I live in California and I own a rental home in Redmond Oregon. I still have the
first loan on the property, an option ARM. The property is under water and I may
need to short sale or foreclose soon. I reviewed my loan papers and I am not able
to determine if the loan is non-recourse or not. I checked various on line sites and I found conflicting information. I also check the Oregon http://www.leg.state.or.us/ors/088.html web site. But I'm still confused. In short, is Oregon a non
judicial / non-recourse state? Can the loan company go after me on the balance not covered by selling the home for less than the loan amount? Thank you for your help!
home email: email@example.com
Oregon has both processes.
Judicial Foreclosure Available: Yes
- Non-Judicial Foreclosure Available: Yes
- Primary Security Instruments: Deed of Trust, Mortgage
- Timeline: Typically 180 days
- Right of Redemption: Yes
- Deficiency Judgments Allowed: Yes
In Oregon, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.
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.
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.