When it comes to foreclosure reform, the legislator from Sunriver is clueless and out of touch

Kari Chisholm FacebookTwitterWebsite

Unreal. It seems that Rep. Gene Whisnant (R-Sunriver) is the guy standing in the way of meaningful reform on foreclosures.

As the O's Elliott Njus reports, Whisnant wants to water down a bill that passed through the Senate with broad bipartisan support.

Changes proposed by Republican leaders to Senate Bill 1552 would do away with the requirement that banks meet with borrowers in mediation if the borrower requests it.

The amendment would make mediation voluntary, and it would ease some legal hurdles for foreclosing. It would allocate money for the mediation services, as well as counseling and other assistance for homeowners.

The Bend Source tells us why Whisnant is opposed to these common-sense reforms:

The Sunriver Republican, in his role as co-chairman of the House General Government and Consumer Protection Committee, killed four of the bills last week by refusing to schedule them for a hearing. ...

Asked why he’s not supporting the foreclosure prevention bills, Whisnant parrots the usual tired Republican rhetoric about the evils of big government and regulation. “We have enough regulations now,” he said, referring to temporary rules recently enacted by Attorney General John Kroger.

But the rules Kroger issued, while laudable, aren’t nearly enough. For one thing, they’ll expire in 180 days. For another, they’re aimed only at preventing blatant deception by lenders; they don’t make banks come to the table to try to work out solutions with borrowers.

As the O's Njus notes, Whisnant does have one idea that he's pushing (which is probably why he's not killing the bills outright, and instead proposing amendments). Whisnant wants to retroactively legalize a practice in which the companies that hold home loans register changes to the ownership of those loans in a private database - instead of with county property recording offices.

It would also retroactively validate the Mortgage Electronic Registration Systems Inc., a company the mortgage industry uses to avoid recording requirements each time a securitized loan changed hands. Some courts in Oregon have said foreclosures involving MERS were improper and violate state law while others have upheld the system.

Frankly, that's outrageous. You should be able to find out who owns your home loan - and the place to find that out is the county recorder of deeds. The ad hoc privatization of that system is flat out wrong.

And no, "R-Sunriver" isn't a typo. That's for real. I love vacationing at Sunriver as much as the next guy, but it's hardly the real world -- so it's no surprise that a legislator from Sunriver would be so wildly out of touch with what's actually happening out here. (Or even just down the road in Bend.)

It's time to move forward on foreclosure reform.

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    He's being disingenuous, too. Mediation is only mandatory on the BANKS, not the borrower.

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    First, MERS isn't outrageous, in any respect. If a borrower makes a payment to the servicer (regardless of who gets the benefit of the payment), then if the borrower doesn't get proper credit for the payment, the lender will lose. The debate is all about borrowers who stopped paying their mortgage, and still want to stop foreclosures. It's fine to talk about that very really policy issue, but I think the hyperbole is not warranted.

    Second, mediation is great. But mediation is legal disputes is about two parties, with legitimate legal positions, coming to some middle ground to resolve a dispute. I suspect that in most residential forecloures, the "dispute" is really a borrower trying to get concessions from a lender. It's not really a traditional dispute, but a request to deal with the very difficult and heartrending problem facing the borrower. Mediation is not suited to that circumstance.

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    Why would they pass anything that helps consumers? Look what congress did with the new consumer watch dog the president created. We have too much regulation? Guess what. If people acted responsibly we wouldn't need 1/2 the laws we have. I believe Pres. Obama quoted Pres. Lincoln when he said gov't should provide things citizens can't do for themselves and no more. This is a good example of something the average person can't do for themselves unless it is MANDATED.

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    Great post Kari, and you're right on MERS and Jonathan R is wrong. It has been a deeply abused system that is tied to robo-signing documents and other banking abuses. Quite why it's bad for borrowers to seek to renegotiate loans in a way that prevents foreclosures with their bad social and economic consequences, but o.k. for politicians to give banks a retrospective pass for breaking the law and pursuing profits in reckless ways that crashed our economy, followed by being bailed out at our expense with no real cost borne by them, followed by refusal to reinvest in the real economy or to work with people harmed by their blowing up and crashing the bubble, is beyond me. Moral hazard, anyone? + Insult +Injury?

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    We have a system for tracking who owns real property - and the loans associated with that property. It's critical that that system is publicly operated, and the data is public.

    Clear land title systems are central to the well-ordering of society and the economy.

    Shifting that system to a collection of private operators muddies the waters and makes things worse, not better.

    And that's before we even talk about the fact that this is largely just an attempt to avoid paying county recording fees.

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    Yes, keeping records on who owns real property is an inherently governmental function. I can understand that there's some frustration with how cumbersome the process has become, but that's a function of the chronic underfunding of necessary government services - something that the right very much supports. Replacing it with a private, non-verifiable system isn't the way to go. We should also seriously be thinking of greater judicial/governmental oversight of the foreclosure process, at least when it comes to residential property, even if it is just an administrative review of the process. For all that people did make bad decisions about their residences, that doesn't give some random finance company with no real interest in the property the right to enforce the consequences of those poor decisions.

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    Whisnant is the chairman of the Oregon ALEC chapter. This in itself is not necessarily a negative thing, but to my mind it puts his actions in question. If he really believes the regulations would be so detrimental to the industry being regulated that it would be a detriment to the customers that industry serves, then he should say so. Merely mumbling about regulations, is not good enough.

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    Well, at least our 9,000 people out here in Sunriver, Oregon (we are not just the resort) has a voice. We are 15 miles from Bend, our own city with schools and our voice has to start somewhere.

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      Trisha: Is this really how you want your voice used?

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      This is mostly off-topic, but I don't want to let this go unaddressed.

      Trisha, you live there, so you know more about what's going on day-to-day in Sunriver than I do.

      But are you sure it's a separate city? I think it's actually unincorporated Deschutes County, governed by a homeowners association. According to the Sunriver Owners Association, the police and fire services are part of a special taxing district created by the County - and it looks to me like the elementary school feeds into Bend high schools.

      None of which is really relevant to the discussion, of course.

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    Here's a comment from a supporter of one 'deadbeat' who has not paid on his mortgage since Jan 2011. Yeah, one of those...after being screwed over by his mortgage broker (huge mis-origination/fraud issues, broker and appraiser skipped town), then in 2009 when applying for HAMP he was deceived by more than one bank csr into purposely skipping payments, accepted into HAMP, makes all payments..then denied, then 4 months later he gets a foreclosure notice out of the blue as he keeps making his payments...pushes back hard on bank, gets foreclosure removed, and ever since has been in perpetual limbo being transferred from one point of contact to another, lost paperwork up the wazoo...finally he wrote tha bank and said fine, come to the table and we'll settle this up, but until, then I am not paying a dime. It's now been 14 months w/o making a payment. He doesn't want a free house, he recognizes that there must be defects in his loan, he wants to work with the bank to agree that they are there and to fix them and move on. He has the $$$ saved up to pay but until they come to the table he's not giving them a dime. Has he gotten any visits from local bank reps? Can he call up someone with authority at his bank. Nope, they purposefully do not include emails or phone numbers on written correspondence. Just random calls from the Office of the President and CEO when he pushes back on them hard enough that they are forced to respond to satisfy an inquiry from an elected representative. What we now know about MERS, is surely what is lurking beneath this guys loan. So, I see the ability to sit down with a 3rd party in a mediation as a good thing. A VERY good thing, and it's about time. It doesn't even begin to replace what good legal representation would do, but it's surely better than what is available now. FYI, this is not an unusual scenario - speak with some of the constituent liaisons who work for elected representatives and you will soon find out that these stories are TYPICAL.

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    who said I supported him? I was correcting area information. As someone who is sick of people seeing Sunriver as a resort only. Not as a community with a resort in it. A population that is not Bend and deserving separate distinction. My comment was intended to educate the tourist perspective portion of the commentary that made Sunriver seem nothing but a resort that could be represented by a town 15 miles away. I was stating we deserve separate distinction and representation. Not that I agree with the current person in that position. I actually can't believe I've had to explain this.

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    But at least Rep. Whisnant honors his contracts. He got a $1000 contribution from B of A and Oregon bankers the day before session started. They got their bribe paid in the nick of time!

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