SALEM — Sen. Lee Beyer wants homeowners and lenders to sit in the same room and “have an honest, good-faith conversation” on possible ways to avoid foreclosure.

The Democrat from Springfield testified Wednesday on behalf of Senate Bill 558, a bill he sponsors and which would expand the state’s foreclosure mediation program.

“The core of the issue, what we’re dealing with is not that complicated,” he told members of the General Government, Consumer and Small Business Protection Committee. “All we’re asking is for a lender who has a borrower … in default, that the lender sit down with the borrower and try to work a deal out.”

Committee Chairman Sen. Chip Shields, D-Portland, said he plans to pass the bill out of committee on Friday and onto the Senate floor for a vote.

Lawmakers created the state’s mediation program in Senate Bill 1552 during the abbreviated 2012 February session. The intent was the same: put the two sides in one room.

It was created to ensure that lenders could not simultaneously foreclose on those who are in the midst of loan-modification negotiations. Beyond having a conversation, there were no requirements. But it didn’t work.

Lenders ignored the mediation requirement. The law had no provision to enforce it. Banks have also abandoned the nonjudicial foreclosure route and opted to foreclose using the state courts. SB 1552 did not require mediation for judicial foreclosures. SB 558 expands that requirement to ensure that no matter the route, mediation is an option.

Sen. Brian Boquist, R-Dallas, also urged lawmakers to pass the bill, saying “this is as good as we’re going to get.”

Democratic lawmakers, who have control of both chambers of the Legislature, have pushed expanding the mediation law and adding an enforcement mechanism. In previous hearings, lenders argued the law was overly burdensome and created too many liabilities.

Now, the arguments, Boquist said, “are largely technical.”

Proposed amendments would add enforcement mechanisms, allowing the state Attorney General’s office to prosecute banks if they are found to be not complying with the legislation.

The amendments also iron out the timing of paperwork in the process. The amendments cap the amount of fees banks and homeowners would pay to participate in mediation and they also exempt banks who process fewer than 175 foreclosures a year.

Initially, lenders pushed to have SB 558 clarify the role the Mortgage Electronic Registration Systems, or MERS, plays in the nonjudicial foreclosure process.

The Oregon Supreme Court, however, is expected to rule in a case involving MERS — which is responsible for tracking millions of mortgages — sometime this summer.

The system was created by the mortgage industry, in part to allow larger banking institutions to quickly transfer mortgages from one entity to another and track the assignments through the private database instead of publicly recording each transfer in local county clerk offices.

Boquist said he assumes that once the judges make a decision, lawmakers will still have to weigh in to clarify the ruling.

Until then, he said, lawmakers said they aren’t inclined to tackle MERS legislatively.

“Everyone is waiting to see what the Supreme Court does,” Boquist said.

Senate Bill 558

Proposed amendments to Senate Bill 558:

• The Oregon Attorney General would have standing to sue lenders who do not participate in mediation. The AG could enter into a “voluntary compliance” agreement, to avoid litigation, with banks if they don’t participate.,

• Private citizens would have no “private right of action,” or standing to sue lenders in court.

• Only banks that process 175 foreclosures a year or more would be affected by SB 558.

• Homeowners would pay no more than $200 in mediation fees; banks would pay no more than $600

• Ensures that mediation dates are not set before a borrower pays a fee.

• If the lender can’t modify a homeowner’s loan, it would have to notify the homeowner in “plain language” prior to the foreclosure sale.

• “Substantial compliance” to this measure would be required.