Foreclosure means a home is at risk. Most of the time this is a home that serves as the primary residence of the borrower. In Oregon, foreclosures follow one of two very different processes. We previously posted information about “Judicial Foreclosures” and the information that follows is about “Non-Judicial Foreclosures.” Next week we will compare and contrast the two foreclosure processes in Oregon. Keep in mind that before EITHER type of foreclosure can commence, the lender must (with limited exception) have gone through the state’s Foreclosure Avoidance Mediation program. More info on that program will follow but for now here are ten things you must know when facing a non-judicial foreclosure:
10 Things you MUST know when facing Judicial Foreclosure
1. Foreclosure generally is a process to force the transfer of ownership of real property out of the name of the Homeowner into the name of a Lender, lienholder or new purchaser.
2. Nonjudicial Foreclosure is an out of Court process governed by strict compliance with Oregon statutes. There is no Judge or Court to resolve any disputes between the Homeowner and the Lender. As a result it is often very difficult to get information or action from the Lender or Loan Servicer.
3. Nonjudicial foreclosure is initiated by the filing of a “Notice of Default and Election to Sell” (Commonly referred to as a “NOD”) by the Lender’s agent called the “Trustee”.
4. The NOD will contain a sale date which is at least 120 days after the NOD is issued. On that date a public auction will be held and the property will be sold. The NOD is published once a week for four weeks after it is issued.
5. The Homeowner can stop the Sale if, more than five days prior to the sale, the Homeowner catches up on all missed payments, costs and fees incurred by the Lender.
6. The sale date can be reset up to 6 months if the Trustee has reason to do so. Usually this is done in 30 day increments and often the Trustee will not announce a set over until the actual day and time the sale is supposed to occur.
7. The sale is a public auction and Lender is allowed to “credit bid” what they are owed. Anyone else must have cash or be prequalified to bid by the Trustee. The Homeowner can bid at the auction but again, must have cash or be prequalified, so this very rarely happens.
8. The sale price is usually equal to the total amount of debt owed on the first mortgage note including all fees and costs.
9. Once completed, the Borrower will no longer have any right to possession of the property and must move out of the property and remove all his/her personal belongings within ten days following the sale or face eviction.
10. The Borrower has no right to redeem (buy back) the property after the sale. The Trustee will issue a new Deed in the name of the purchaser.