Foreclosure is the legal process a lender initiates to force the sale of a mortgaged property when the borrower has not met the terms of their home loan.  Foreclosures can also be initiated by others having a lien on the property such as the county if property taxes are not paid.

How does the foreclosure process work?

In Oregon there are two common types of foreclosures – judicial and non-judicial. The most common in Oregon is non-judicial.  In a non-judicial foreclosure the document securing the loan is a deed of trust. 

The parties involved are:

1. The financial institution or the beneficiary, which is the institution you owe;
2. The trustee, which is the neutral party to whom you conveyed or temporarily transferred the title of your house to be held in trust until your loan is paid in full;
3. You the borrower or trustor/grantor.

Foreclosure by “Advertisement and Sale” will begin if you, the homeowner are not making your mortgage payments as agreed and payments have been continuously late for at least 60-90 days.  After trying to contact you to have you bring your mortgage payments current, the financial institution will give instructions to the trustee to start the foreclosure process, also known as accelerating the loan.

Non-Judicial Foreclosure Timeline

There are strict legal deadlines related to a non-judicial foreclosure.  There are 120 days from first default to sale. For each step or critical event there are a required number of days.

After 60 Days a Notice of Sale is published in the newspaper for 4 successive weeks.

At 30 days before the schedule sale and final check for IRS Liens is conducted.

20 days before scheduled sale the trustee will Record Proof of Service, Affidavit of Mailing and Affidavit of Publication

15 or more days before the scheduled sale any interested party may send a written request to the trustee for a written statement of information.

Up to 5 days before the scheduled sale the borrower may cure the default--- and the sale can be POSTPONED.

On or after the 120^th day, the Sale takes place at the appointed time and place.  The Trustee’s deed is recorded within 10 days. The purchaser is entitled to possession 10 days after the sale.  There are no Redemption Rights after the sale.

Judicial Foreclosure

 A Judicial Foreclosure occurs when a lawsuit is filed to obtain a court order to foreclose.  This method is used when there is not a power of sale clause 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 of the sale.  The borrower must file a notice with the Sheriff to redeem, no less than two (2) days and not more than thirty (30) from the date of the sale.

How to Avoid Foreclosure and Rescue Scams

Are you having problems paying your mortgage?  Visit the link www.HOWNW.com  for some tips on avoiding foreclosure and information on Rescue Scams.

Can I stop a foreclosure?

You can stop or “cure” a foreclosure, but it must be done within the time constraints as defined in your loan documents.

The methods are:

REINSTATEMENT:  Pay the full amount that is delinquent.

FORBEARANCE:  Work out an agreement directly with the lien holder(s)  to make back payments over time plus the monthly payments owed.  Once the delinquent payments have been made, the mortgage can be reinstated.

SELL YOUR HOME:  If you have equity, you could sell the home and pay the lender with the proceeds.

REFINANCE:  Speak with the person with whom you originated the loan.

MORTGAGE: Call your lien holder and ask to speak with the loan modification department.

SHORT SALE:  See the short sale page on this site.