 4th until July 13th (June 28th is leadership’s target to adjourn).  Democrats control both chambers of the legislature, as well as the Governor’s office.  The Democrats hold a clear majority in the House of Representatives at 34-26, and the Senate has proclaimed itself as the “moderate” chamber with its tight 16-14 Democrat majority. 

The 2013 Legislature is still looking for its identity with most of the big issues still to come.  Balancing the budget hinges on further public employee retirement system (PERS) reforms pushed by Republicans and increased taxes and/or limiting tax breaks to balance the budget pushed by Democrats.  Although the House and Senate will consider around 2700 bills introduced this session, the legislature is only constitutionally bound to do one thing: balance the budget.

UTA is lobbying a few key bills this session that would affect trustees and the foreclosure process:

Senate Bill 558 Foreclosure Mediation Process
SB 558A expands and modifies the mandatory mediation program created by SB 1552 (2012) to include both nonjudicial and judicial foreclosures. Negotiations on this bill in the Senate were intense and prolonged, and ultimately resulted in the -20 amendment, which was adopted by the committee, and the bill passed the Senate 22-7 (1 excused) and passed the House on 45-12 (3 excused). While UTA has identified multiple issues with this bill, the main issue is with the one-year expiration on the certificate of compliance. The first hearing on SB 558A in the House Consumer Protection Committee was last week, and Teresa Shill of RCO Legal testified to put UTA's concerns on the record. The Chair, Rep. Paul Holvey (D-Eugene), does not intend to adopt amendments, as he believes the Senate would not concur. We worked with Sybil Hebb of the Oregon Law Center to get clarification on the record that an unexpired certificate of compliance is only needed at the time of filing, not through the entire foreclosure process. Chair Holvey has also agreed to put that clarification on the record on the House floor, and the Attorney General's office has confirmed that they agree with that interpretation of the language. There will be an advisory committee for rulemaking at the AG's office, and Michelle Mierzwa and Victoria Adams of Cal-Western Reconveyance are planning to attend by phone. Many of our concerns about this program should be able to be addressed in rule. If a legislative fix is needed after the program is implemented, the Chair would entertain a bill in February 2014.

House Bill 2929 Trustee’s Sale and Rescission
HB 2929A establishes specific circumstances in which a trustee may rescind a sale, and requires notice of a rescinded sale and refund to the purchaser within 10 days. The bill also requires trustees at financial institutions, trust companies and title insurance companies to maintain registered agent with the Department of Consumer and Business Services, and file a statement with the Secretary of State. The bill was amended from its original version with the -2 and -4 amendments, which removed the fines for violations and made technical changes. The House Committee on Consumer Protection and Government Efficiency passed the amended bill out of committee with a do pass recommendation on a party line vote; Republicans opposed the bill because they believe there should be additional sideboards on the ability of the trustee to rescind the sale. The Chair was open to additional amendments, but due to the deadlines to work the bill in the House, he asked proponents to amend the bill on the Senate side. The bill passed the House 33-26 (1 excused), and has been scheduled for its first hearing in the Senate General Government, Consumer and Small Business Protection Committee on May 22. We will work with the proponents to make sure the sideboards are acceptable to UTA.

House Bill 3499 Meth Notice
House Bill 3499, as originally drafted, prohibits beneficiary or trustee, or beneficiary's or trustee's agent, from selling or offering for sale real property acquired as result of foreclosing residential trust deed unless beneficiary or trustee, or beneficiary's or trustee's agent, tests real property for contamination from methamphetamine manufacturing and discloses test results in writing to prospective purchaser.  UTA and the Bankers Association are working with the sponsor, Rep. Whitsett and Rep. Berger, to amend the bill to only require a notice disclaimer to explain that no warranty or representation is made as to whether the property has been tested for meth, etc. The policy objective of the disclosure is buyer beware.

House Bill 3489 Loan Refinance Assistance
HB 3389 as introduced was a back-up bill to SB 558. It was sent to Rules to be used as a gut and stuff for a fix to the existing loan refinance assistance pilot project in Bend.