Foreclosure Laws in Oregon

by : Kathy Swift

In Oregon, both judicial or in court and non judicial, or out of court foreclosures are followed.  As with all states in which in and out of court foreclosures are allowed, the determining factor as to which one is used, is the power of sale clause.  The power of sale clause appears in the mortgage or deed of trust.  Most documents today have this clause, because it protects the bank.  The power of sale clause allow the lender to avoid the extra time and expense required in a judicial or in court foreclosure process.

In the rare occasion when a power of sale clause does not appear in the mortgage or deed of trust, judicial or in court foreclosure process must be followed.

The in court foreclosure starts with the bank filing a lawsuit against the home owner. The object of this lawsuit is to obtain a judges order to foreclose. Once this order is obtained by the bank, the process will move on to scheduling and auctioning the home.

Power of sale clauses can contain language which specifies when, where and how the trustees sale or auction is to take place.  If this is the case, then those instructions must be followed.

In most cases, however, the regular process continues at this point with a notice of default being recorded in the county where the property is located.

The home owner must be notified of the sale date a minimum of one hundred and twenty days bef ore the scheduled trustee’s sale.

A copy of this notice must be placed in a local paper with circulation in the county where the home is located.  This advertisement of the upcoming trustee’s sale is required to be run once a week for four consecutive weeks.  Sometime before the scheduled sale date, the last of these advertisements must be placed no less than twenty days before the scheduled sale date.

This notice of sale must include a description of the property, the deed of trust recording information.  It must also describe the amount of the loan and the time, place and date of the scheduled sale.

The sale will be an auction.  The home will be awarded to the highest bidder.  The winning bidder must be prepared to make that offer in cash.  The sale must take place between 9:00 am and 4:00 pm on the scheduled date and at the  location stated in the notice of sale.

Postponements of this sale can be made at the discretion of the bank.  Such postponement can be as much as and additional one hundred and eighty days.  However, the postponement must be arranged by advance written notice no less than twenty days before the scheduled sale date.  This written notice must be sent to all of the original recipients of the notice of sale.

If the bank chooses to save time and money by going for an out of court foreclosure, then they cannot choose to seek additional money from borrowers if they do not feel that the money generated from the trustee’s sale was satisfactory.  Pursuing the former home owner for additional funds is that is referred to as seeking deficiency judgment.  This option is only available to the bank if they go through the judicial or in-court foreclosure process.

In Oregon the home owner who loses his residence in foreclosure has a right of redemption period.  This redemption period is only allowed when a judicial or in court foreclosure process was used.  In such a case, this gives the borrower on hundred and eighty days following the sale to redeem their house.