If you’re a struggling homeowner facing foreclosure in Oregon, your foreclosure will probably be nonjudicial (out of court), though a judicial foreclosure (which goes through the court system) is also possible. Either way, you can participate in preforeclosure mediation with your lender to discuss options to avoid foreclosure. Also, once the foreclosure has started, you have the right to cure the mortgage default by paying the past-due amounts, although you must do so within a certain period of time before the sale. To find out more about these and other key features of Oregon’s foreclosure laws, read on.
The citations to Oregon’s foreclosure statutes are:
You can find a link to the Oregon Revised Statutes on the Oregon state legislature’s website at www.oregonlegislature.gov. If you need help finding the statutes, see Finding Your State’s Foreclosure Laws.
We’ve summarized important parts of Oregon’s foreclosure laws below. You can find more detailed articles on various features of Oregon foreclosure law in Nolo’s Oregon Foreclosure Law Center.
Foreclosures in Oregon can be nonjudicial, which means the foreclosure takes place without court supervision, orjudicial, which means the lender must file a lawsuit in court to foreclose the home. This article focuses on the nonjudicial process.
Before the lender can foreclose a residential deed of trust in Oregon (either nonjudicially or judicially), it must first offer the homeowner the opportunity to have a face-to-face mediation meeting (called a “resolution conference”) with the lender and a neutral mediator to explore options to avoid a foreclosure. Or. Rev. Stat. § 86.726. (Learn more about resolution conferences in Nolo’s article Oregon Foreclosure Mediation.)
Mediation notice. The lender will send a notice about the resolution conference to the borrower. To participate in the resolution conference, the borrower must agree to the meeting, meet with a housing counselor beforehand (unless the homeowner cannot get an appointment before the conference), and pay a fee. The conference will occur within 75 days after the lender sends the notice. Or. Rev. Stat. § 86.729.
There are three foreclosure notices in Oregon: a notice of default, a notice of sale, and a “danger” notice.
Notice of default. To begin the foreclosure, the trustee (the third party that handles nonjudicial foreclosures) records a notice of default in the county records. Or. Rev. Stat. § 86.752.
Notice of sale. After recording the notice of default, and at least 120 days before the sale, the trustee must serve or mail a notice of sale to the borrower. Or. Rev. Stat. § 86.764.
The trustee must also serve the notice of sale to the occupant of the property at least 120 days before the sale. The trustee must attempt to personally serve the occupant and, if the first attempt fails, post the notice in a conspicuous place on the property. The trustee must make a second attempt to serve the notice to the occupant and, if that attempt fails, post the notice in a conspicuous place on the property again. The trustee must make a third attempt and, if that attempt fails, mail a copy of the notice to “Occupant” at the property address. Or. Rev. Stat. § 86.774.
In addition, the trustee must publish the notice of sale in a newspaper. Or. Rev. Stat. § 86.774.
Danger notice. On or before the date the trustee serves or mails the notice of sale, the trustee must mail what’s called a danger notice to the borrower. This notice warns the borrower that he or she is in danger of losing the property to foreclosure and includes information about what the borrower can do to try to save the home. Or. Rev. Stat. § 86.756.
In Oregon, a violation of the Servicemembers Civil Relief Act constitutes an unlawful practice under state law. Or. Rev. Stat. § 646.605, 646.608(LLL). (Learn more about the Servicemembers Civil Relief Act.)
Oregon law states that the lender can't initiate a suit or action to foreclosure a mortgage if the land covered by the mortgage is owned by a service member called into active service during war. Or. Rev. Stat. § 408.440.
“Reinstating” is when you catch up on the missed payments (principal and interest) plus costs and fees in order to stop a foreclosure. (Learn more about reinstatement to avoid foreclosure.)
Oregon borrowers can reinstate up to five days before the sale. Or. Rev. Stat. § 86.778.
In some states, you can redeem (repurchase) your home within a certain period of time after the foreclosure. In Oregon, however, the borrower does not get the right to redeem the home after a nonjuducial foreclosure. Or. Rev. Stat. § 86.797. (To get details on redemption after a foreclosure in Oregon, see Nolo’s article If I lose my home to foreclosure in Oregon, can I get it back?)
When the total mortgage debt exceeds the foreclosure sale price, the difference is called a “deficiency.” Some states allow the lender to seek a personal judgment (called a “deficiency judgment”) against the borrower for this amount, while other states prohibit deficiency judgments with what are called anti-deficiency laws.
In Oregon, deficiency judgments are not allowed following nonjudicial foreclosures. A deficiency judgment is also not permitted after a judicial foreclosure of a residential trust deed. Or. Rev. Stat. § 86.797. (For a summary of the deficiency law in Oregon, see Oregon Laws on Post-Foreclosure Deficiency.)
In Oregon, the purchaser is entitled to possession of the home ten days after the foreclosure sale. If the foreclosed homeowners don't leave, the purchaser may start an eviction action to remove them from the home. Or. Rev. Stat. § 86.782.