Foreclosure Law in Oregon

In Sheridan, Oregon is a process authorizing a lender of a mortgage to take possession or ownership of the property that secured the mortgage in the first place, to cut their losses when a borrower defaults on his or her loan.

A foreclosure typically involves a forced sale of the house at auction, so the bank can recover at least some of the loss it has incurred as a result of the default. Banks typically want to rid themselves of the property as soon as possible, collect as much money as they can from the sale, and then move on.

Like every other state in the U.S., Oregon permits homeowners facing foreclosure to opt for a foreclosure by judicial sale. This is a procedure through which a court oversees the sale of the house by the lender. The purpose is to see that the lender takes reasonable steps to notify the public of the auction, and other steps to ensure that the house sells for the highest price possible. This is meant to protect the borrower, making it less likely that they'll have to pay a large deficiency judgment (the remaining amount due on the mortgage if the house sells for less than the remaining balance).

In some states, original mortgages are identified as "non-recourse" loans, making the above problem a non-issue. This essentially means that once the mortgaged property is sold by the lender, the debt is discharged, even if the sale nets less than the remaining balance on the mortgage. The borrower will simply have to write this off as a loss. However, this usually does not apply to refinanced or second mortgages.

How to Possibly Avoid Foreclosure in Sheridan, Oregon

First and foremost, you need to communicate with your lender, and not dismiss the issue. Ignoring a problem with your mortgage will not make it go away, and can only make things worse. You should be forthright with your lender, and stay in touch with them as much as possible.

Throughout all this, you should remember one thing: the bank doesn't really want your house. After all, banks aren't real estate speculators, they're mainly money lenders. They stand to make a great deal of money if you are able to make your mortgage payments until it's paid off. They're likely to make much less if they're forced to sell your house.

If your financial situation suddenly changes, your lender may be willing to change the terms of your loan, at least temporarily, permitting for lower monthly payments. If this means that they will be able to get some money from you, with default as the alternative, it can become an attractive option for everyone involved.

As a last resort, you might consider a "short sale," which results in loss of the home, but it typically leads to a great deal of the debt on the mortgage being forgiven. Typically, a short sale in Oregon involves selling the house for whatever price it can fetch. The proceeds from the sale go to the lender, and if it sells for less than what's left on the mortgage, the balance of the debt is forgiven.

Can a Sheridan, Oregon real estate attorney help?

If you live in Sheridan, Oregon and believe that your house is in danger of being foreclosed, you may have more options and protections than you think. You may not know what all of them are, but an efficient real estate lawyer probably will.