Homeowners in Oregon now have a second chance to keep their homes. The Oregon Foreclosure Avoidance Mediation Program, which went into effect on Wednesday of last week, is going to help.

When Oregon homeowners are underwater on their mortgage, or otherwise facing foreclosure, they can now meet with their creditor, and have a mediator there to help them come up with an alternative to foreclosure, when possible. The bill that created the program will also prevent creditors from foreclosing while talks are still in session.

Oregon Homeowners Underwater with Creditors

Since the market grew rubber legs in 2008, tens of thousands of Oregon homes have been foreclosed on. Roughly 1,500 Oregon residents default on their mortgages. About 1,200 of these are eligible under the conditions of the new mediation program.

Mortgagers who foreclosed on less than 250 homes in the last year will not be bound by the mediation law. But this still leaves the biggest players in the foreclosure game (such as Bank of America) responsible for trying to work out solutions before they take away the homes of Oregon homeowners.

The Oregon Foreclosure Avoidance Mediation Program was created by Senate Bill 1552, and was passed this year by the Oregon State Senate. The program will be funded in part with monies from a settlement the state from five major banks.

What Kind of Steps are Being Taken, What Kinds of Mediation Services Will be Offered?

Now, when eligible Oregon homeowners receive default notices, they are also required to receive information about free foreclosure counseling, as well as about low-cost mediation services. Homeowners not in default, but who feel themselves at risk of foreclosure, are also eligible for mediation.

The biggest challenge will be for the state of Oregon to let homeowners know their options. The Collins Center for Public Policy, along with the Department of Justice, is planning ways to reach out to homeowners.

Economic Fairness Oregon has also pledged to help the state's citizens. The advocacy group plans to help spread the word across the state, as well as concentrate two of its members specifically on Washington counties.

The group's director, Angela Martin, claims that Washington County residents, being more affluent, are often unaware of the government services available at their disposal. Mediation services will be available to all homeowners regardless of income level.