Foreclosure is the means by which a creditor gains the right to sell real property that secures a due and unpaid debt. The debt can be in the form of a mortgage, a note and trust deed or a lien on the property. Whatever the instrument, foreclosure under Oregon law is the only way the creditor can force the sale of real property to pay the debt.
There are two kinds of foreclosures in Oregon. One is called judicial foreclosure. The other is called non-judicial foreclosure. Judicial foreclosure is typically used to foreclose mortgages and other liens on real property. Non-judicial foreclosure is typically used to foreclose interests under a trust deed by a process known as “advertisement and sale.”
All foreclosures are closely regulated by statute under Title 9 of Oregon Revised Statutes. The judicial foreclosure of mortgages is governed by the provisions of ORS Chapter 88. Liens are covered in ORS Chapter 87. The non-judicial foreclosure of trust deeds is governed by the provisions of ORS Chapter 86.
Generally, foreclosure laws and procedures are beyond the scope of a real estate licensee’s expertise. Extreme care should, therefore, be taken when marketing property that is in foreclosure or in danger of foreclosure. Click here for a discussion of Marketing Property in the Face of Foreclosure. Foreclosure is always a factor in a short sale. Click here for a detailed discussion of Short Sales.
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