Foreclosure Process Overview
Oregon foreclosures are handled either in court or out of court. The foreclosure process takes about five months.
||Trustee Sale mostly
In Oregon, once the lender records a notice of default, if no power-of-sale is included in the mortgage, foreclosure proceeds through the court system. Once the court declares a foreclosure, the property is put up for sale.
More commonly a power-of-sale clause is written into the mortgage, allowing the lender to sell the property out of court to recover the balance of the loan in the event of default. The lender records a notice of default with the county recorder at least four months before the property is scheduled for sale. The lender also delivers the notice of default to the borrower at least four months before the sale date.
The borrower can stop the foreclosure up to five days before the sale by paying all past due monies owed plus costs.
Notice of Sale / Auction
For out-of-court foreclosures, the notice of sale is published once a week for four weeks before the sale in a local newspaper. The last notice is published at least 20 days before the sale date.
The sale is between the hours of 9 a.m. and 4 p.m. at the location stated on the notice. Oregon foreclosure sales are public auctions. Anyone, with the exception of the trustee, may present bids. The property goes to the highest bidder, who must pay in full in cash at the time of the auction. The trustee transfers ownership of the property to the highest bidder within 10 days of the sale. At that time, the purchaser is also entitled to possession of the property.
The sale may be postponed for up to 180 days from the original scheduled date without restarting the foreclosure process.
For foreclosures conducted out of court, the borrower cannot redeem the property after the foreclosure sale.
Legislative and Legal Updates
The Oregon Supreme Court held in early June 2013 that the Mortgage Electronic Registration Systems, or MERS, has the authority to proceed in a non-judicial foreclosure proceeding if it has the correct documentation for the lenders it represents. The justices also ruled that creditors using MERS do not have to show the publicly recorded history of a trust deed in order to take advantage of the state’s non-judicial process. Instead, MERS may initiate foreclosure proceedings so long as it can prove it is acting as an agent for the lender that has the interest in the loan. The state has been a non-judicial one since 1959.
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