In Oregon, lenders may foreclose on
deeds of trusts or mortgages in default using either a judicial or non-judicial
foreclosure process.
Judicial Foreclosure
The judicial process of foreclosure, which involves filing a lawsuit
to obtain a court order to foreclose, is used when no power of sale
is present in the mortgage or deed of trust. Generally, after the court
declares a foreclosure, your home will be auctioned off to the highest
bidder.
In this type of foreclosure, the borrower may redeem the property by
paying the purchase price, with interest, the foreclosure costs and
the purchaser's expenses in operating and maintaining the property within
180 days after the date of sale. The borrower must file a notice no
less than two (2) days and not more than thirty (30) with the sheriff
to redeem.
Non-Judicial
Foreclosure
The non-judicial process of foreclosure is used when a power of sale
clause exists in a mortgage or deed of trust. A "power of sale" clause
is the clause in a deed of trust or mortgage, in which the borrower
pre-authorizes the sale of property to pay off the balance on a loan
in the event of the their default. In deeds of trust or mortgages where
a power of sale exists, the power given to the lender to sell the property
may be executed by the lender or their representative, typically referred
to as the trustee. Regulations for this type of foreclosure process
are outlined below in the "Power of Sale Foreclosure Guidelines".
- Power
of Sale Foreclosure Guidelines
- If the deed of trust or mortgage contains a
power of sale clause and specifies the time, place and terms of sale,
then the specified procedure must be followed. Otherwise, the non-judicial
power of sale foreclosure is carried out 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 date.
A copy of the notice must be published once a week for four (4)
successive weeks, with the last notice being published at least
twenty (20) days prior to the foreclosure sale.
Said notice must contain a property description, recording information
on the trust deed, a description of the default, the sum owing on
the loan, the lender's election to sell and the date, time and place
of sale.
- The borrower may cure the default at any
time prior to foreclosure by paying all past due amounts, plus costs.
- The sale must be at auction to the highest
bidder for cash. Any person, except the trustee, may bid at the
sale, which take place between 9:00 am and 4:00 pm 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 twenty (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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