Chapter 88 — Foreclosure of Mortgages and Other Liens
FORECLOSURE OF MORTGAGES AND OTHER LIENS
MORTGAGES AND LIENS
88.010 Foreclosure of lien by suit; judgment for amount of debt; other remedies; requirements for complaint in proceeding to foreclose residential trust deed; stay
88.020 Joinder of foreclosure suit involving real property with suit to quiet title
88.030 Other lienholders and debtors as defendants; effect of failure to redeem
88.040 Foreclosure suit during and after action for debt
88.050 Judgment foreclosing more than one lien on same property
88.060 Enforcement of judgment
88.090 Judgment when debt payable in installments
88.100 Payment of amount due before foreclosure sale; judgment for payment of installment not due
88.103 Sale of real property after mortgage foreclosure
88.106 Sale and redemption; effect of sheriff’s deed
88.110 Duration of real property mortgage lien; when suit for foreclosure barred
88.120 When foreclosure not barred by ORS 88.110
88.710 “Lien” defined
88.720 Acquisition, administration and disposal by state of property subject to lien held by state
88.740 Investment of surplus moneys in Oregon War Veterans’ Bond Sinking Account
88.010 Foreclosure of lien by suit; judgment for amount of debt; other remedies; requirements for complaint in proceeding to foreclose residential trust deed; stay. (1)(a) Except as otherwise provided by law, a lien upon real or personal property, other than that of a judgment, whether created by mortgage or otherwise, must be foreclosed, and the property adjudged to be sold to satisfy the debt the lien secures, by bringing suit. A judgment in the suit must include a declaration of the amount of the debt that the lien secures.
(b) Except as provided in ORS 86.797 or 88.103 or other applicable law, if the lien debtor or another person, as principal or otherwise, has given a promissory note or other personal obligation to pay the debt and if the plaintiff in the complaint asks the court for a money award in the judgment, the court shall include in the judgment a money award against the lien debtor or other person for the amount of the debt.
(c) The provisions of this chapter as to liens upon personal property do not exclude a person that has a lien from any other remedy or right that the person otherwise has with respect to the property.
(2)(a) A complaint in a suit to foreclose a residential trust deed on the lien debtor must include as an attachment a copy of a notice to lien debtors, in substantially the following form and printed in at least 14-point type:
WARNING: You may get offers from people who tell you they can help you keep your property. You may get offers from people who want to buy your “redemption rights” or “all rights under ORS chapter 18.” You should be careful about those offers, as a sale of your rights to a property in foreclosure may include your right to claim any surplus funds arising from the foreclosure sale. Make sure you understand any papers you are asked to sign. If you have any questions, talk to a lawyer or one of the organizations mentioned below before signing.
There are government agencies and nonprofit organizations that can give you information about foreclosure and help you decide what to do. For the name and telephone number of an organization near you, please call the statewide telephone contact number at_________. You may also wish to talk to a lawyer. If you need help finding a lawyer, you may call the Oregon State Bar’s Lawyer Referral Service at _________ or toll-free in Oregon at _________ or you may visit its website at:_________. Legal assistance may be available if you have a low income and meet federal poverty guidelines. For more information and a directory of legal aid programs, go to_________.
(b) The person filing the complaint shall insert in the notice under this subsection the resource telephone contact numbers and website addresses prescribed by the Department of Consumer and Business Services by rule under ORS 86.756.
(3)(a) A complaint in a suit to foreclose a residential trust deed under this section must include as an attachment a true copy of:
(A) A valid and unexpired certificate of compliance that a service provider issued to a beneficiary under ORS 86.736;
(B) The affidavit the person submitted under ORS 86.726 (1)(b), provided that the exemption the person claimed in the affidavit has not expired;
(C) The notice the beneficiary received under ORS 86.736 (1)(c); or
(D) A signed affidavit from the Director of Veterans’ Affairs that states that the Department of Veterans’ Affairs, in the department’s capacity as a beneficiary of loans made under ORS 407.125, is exempt from the requirement under ORS 86.726 to request or participate in a resolution conference with a grantor.
(b)(A) A court on the court’s own motion or in response to a motion from a defendant may dismiss without prejudice a suit that a person brings under this section to foreclose a residential trust deed, or may stay proceedings on the suit, if the person:
(i) Fails to file with the court the certificate described in paragraph (a)(A) of this subsection or the affidavit described in paragraph (a)(B) or (D) of this subsection; or
(ii) Files with the court the notice described in paragraph (a)(C) of this subsection.
(B) The court may release a stay the court granted under subparagraph (A) of this paragraph if the person files with the court the certificate described in paragraph (a)(A) of this subsection or the affidavit described in paragraph (a)(B) or (D) of this subsection.
(C) The court may award a defendant that prevails on a motion under this paragraph reasonable costs and attorney fees associated with bringing the motion and any other relief the court deems proper.
(4) Except as provided in ORS 408.515 (3), the information required under ORS 408.515 must be included with a summons in an action under this section to foreclose a lien upon residential real property, as defined in ORS 408.515. [Amended by 2003 c.576 §345; 2013 c.304 §12; 2015 c.291 §4; 2017 c.236 §2; 2019 c.309 §4; subsection (4) of 2019 edition enacted as 2019 c.405 §6]
Note: 88.010 (4) was added to and made a part of ORS chapter 88 by legislative action but was not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.
88.020 Joinder of foreclosure suit involving real property with suit to quiet title. Any cause of suit involving real property provided for in ORS 88.010 may be joined with any cause of suit provided for in ORS 105.605 in the same complaint or cross-complaint, if both causes of suit involve the same real property or some part thereof and are separately stated. Any person may be joined as a party who is a proper party to either cause of suit. The court, in event of such joinder, may render a judgment that will, among other things, determine the paramount title to the real property involved or any part thereof. [Amended by 2003 c.576 §346]
88.030 Other lienholders and debtors as defendants; effect of failure to redeem. Any person having a lien subsequent to the plaintiff upon the same property or any part thereof, or who has given a promissory note or other personal obligation for the payment of the debt, or any part thereof, secured by the mortgage or other lien which is the subject of the suit, shall be made a defendant in the suit, and any person having a prior lien may be made defendant at the option of the plaintiff, or by the order of the court when deemed necessary. The failure of any junior lien or interest holder who is omitted as a party defendant in the suit to redeem within five years of the date of a sheriff’s sale under ORS 88.106 shall bar such junior lien or interest holder from any other action or proceeding against the property by the person on account of such person’s lien or interest. [Amended by 1985 c.817 §10]
88.040 Foreclosure suit during and after action for debt. During the pendency of an action for the recovery of a debt secured by any lien mentioned in ORS 88.010, a suit cannot be maintained for the foreclosure of the lien, nor thereafter, unless judgment is given in such action that the plaintiff recover the debt or some part thereof, and an execution thereon against the property of the defendant is returned unsatisfied in whole or in part.
88.050 Judgment foreclosing more than one lien on same property. When it is adjudged that any of the defendants have a lien upon the property, the court shall make a like judgment in relation thereto, and the debt secured thereby, as if such defendant were a plaintiff in the suit. When a judgment is given foreclosing two or more liens upon the same property or any portion thereof in favor of different persons not united in interest, the judgment shall specify the order, according to their priority, in which the debts secured by such liens shall be satisfied out of the proceeds of the sale of the property. [Amended by 2003 c.576 §347]
88.060 Enforcement of judgment. (1) A judgment of foreclosure and sale may be enforced by execution as provided in this section.
(2) If a judgment of foreclosure and sale is given, an execution may issue against the property adjudged to be sold. If the judgment is in favor of the plaintiff only, the execution may issue as in ordinary cases, but if the judgment is in favor of different persons not united in interest, the execution shall issue upon the joint request of the persons or upon the order of the court or judge on the motion of the persons.
(3) If the judgment includes a money award against the defendants or any one of the defendants in person, and the net sale proceeds of the property upon which the lien is foreclosed are insufficient to satisfy the money award as to the sum remaining unsatisfied, the judgment may be enforced by execution as in ordinary cases. If the judgment is in favor of different persons not united in interest, the judgment is a separate judgment as to the persons and may be enforced accordingly. [Amended by 2003 c.576 §348; 2015 c.291 §5]
88.070 [Amended by 2003 c.576 §349; 2007 c.166 §15; 2009 c.883 §3; renumbered 88.103 in 2013]
88.075 [1975 c.618 §6; repealed by 2007 c.166 §17]
88.080 [Amended by 1979 c.284 §91; 2003 c.576 §350; 2005 c.22 §56; 2005 c.542 §§68a,68b; 2005 c.568 §39; renumbered 88.106 in 2013]
88.090 Judgment when debt payable in installments. When a suit is commenced to foreclose a lien securing a debt payable in installments, either of interest or principal, and any of such installments is not then due, the court shall enter a judgment for the foreclosure of the lien, and may also include in the judgment a requirement that the property be sold for the satisfaction of the whole debt, or so much thereof as may be necessary to satisfy the installment then due, with costs of suit. In the latter case, the judgment of foreclosure as to the remainder of the property may be enforced by an order of sale, in whole or in part, whenever default occurs in the payment of the installments not then due. [Amended by 2003 c.576 §351]
88.100 Payment of amount due before foreclosure sale; judgment for payment of installment not due. If, before a judgment is given, the amount then due with the costs of suit is brought into court and paid to the clerk, the suit shall be dismissed. If the same is done after judgment and before sale, the effect of the judgment as to the amount then due and paid shall be terminated, and the execution, if any has issued, shall be recalled by the clerk. When an installment not due is adjudged to be paid, the court shall determine and specify in the judgment what sum shall be received in satisfaction thereof, which sum may be equal to such installment, or otherwise, according to the present value thereof. [Amended by 2003 c.576 §352]
88.103 Sale of real property after mortgage foreclosure. (1) When real property is sold pursuant to a judgment foreclosing a mortgage and the proceeds of the sale are not adequate to satisfy the amounts secured by the mortgage, all judgment remedies for collection of the unsatisfied amounts expire when the sale is made if:
(a) The mortgage was given to a seller to secure the unpaid balance of the purchase price of real property; or
(b) The mortgage was given after September 13, 1975, to a person other than a seller to secure not more than $50,000 of the unpaid balance of the purchase price of real property used by the purchaser as the primary or secondary single family residence of the purchaser.
(2) If a purchaser gives more than one mortgage to a seller or a single lender to finance the purchase of real property that the purchaser uses as the purchaser’s primary single family residence and the seller or lender or a subsidiary, affiliate or successor of the seller or lender continues to hold the mortgages at the time of foreclosure, judgment remedies for the collection of unsatisfied amounts that the grantor owes to the seller or lender or the subsidiary, affiliate or successor of the seller or lender on notes secured by the mortgages expire when the real property is sold in accordance with the foreclosure. [Formerly 88.070]
88.106 Sale and redemption; effect of sheriff’s deed. A judgment of foreclosure shall order the mortgaged property sold. Property sold on execution issued upon a judgment may be redeemed in like manner and with like effect as property sold at an execution sale pursuant to ORS 18.860 to 18.993, and not otherwise. A sheriff’s deed for property sold on execution issued upon a judgment shall have the same force and effect as a sheriff’s deed issued for property sold at an execution sale pursuant to ORS 18.860 to 18.993. [Formerly 88.080]
88.110 Duration of real property mortgage lien; when suit for foreclosure barred. Except as provided in ORS 88.120, no mortgage upon real property shall be a lien upon such property after the expiration of 10 years from the later of the date of maturity of the mortgage debt, the expiration of the term of the mortgage debt or the date to which the payment thereof has been extended by agreement of record; and after such 10 years the mortgage shall be conclusively presumed paid and discharged, and no suit shall be maintainable for its foreclosure. If neither the date of maturity nor the term of the debt is disclosed by the recorded mortgage or recorded memorandum thereof, then the date of the execution of the recorded mortgage or recorded memorandum thereof shall be deemed the date of maturity and expiration of the term of the mortgage debt for purposes of this section. If the mortgage and a memorandum or memoranda thereof are of record and no date of maturity or statement of the term of the mortgage is contained in the mortgage or memoranda, then the date of execution of the earliest document of record shall be used to determine the date of maturity and the expiration of the term of the debt. [Amended by 1997 c.143 §1]
88.120 When foreclosure not barred by ORS 88.110. (1) Foreclosure of a mortgage on real property is not barred by ORS 88.110 when the mortgage is held of record by the State of Oregon or when all the following facts exist at the time the foreclosure suit is commenced:
(a) Any portion of the mortgage debt, or any interest thereon, has been voluntarily paid within the 10 years immediately preceding commencement of the suit.
(b) The original mortgagor still owns the mortgaged property.
(c) No lien or right of a third person has attached to the property after the expiration of the 10-year period referred to in ORS 88.110.
(2) A mortgage that is not enforceable by the transferor at the time of transfer to the State of Oregon does not become enforceable thereafter under this section. [Amended by 1997 c.298 §1]
88.710 “Lien” defined. As used in ORS 88.710 to 88.740, “lien” means any charge upon property for the payment or discharge of a debt, tax or duty due the State of Oregon or any agency of the state, including judgment liens, recorded warrants or any notice or claim of amount due given by the state, or an agency thereof, pursuant to law and carried forward on the County Clerk Lien Record or the register of the circuit court of the county wherein property is located to which a lien of the state attaches. [1959 c.499 §1; 1963 c.578 §2; 1991 c.111 §8; 2003 c.576 §190; 2005 c.625 §67]
88.720 Acquisition, administration and disposal by state of property subject to lien held by state. Whenever in the discretion of the Department of Veterans’ Affairs such a procedure would appear beneficial to the state, and on advice of the state agency charged with collection of a tax, duty, debt or any sum owing the state for which a lien securing such debt, tax or duty is being foreclosed by the state agency or by third parties, the department may bid in or redeem real or personal property ordered sold under foreclosure where such property is subject to any lien held by the state at a price limited to the sum of the amount of the state lien and all other prior liens plus costs but in no event to exceed the appraised value; acquire title to real property for and in behalf of the state as a result of such foreclosure; accept deeds from debtors, taxpayers or other persons owing a debt, tax or duty to the state in lieu of foreclosure; make repairs, improvements or alterations; insure against loss or damage; pay taxes, liens and charges of every kind superior to the lien of the state; and sell, transfer, lease or assign such property for and in behalf of the state, or otherwise administer such property in such manner as the department deems for the best interest of the state in the same manner the department manages and conveys property pursuant to ORS 407.135; the department shall undertake to sell property after acquiring marketable title thereto, and while holding such property may not engage in any enterprise competitive with private enterprise other than the renting or leasing of such property or interests therein. The control of such property while title remains vested in the state shall be exercised by the department. [1959 c.499 §2; 1963 c.578 §3; 1967 c.211 §6; 2005 c.625 §68]
88.730 [1959 c.499 §3; 1963 c.578 §4; repealed by 1967 c.211 §7 (88.740 enacted in lieu of 88.730)]
88.740 Investment of surplus moneys in Oregon War Veterans’ Bond Sinking Account. (1) The Department of Veterans’ Affairs is authorized, in whatever manner the department considers advisable and to the extent necessary to carry out the provisions of ORS 88.710 to 88.740, to use the surplus moneys in the Oregon War Veterans’ Bond Sinking Account, other than the moneys therein which are derived from tax levies and sales of refunding bonds, that are earnings in excess of the amount required to amortize the bonded indebtedness incurred under the authority of Article XI-A, section 1, of the Oregon Constitution, and ORS chapter 407.
(2) The property acquired under ORS 88.710 to 88.740 shall represent an investment of the Oregon War Veterans’ Bond Sinking Account and all moneys received by the department from the sale, lease or other disposition of any property shall be deposited in the Oregon War Veterans’ Bond Sinking Account.
(3) The department may pay to the State Treasurer, to be deposited in the General Fund available for general governmental expenses:
(a) An amount equal to the balance owing on any existing real estate contract arising out of the sale of property by the department which was an investment of the General Fund pursuant to ORS 88.710 to 88.740, and upon such payment the interest represented by the real estate contract shall represent an investment of the Oregon War Veterans’ Bond Sinking Account.
(b) An amount equal to the General Fund moneys expended for the acquisition of presently unsold properties pursuant to ORS 88.710 to 88.740, and upon such payment the properties shall represent an investment of the Oregon War Veterans’ Bond Sinking Account. [1967 c.211 §8 (enacted in lieu of 88.730); 1987 c.652 §16; 2005 c.625 §69; 2019 c.223 §18]
CHAPTER 89 [Reserved for expansion]