Standing on her doorstep with U.S. Sen. Jeff Merkley Wednesday, Kristie Duncan of Medford described how she tried for three years to get a loan modification while in foreclosure and failed — until she tapped the clout and savvy of ACCESS Inc. housing counselors.
“It’s been a nightmare, with 50 different people working on my case and not one of them has a clue about the whole picture,” said Duncan, a part-time employee of the Rogue Valley Transportation District who lives alone in a small house on Mace Road.
Merkley used that story — and a similar tale told by Bruce and Leslie Sherbourne of Medford — to unveil a six-point loan reform program he believes will help stem the tide of foreclosures. The program would establish a permanent tax credit for first-time home buyers, set up a “short refinance” program and require third-party review of foreclosures to see whether there are alternatives.
The program calls for a stop to “dual track” foreclosures, meaning banks would be barred from foreclosing while at the same time processing a loan modification. It also would require a single point of access with a lender, meaning homeowners would talk to only one person who had all the files.
As a final point, Merkley wants to alter the law so federal bankruptcy judges can change the terms of a mortgage. Presently, they can change terms on any loan except a home loan.
Pointing to the 300,000 monthly foreclosures nationwide in the past 20 months, including 28,000 in Oregon last year, Merkley said the situation is “devastating to families and the economy and is absolutely unacceptable.”
Merkley chided a system in which foreclosed homes are being sold at fire-sale prices, when evicted former owners have incomes and, if they could get loans modified, would be able to afford them at the new price.
Duncan said she’d seen neighbors on two sides of her “get foreclosed on and pack it out,” a situation that Merkley said is damaging neighborhoods and further bringing down values.