On March 24, 2021, the Oregon House Committee on Banking and Labor voted to advance House Bill 2009 (HB 2009) to a floor vote. As detailed in our prior write-up of the Bill, HB 2009 would extend Oregon’s foreclosure moratorium for certain loans through 2021.
In advancing HB 2009 to a floor vote, the Committee on Labor and Banking adopted several material amendments to the Bill that limit its scope and clarify important provisions. Among others, the amendments
- Alter the “emergency period” under HB 2009 to the period of December 31, 2020 to June 30, 2021, with two optional three-month extensions at Governor Brown’s election;
- Clarify that the moratorium applies only to property on which is situated four or fewer “dwelling units”, in contrast to the undefined “improvements” that was used in the initial draft. This change hopefully clarifies that the moratorium will not apply to large apartment complexes; and
- Restrict the Bill to properties that are “used primarily and designed solely for residential use.” This change could provide relief to agricultural and mixed-use property lenders to allow foreclosure and collection efforts to proceed.
Importantly, the amendments did not provide any type of safe harbor for lenders that complete foreclosures after the expiration of HB 4204 but prior to the date of HB 2009 becoming law. For those lenders, and their title insurance companies, it may be left to the courts to determine how HB 2009 will impact title. In those cases, we expect to see interesting federal and state constitutional challenges based on impairment of contracts, preemption, and unconstitutional takings.