Understanding the Foreclosure Process in Oregon

Understanding the foreclosure process in Oregon is an important part of navigating your own home foreclosure.

Before we dive in…

What is foreclosure anyway?

Foreclosure is the legal process that lenders use to take back property that secures a loan, generally after the borrower stops making payments.

Foreclosure is no fun.  But just know that it’s not the end of the world.  And, in  fact, both of the managers have been in foreclosure too, a long time ago.  We know how you feel.  We also know that you’ll get past this.

When you know how foreclosure in Oregon works… it arms you with the knowledge to make sure you navigate it well and come out the other end as well as possible.

The Basic Stages of A Foreclosure

There’s a few stages that are important to any foreclosure process.

Foreclosure works differently in different states around the country.

The two ways different states use to foreclose upon a property are: judicial sale or power of sale.  In Oregon both ways are possible.

Connect with us by calling (971) 246-7954 or through our contact page to have us walk you through the specific foreclosure process here locally in Portland.

In either scenario, foreclosure typically doesn’t go to court until 3-6 months of missed payments have elapsed. Usually (but not always), a lender will send out many notices that you are in arrears – overdue or behind in your payment.

Under Judicial Foreclosure:

  • Your mortgage lender must file suit in the court system.
  • You’ll get a letter from the court demanding payment.
  • Assuming the loan is valid, you’ll have 30 days to bring payment to court to avoid foreclosure (and sometimes that can be extended).
  • If you don’t pay during the payment period, a judgment will be entered and the lender can request the sale of your property – usually through an auction.
  • Once the property is sold, the sheriff serves an eviction notice and forces you to immediately vacate the property.

Under Power of Sale (or Non Judicial Foreclosure):

  • The mortgage lender serves you with papers demanding payment, and the courts are not required – although the process may be subject to judicial review.
  • After the established waiting period has elapsed, a deed of trust is drawn up and control of your property is transferred to a trustee.
  • The trustee can then sell your property for the lender at a public auction (notice must be given).

Anyone with an interest in the property must be notified during either type of foreclosure.

For example, any contractors or banks with liens against a foreclosed property are entitled to collect from the proceedings of an auction.

What Happens After A Foreclosure Auction?

After a foreclosure is complete, the loan amount is paid off with the sale proceeds.

Sometimes, if the sale of the property at auction isn’t enough to pay off the loan, a deficiency judgment can be issued against the borrower.

A deficiency judgement is where the bank gets a judgement against you, the borrower, for the remaining funds owed to the bank on the loan amount after the foreclosure sale.

Some states limit the amount owed in a deficiency judgment to the fair value of the property at the time of sale, while other states will allow the full loan amount to be assessed against the borrower.

Here’s a great resource that lists the state by state deficiency judgement laws, since every state is different.

Generally, it’s best to avoid a foreclosure auction if you can. When you see that you are going to have a problem making a payment call the bank holding the loan and begin a discussion. If you need to sell a property near Portland,  it may be that we can help you.  We buy houses in Portland Oregon like yours from people who need to sell fast.

Give us a call anytime (971) 246-7954 or
fill out the form on this website today! >>

 

Other Foreclosure Resources For Portland Oregon HomeOwners:

Fruit From the AppleTree

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