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Oregon’s Foreclosure Mediation Program Dissolves

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Oregon is seeking a new administrator for its foreclosure mediation program, after the Florida think tank running the program closed its doors on January 31, amid financial woes.

The Collins Center for Public Policy, a Miami-based nonprofit, announced its dissolving after 25 years existence. The Collins Center, which managed two other foreclosure mediation programs in Florida, saw its revenues decrease the last few years, according to the organization.

The Oregon Department of Justice, which oversees the state’s foreclosure mediation program, has re-launched its search for new contractor to the program. Created in July 2012, Oregon’s foreclosure mediation program has had trouble with lender participation, with only two private lenders agreeing to mediate with borrowers. The state of Oregon was paying the Collins Center $80,000 a month from money awarded from the national foreclosure robo signing settlement.

Oregon’s foreclosure mediation program hasn’t been financially self-sustaining nor has it helped many homeowners avoid foreclosure.

Lenders have filed foreclosures through the courts, bypassing the mediation program, since the mediation program took effect in July. The shift to judicial foreclosure occurred after the Oregon Court of Appeals ruled that lenders using the Mortgage Electronic Registration Systems to package and sell mortgages rapidly must go through the courts to begin foreclosure. The case is currently in the Oregon Supreme Court.

By going through judicial foreclosure, banks avoid the mediation requirement. There were only 422 cases in the foreclosure mediation program from July 11 to Jan. 30, according to the DOJ. Only four people have successfully completed mediation.

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