Earlier this afternoon, the Oregon Senate Committee on Housing and Development voted 3-2 to advance House Bill 2009 (HB 2009) out of Committee and to the Senate floor for a final vote on the Bill. Prior to advancing HB 2009, the Committee adopted an amendment that clarified the notice required under the Bill for lenders to provide to borrowers with respect to a borrower’s rights under HB 2009. Otherwise, the Bill remains substantively unchanged from the version approved by the Oregon House. As advanced out of Committee, HB 2009:
- Imposes a foreclosure moratorium retroactive from December 31, 2020, through June 30, 2021 (which is extendable by the Governor through December 31, 2021) for loans secured by properties that are comprised of “four or fewer dwelling units . . . used primarily and designed solely for residential use.”
- Applies only to borrowers that own not more than five residential properties.
- Requires lenders to provide a form notice to their borrowers of the protections available under HB 2009 within 60 days of the effective date of the Bill.
- For residential loans covered by HB 2009 and for which a borrower provides notice of an inability to make payments as a result of loss of income related to COVID-19:
- requires the lender to defer collecting periodic installments and permit the borrower to make any missed payments at maturity;
- prohibits the lender from imposing late fees, charges and attorneys’ fees and collecting default interest or charging inspection or appraisal fees as a result of the missed payments; and
- bars the lender from treating the borrower’s failure to make a payment as an ineligibility for a foreclosure avoidance measure.
- Voids foreclosure sales that occurred during the “emergency period” of December 31, 2020 through June 30, 2021 (which is extendable by the Governor through December 31, 2021).
- Provides borrowers damaged by a lender’s failure to comply with HB 2009 with a private right of action against the lender, including attorneys’ fees. However, HB 2009 does include a safeharbor for acts committed by a lender before the lender received notice from the borrower of the borrower’s inability to make payments as a result of COVID-19.
Several constitutional challenges to the prior foreclosure moratorium (HB 4204) are currently pending in both state and federal courts. If HB 2009 is signed into law, we expect additional challenges to be forthcoming, including with respect to the retroactivity provisions of the law and preemption challenges for lenders subject to federal regulation.