Oregon Foreclosure Law
The Oregon State Foreclosure Law dictates that lenders may avail of the Judicial and Non-Judicial Foreclosure processes to foreclose deeds of trusts or mortgages in default. The typical time of process last about 180 days and the deeds of trust and mortgages are the security instruments used. Deficiency Judgments and the Right of Redemption are both allowed in Oregon.
Judicial foreclosure is used when no power of sale exists in the security instruments. Petitioners must file a lawsuit in order to obtain a court order to foreclose. It has been a general practice that when the court declares a foreclosure, the property will be auctioned off and will subsequently be awarded to the highest bidder. In this type of foreclosure, the borrower may still redeem the property from the winning bidder as long as he will pay the purchasing price with interest, the foreclosure fees, and the maintenance and operating expenses of the property to the winning bidder within 180 days after the date of sale. The borrower must file a notice to redeem with the sheriff from 2 to 30 days after the sale.
Non-Judicial Foreclosure is used when a power of sale clause is expressed in the security instruments. “Power of Sale” is the process wherein the borrower agrees to sell the property in dispute to settle the remaining balance from a loan in case of default. Its most obvious difference from the judicial foreclosure is that it doesn’t need any court order to auction off the property as it is already stated in the security instruments. The lender or their duly designated representative, commonly referred to as the “trustee,” may execute the “power of sale”.
Power of Sale Foreclosure Guidelines
Should the security instruments contain a power of sale clause, the terms specified therein should be strictly followed. Otherwise, the non-judicial foreclosure should be carried out according to the process specified as follows:
- A notice of default must be recorded in the county where the property is located and the borrower and/or occupant of the property must be served with a copy of the notice at least 120 days before the scheduled foreclosure sale.
A copy of the notice must be published once a week for 4 successive weeks, with the last notice being published at least 20 days prior to the foreclosure sale.
The notice must have a description of the property, recorded information on the trust deed, a description of the default, the balance on the loan, the lender's proof of intent to sell, and the date, time, and place of the auction.
- The borrower may settle the default prior to the selling date by paying the total due amount plus all additional expenses incurred.
- The sale must be done through an auction to the highest bidder for cash. Any person, except the trustee, may bid at the sale, which will take place between 9:00 a.m. and 4:00 p.m. at the location stated in the notice of record.
The sale may be postponed for up to 180 days from the original sale date if at least 20 days advance notice is given, by mail, to the original recipients of the notice.
A deficiency judgment cannot be obtained through a non-judicial foreclosure, but may be pursued when other foreclosure methods are used.
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