Foreclosure is the legal process a lender begins to force the sale of a mortgaged property when the borrower has not met the terms of the loan agreement. Foreclosures can also be started by others having a lien on a property, such as the county if property taxes are not paid.
There are two types of foreclosure process in Oregon:
- Judicial foreclosure: The process of taking the house by going to a judge as a lawsuit against the homeowner. If you receive a Notice of Hearing or any notice to appear in court regarding the sale of your house, contact an attorney as soon as possible.
- Nonjudicial foreclosure: If your “deed of trust” document has a power-of-sale clause, the trustee representing the servicer can begin a nonjudicial foreclosure. This means the trustee conducts a sale of the property outside of the court system. You will receive a Notice of Default and then a Notice of Trustee’s Sale or Trustee’s Notice of Sale at least 120 days before the sale.
Before starting either process, financial institutions must request a face-to-face meeting with the homeowner. This meeting is known as the resolution conference under the Oregon Foreclosure Avoidance Program. (Note: This requirement applies only to financial institutions that started more than 175 foreclosure actions in the prior year.)
For more details about what happens during foreclosure, see the Division of Finance and Corporate Securities’ publication, Keeping Your Home.