On February 9, 2021, the Oregon House introduced a second foreclosure moratorium bill related to COVID-19. Known as House Bill 2009 (HB 2009), the new legislation would extend Oregon’s now-expired foreclosure moratorium during an extended “emergency period” running retroactively from January 1, 2021 through at least September 1, 2021.
Similar to HB 4204, if signed into law, House Bill 2009 would:
- Prohibit foreclosures and trustee’s sales during the new emergency period;
- Limit lenders’ ability to impose default interest, late fees and other charges during the new emergency period;
- Prohibit lenders from treating as a default a borrower’s failure to make a payment during the new emergency period;
- Require lenders to allow borrowers to pay missed payments at a loan’s maturity;
- Require lenders to provide notice to borrowers of their rights under the new legislation; and
- Provide borrowers with a private right of action against lenders that violate the act, including the right to recover attorneys’ fees.
While HB 2009 is substantially similar to the relief provided under HB 4204, there are a few notable differences.
First, HB 2009 applies only to loans that are secured by real property that consists of “four or fewer improvements used primarily and designed solely for residential use.” While this is narrower that HB 4204 (which applied broadly to both commercial and residential loans), the use of the undefined term “improvements” in lieu of the standard term “residential units” could extend the HB 2009’s reach to large apartment complexes. It is unclear if this was the sponsors’ intent or a drafting oversight.
Second, HB 2009 retroactively voids foreclosure sales that will have occurred between January 1, 2021 and the date the Bill is signed into law. In contrast, HB 4204 excluded from its retroactivity provisions foreclosure sales that occurred pursuant to sale notices and writs of execution that were issued before the prior emergency period. With the expiration of HB 4204 on December 31, 2020, many lenders renoticed foreclosure sales within the 30-day period required under Oregon law. If enacted, HB 2009 would void those renoticed sales, resulting in significant uncertainty for both lenders and purchasers at a sale.
Third, unlike HB 4204, new HB 2009 does not require borrowers to certify that their inability to make a payment was a result of loss of income related to the COVID-19 pandemic. Rather, a borrower is only required to notify the lender that it cannot make the payment. The notice may be provided orally.
The House Committee on Business and Labor held its first public hearing on HB 2009 on March 3, 2021, with testimony from both borrower advocates and lenders. As of this writing, further hearings on the Bill have yet to be scheduled.