2007 Oregon Code - Chapter 86 :: TITLE 9
TITLE 9
MORTGAGES AND
LIENS
Chapter 86. Mortgages; Trust Deeds
87. Statutory Liens
88. Foreclosure of Mortgages and Other Liens
_______________
Chapter 86 Mortgages;
Trust Deeds
2007 EDITION
MORTGAGES; TRUST DEEDS
MORTGAGES AND LIENS
REAL PROPERTY MORTGAGES
86.010 Nature
of mortgagees interest
86.020 Covenant
to pay money not implied
86.030 Absolute
deed as a mortgage
86.040 Improvements
on mortgaged lands
86.050 Payment
of taxes and other charges by mortgagee
86.060 Assignment
of mortgage
86.080 Record
of assignment not notice to mortgagor
86.095 Acts
not affecting priority of lien of credit instrument
86.100 Discharge
of mortgage
86.110 Discharge
of record by owner and holder of mortgage note who is not the mortgagee of
record
86.120 Discharge
of mortgage on real property; effect of discharge
86.130 Discharge
by foreign executors, administrators, conservators and guardians
86.140 Liability
of mortgagee for failure to discharge mortgage
86.150 Loan
agreements and promissory notes to state maximum prepayment privilege penalty
86.155 Priority
of line of credit instrument as to certain advances; procedure to limit
indebtedness in residential line of credit instrument
LATE CHARGES
86.160 Definitions
for ORS 86.160 to 86.185
86.165 Late
charge
86.170 Prohibited
mortgage provisions
86.175 Scope
86.180 ORS
86.160 to 86.185 not applicable to certain mortgagees; notice to borrowers
86.185 ORS
86.160 to 86.185 not applicable to certain loans
REAL ESTATE LOANS; SECURITY PROTECTION
86.205 Definitions
for ORS 86.205 to 86.275
86.210 Types
of lender security protection provisions allowed
86.214 Application
of ORS 86.210 and 86.245 to real estate loan agreements
86.240 Limit
on amount required in security protection escrow account; compliance with
federal laws for certain loans as compliance with state laws
86.245 Interest
on security protection deposits; exception
86.250 Service
charge prohibited where interest required
86.255 Arrangements
where security protection provisions not required; information to borrower
86.260 Payment
of taxes where security protection provision required; credit of discount where
taxes not paid; cause of action by borrower
86.265 Effect
of lender violation of ORS 86.205 to 86.275
86.270 ORS
86.205 to 86.275 inapplicable to certain loan agreements; notice to borrower
86.275 Severability
CHATTEL MORTGAGES
86.405 Secretary
of State to furnish statement of mortgages filed before September 1, 1963; fee
86.440 Discharge
of mortgage recorded with county recording officer
86.460 Discharge
of mortgage filed with Secretary of State; fee
86.470 Discharge,
assignment and foreclosure of mortgages on chattels registered and licensed by
Department of Transportation
INVESTMENTS; FEDERAL HOUSING ADMINISTRATOR
86.610 Power
of financial institutions, fiduciaries and others to make loans secured by
property insured by Federal Housing Administrator
86.620 Investment
of funds of financial institutions, fiduciaries and others in bonds and
mortgages accepted by Federal Housing Administrator, debentures issued thereby,
and obligations of national mortgage associations
86.630 Eligibility
of securities described in ORS 86.620 as security for deposits, investment or
reserve of securities
86.640 Applicability
of other laws requiring security or regulating loans and investments
TRUST DEEDS
86.705 Definitions
for ORS 86.705 to 86.795
86.710 Trust
deeds authorized to secure performance of an obligation; methods of foreclosure
after breach
86.715 Trust
deed deemed to be mortgage on real property; applicability of mortgage laws
86.720 Reconveyance
upon performance; liability for failure to reconvey; release of trust deed
86.725 Time
within which foreclosure must be commenced
86.735 Foreclosure
by advertisement and sale
86.740 Notice
of sale to be given to certain persons
86.742 Failure
to give notice of sale; action by omitted person; defense; pleading and proving
knowledge of sale; attorney fees; exclusive remedy
86.745 Contents
of notice of sale
86.750 Service
and publication of notice; recording proof of compliance
86.753 Discontinuance
of foreclosure proceedings after cure of default
86.755
86.757 Request
for information from trustee
86.759 Information
provided by trustee
86.765 Disposition
of proceeds of sale
86.770 Effect
of sale
86.775 Contents
of trustees deed to purchaser
86.780 Recitals
in trustees deed and certain affidavits as prima facie or conclusive evidence
86.785 Requests
for copies of notice of default or notice of sale
86.790 Qualifications
of trustee; appointment of successor trustee; duty of trustee
86.795 Compensation
of trustee
PENALTIES
86.990 Penalties
REAL PROPERTY MORTGAGES
86.010
Nature of mortgagees interest.
A mortgage of real property is not a conveyance so as to enable the owner of
the mortgage to recover possession of the property without a foreclosure and
sale. This section is not intended as a limitation upon the right of the owner
of real property to mortgage or pledge the rents and profits thereof, nor as prohibiting
the mortgagee or pledgee of such rents and profits, or any trustee under a
mortgage or trust deed from entering into possession of any real property,
other than farmlands or the homestead of the mortgagor or successor in
interest, for the purpose of operating the same and collecting the rents and
profits thereof for application in accordance with the provisions of the
mortgage or trust deed or other instrument creating the lien, nor as any
limitation upon the power of a court of equity to appoint a receiver to take
charge of the property and collect the rents and profits thereof.
86.020
Covenant to pay money not implied. No mortgage shall be construed as implying a covenant for the payment
of the sum thereby secured. When there is no express covenant for such payment
contained in the mortgage, and no bond or other separate instrument to secure
such payment shall have been given, the remedies of the mortgagee shall be
confined to the lands mentioned in the mortgage.
86.030
Absolute deed as a mortgage.
When a deed purports to be an absolute conveyance in terms, but is made or
intended to be made defeasible by a deed of defeasance or other instrument, the
original conveyance shall not be thereby defeated or affected as against any
person other than the maker of the defeasance, or the heirs or devisees of the
maker, or persons having actual notice thereof, unless the instrument of
defeasance is recorded with the recording officer of the county where the lands
lie.
86.040
Improvements on mortgaged lands. No person shall sell, dispose of, remove or damage any building or
other improvements upon mortgaged lands. All such improvements are deemed a
part of the mortgaged property and are subject to the mortgage lien. When any
improvements are removed from the mortgaged premises in violation of this
section, the mortgagee may follow and regain possession of such improvements
wherever found or may recover the reasonable value thereof from the person
removing them.
86.050
Payment of taxes and other charges by mortgagee. Whenever a mortgagor fails to pay when due
any taxes, assessments, interest on prior mortgages, insurance premiums or
other charges necessary to be paid for the protection of the lien of a
mortgagee, the mortgagee may pay the same, and such payments shall be added to
the mortgage debt and secured by the mortgage held by the mortgagee, and shall
bear interest at the same rate as specified in the mortgage. This section
applies only to mortgages executed after June 3, 1929, and does not affect the
right of parties to specifically contract otherwise than as provided in this
section.
86.060
Assignment of mortgage.
Mortgages may be assigned by an instrument in writing, executed and
acknowledged with the same formality as required in deeds and mortgages of real
property, and recorded in the records of mortgages of the county where the land
is situated.
86.070 [Repealed by 1965 c.252 §1]
86.080
Record of assignment not notice to mortgagor. The recording of the assignment of a mortgage is not of itself notice
of such assignment to the mortgagor, or the heirs or personal representatives
of the mortgagor, so as to invalidate a payment made by any of them to the
mortgagee.
86.090 [Repealed by 1965 c.252 §1]
86.095
Acts not affecting priority of lien of credit instrument. (1) Actions that do not affect the priority
granted to the lien of a credit instrument at the time it is first received for
recordation shall include but shall not be limited to:
(a) Renegotiation or adjustment of the
initial interest rate provided in the note or the credit instrument, upward or
downward, which may increase or decrease the amount of periodic payments or may
extend or shorten the term of the credit instrument, or both;
(b) An increase in the underlying
obligation secured by the credit instrument during any part of the term of the
credit instrument as a result of deferment of all or a portion of the interest
payments and the addition of such payments to the outstanding balance of the
obligation;
(c) Execution of new notes at designated
intervals during the term of the credit instrument that reflect changes made
pursuant to paragraph (a) or (b) of this subsection;
(d) Extension of the term of the credit
instrument;
(e) Substitution of a note if there is no
increase in the principal amount to be paid under the note;
(f) Modification of periodic payments
required under the note if there is no increase in the principal amount due
under the note; or
(g) Advances made under ORS 86.155.
(2) As used in this section, the addition
of accrued interest to the principal amount of the underlying obligation is not
an increase in the principal amount.
(3) As used in this section, credit
instrument includes a mortgage, a line of credit instrument, a deed of trust
and a contract for sale of real property. [1981 c.304 §2; 1987 c.716 §2; 1991
c.246 §1; 2001 c.20 §1]
86.100
Discharge of mortgage. Any
mortgage shall be discharged of record whenever there is presented to the
recording officer a certificate executed by the mortgagee, or the personal
representatives or assigns of the mortgagee, acknowledged or proved and
certified as prescribed by law to entitle conveyances to be recorded,
specifying that such mortgage has been paid or otherwise discharged. Every such
certificate, and the proof or acknowledgment thereof, shall be recorded at full
length. [Amended by 1965 c.252 §2]
86.110
Discharge of record by owner and holder of mortgage note who is not the
mortgagee of record. (1)
Whenever a promissory note secured by mortgage on real property is transferred
by indorsement without a formal assignment of the mortgage, and the mortgage is
recorded, the mortgage, upon payment of the promissory note, may be discharged
of record by the owner and holder of the promissory note making and filing with
the appropriate recording officer a certificate, verified by oath, proving the
satisfaction of mortgage and declaring, in substance, that the owner and holder
is the owner and holder of the note secured by the mortgage by indorsement of
the mortgagee and that the note has been fully paid and proving that fact to
the satisfaction of the recording officer.
(2) Upon receiving the certificate, the
recording officer shall record the document and index the document as a
satisfaction of mortgage. The record shall have the same effect as a deed of
release of the mortgagee duly acknowledged and recorded. [Amended by 1965 c.252
§3; 2001 c.577 §1]
86.120
Discharge of mortgage on real property; effect of discharge. No mortgage upon real property shall be discharged
except as provided in ORS 86.110 or by the person appearing upon the records of
the county where the mortgage is recorded to be the owner thereof. A discharge
of the mortgage by such person shall operate to free the land described in the
mortgage from the lien of the mortgage as against all subsequent purchasers and
incumbrances for value and without notice.
86.130
Discharge by foreign executors, administrators, conservators and guardians. Foreign executors, administrators,
conservators and guardians may discharge mortgages upon the records of any
county upon recording with the recording officer of the county in which the
mortgage is recorded a certified copy of their letters testamentary, or of
administration, or of guardianship or of conservatorship. The certificate shall
include a statement that the letters are in effect, and the certificate shall
be recorded in the mortgage records. [Amended by 1973 c.506 §§2,44]
86.140
Liability of mortgagee for failure to discharge mortgage. If any mortgagee or the personal
representative or assignee of the mortgagee, after full performance of the
condition of the mortgage before or after a breach thereof, shall, within 30
days after being thereto requested, and after tender of reasonable charges,
fail to discharge the same, or to execute and acknowledge a certificate of
discharge or release thereof, that person shall be liable to the mortgagor, or
the heirs or assigns of the mortgagor, in the sum of $500 damages and also for
all actual damages occasioned by such failure, to be recovered in an action at
law. The owner and holder of the promissory note referred to in ORS 86.110 is
deemed the personal representative of the mortgagee for the purposes of this
section. [Amended by 1955 c.29 §1; 1955 c.512 §1; 1993 c.648 §1]
86.150
Loan agreements and promissory notes to state maximum prepayment privilege
penalty. (1) Any person
making a loan having a loan period of more than three years secured by a
mortgage or by a trust deed on real property located in this state shall, with
respect to such loan, expressly and clearly state on the loan agreement and
promissory note any maximum prepayment privilege penalty. The statement shall
include the maximum prepayment penalty applicable for prepayment during the
first year of the loan period and for each year thereafter.
(2) Violation of subsection (1) of this
section with respect to a loan agreement or promissory note shall render any
prepayment privilege penalty provision in the agreement void.
(3) Loan agreement as used in this
section means a written document issued in connection with a particular loan
which sets forth the terms upon which the loan will be made. Loan agreement
does not include a mortgage or trust deed which secures a promissory note.
Nothing in this section shall be deemed to require a lender to issue a loan
agreement.
(4) This section does not apply to any
loan agreement executed on or before September 13, 1967, or any loan not
primarily for personal, family or household use. [1967 c.336 §§1,2; 1987 c.716 §3]
86.155
Priority of line of credit instrument as to certain advances; procedure to
limit indebtedness in residential line of credit instrument. (1) As used in this section:
(a) Credit agreement means any
promissory note, loan agreement or other agreement that provides for advances
subsequent to the date of recording of the line of credit instrument that
secures the note or agreement.
(b) Line of credit instrument means a
mortgage or trust deed that secures a consumer or commercial credit agreement
and creates a lien on specified real property up to a stated amount, provided
that the front page of the mortgage or trust deed, or a memorandum thereof:
(A) Contains the legend line of credit
mortgage, line of credit trust deed or line of credit instrument either in
capital letters or underscored above the body of the mortgage or trust deed;
(B) States the maximum principal amount to
be advanced pursuant to the credit agreement; and
(C) States the term or maturity date, if
any, of the credit agreement exclusive of any option to renew or extend the
term or maturity date.
(c) Residential line of credit instrument
means any line of credit instrument creating a lien on real property upon which
are situated or will be constructed four or fewer residential units, one of
which, at the time the credit agreement is entered into, is the borrowers
residence or is intended, following construction, to be a residence of the
borrower.
(2) A line of credit instrument shall have
priority, regardless of the knowledge of the lienholder of any intervening
lien, as of its date of recording as to the following advances whether the
advances are optional or obligatory advances:
(a) Principal advances made any time
pursuant to the credit agreement, to the extent the total outstanding advances
do not exceed the maximum principal amount stated in the line of credit
instrument under subsection (1)(b)(B) of this section;
(b) Interest, lawful charges and advances
made any time pursuant to the credit agreement for the reasonable protection of
the real property including, but not limited to, advances to pay real property
taxes, hazard insurance premiums, maintenance charges imposed under a
declaration or restrictive covenant and reasonable attorney fees, whether or not
the interest, lawful charges or advances exceed the maximum principal amount
stated in the line of credit instrument under subsection (1)(b)(B) of this
section; and
(c) Advances made any time after the date
of recording and pursuant to a credit agreement that is not secured by a
residential line of credit instrument to complete construction of previously
agreed-upon improvements on the real property, whether or not the advances
exceed the maximum principal amount stated in the line of credit instrument under
subsection (1)(b)(B) of this section provided, however, that the front page of
the instrument states that the maximum principal amount to be advanced pursuant
to the credit agreement may be exceeded by advances to complete construction
pursuant to this subsection.
(3) Actions that do not affect the
priority granted to the advances set forth in subsection (2) of this section
shall include, but not be limited to, those actions set forth in ORS 86.095
(1). If any modification to a credit agreement increases the maximum principal
amount to be advanced pursuant to the credit agreement, then principal advances
that are made that exceed the original maximum principal amount stated in the
line of credit instrument shall have priority as of the date of recording an
amendment to the line of credit instrument that states the increased maximum
principal amount.
(4) In the case of a residential line of
credit instrument, the debtor may limit the indebtedness secured by that line
of credit instrument to the amount of the credit outstanding by delivering a
notice by personal service upon the lienholder or trust deed beneficiary or by
mailing a notice by certified mail, return receipt requested, to the lienholder
or trust deed beneficiary at the address given for payment or, if none, to the
address of the lienholder or trust deed beneficiary indicated in the line of
credit instrument or deed of trust. To be sufficient to limit indebtedness
under this subsection, the notice must:
(a) State that it is made under this section;
(b) Contain the legal description in the
line of credit instrument or the street address of the real property;
(c) Provide the information necessary to
locate the line of credit instrument in the public record;
(d) State the debtors intention to limit
the amount of credit secured by the line of credit instrument to the amount
owed at the time the notice is received;
(e) State the date sent; and
(f) Be signed and acknowledged by all
debtors obligated under the line of credit instrument.
(5) Not later than the 20th day after
receipt of the notice described in subsection (4) of this section, the
lienholder or trust deed beneficiary shall:
(a) Indorse on the notice, or on an
addendum to the notice, the principal amount of the indebtedness secured by the
line of credit instrument on the date the lienholder or trust deed beneficiary
received notice;
(b) Sign and acknowledge the notice or the
addendum, if applicable; and
(c) Record the notice and addendum in the
public record where the line of credit instrument was originally recorded.
(6) If the lienholder or trust deed
beneficiary fails to record the notice and addendum, if applicable, within the
time period specified in subsection (5) of this section, the debtor may record
the notice in the public record where the line of credit instrument was
originally recorded, together with proof of receipt by, or personal delivery
to, the lienholder or trust deed beneficiary.
(7) Notwithstanding subsection (4) of this
section, the line of credit instrument shall continue to have priority as of
its date of recording as to:
(a) Principal advances, including any
advance the creditor is required to honor, that were made before a notice under
subsection (4) of this section is received;
(b) Interest, lawful charges and advances
described in subsection (2)(b) and (c) of this section; and
(c) All advances made after a notice under
subsection (4) of this section is received that are within the amount owed at
the time the notice under subsection (4) of this section is given. [1987 c.716 §4;
1989 c.198 §1; 1991 c.313 §1; 1991 c.438 §1; 1997 c.152 §1; 2001 c.20 §2; 2007
c.71 §18]
LATE CHARGES
86.160
Definitions for ORS 86.160 to 86.185. As used in ORS 86.160 to 86.185:
(1) Late charge means a sum payable by a
mortgagor to the holder of a mortgage pursuant to a note or mortgage to
compensate the holder for servicing and other costs attributable to the receipt
of mortgage payments from the mortgagor after the date upon which payment is
due.
(2) Mortgagor includes the grantor under
a deed of trust.
(3) Mortgage includes a deed of trust.
(4) Residential real property means a
single-family, owner-occupied dwelling and appurtenances. [1977 c.427 §1]
86.165
Late charge. No lender may
impose a late charge:
(1) With respect to any periodic
installment payment received by it within 15 days after the due date. However,
if the 15-day period ends on a Saturday, Sunday or legal holiday the 15-day
period is extended to the next business day.
(2) In a dollar amount which exceeds five
percent of the sum of principal and interest of the delinquent periodic
installment payment or the amount provided in the note or mortgage held by the
lender, whichever is the lesser.
(3) Unless the note or mortgage held by
the lender provides for payment of a late charge on delinquent periodic
installments and a monthly billing, coupon or notice is provided by the lender
disclosing the date on which periodic installments are due and that a late
charge may be imposed if payment is not received by lender within 15 days
thereafter. However, if the lender and the borrower have provided in the note
or other written loan agreement that the payments on the loan shall be made by
the means of automatic deductions from a deposit account maintained by the
borrower, the lender shall not be required to provide the borrower with a
monthly billing, coupon or notice under this subsection with respect to any
occasion on which there are insufficient funds in the borrowers account to
cover the amount of a loan payment on the date the loan payment becomes due and
within the period described in subsection (1) of this section.
(4) More than once on any single
installment. [1977 c.427 §2; 1979 c.101 §1; 1993 c.280 §1]
86.170
Prohibited mortgage provisions.
Any provision in a mortgage for a late charge except as authorized by ORS
86.160 to 86.185 shall be invalid. [1977 c.427 §3; 1997 c.631 §384]
86.175
Scope. ORS 86.160 to 86.185
shall be applicable only to late charges on loans secured by residential real
property. [1977 c.427 §4]
86.180
ORS 86.160 to 86.185 not applicable to certain mortgagees; notice to borrowers. Nothing in ORS 86.160 to 86.185 shall
pertain to a mortgage banking company or mortgage servicing company except that
if the terms of the mortgage do not conform to the requirements of ORS 86.165,
the borrower shall be notified prior to the execution of the mortgage. [1977
c.427 §5]
86.185
ORS 86.160 to 86.185 not applicable to certain loans. Nothing in ORS 86.160 to 86.185 shall apply
to loans insured, guaranteed or purchased by an instrumentality of the federal
government, whose regulations establish late charge limitations. [1977 c.427 §6]
REAL ESTATE
LOANS; SECURITY PROTECTION
86.205
Definitions for ORS 86.205 to 86.275. As used in ORS 86.205 to 86.275:
(1) Borrower means any person who
becomes obligated on a real estate loan agreement, either directly or
indirectly, and includes, but is not limited to, mortgagors, grantors under
trust deeds, vendees under conditional land sales contracts, and persons who
purchase real property securing a real estate loan agreement, whether the
persons assume the loan or purchase the property subject to the loan.
(2) Direct reduction provision or capitalization
provision means any provision which is part of a real estate loan agreement,
whether incorporated into the agreement or as part of a separately executed
document, whereby the borrower makes periodic prepayment of property taxes,
insurance premiums and similar charges to the lender or the designee of the
lender, who applies such prepayments first to accrued interest and then to the
principal amount of the loan, and upon payment of such charges, adds the amount
of such payment to the principal amount of the loan.
(3) Escrow account means any account
which is a part of a real estate loan agreement, whether incorporated into the
agreement or as part of a separately executed document, whereby the borrower
makes periodic prepayment to the lender or the designee of the lender of taxes,
insurance premiums, and similar charges, and the lender or the designee of the
lender pays the charges out of the account at the due dates.
(4) Lender means any person who makes,
extends, or holds a real estate loan agreement and includes, but is not limited
to, mortgagees, beneficiaries under trust deeds, and vendors under conditional
land sales contracts.
(5) Lenders security protection
provision means any provision which is a part of a real estate loan agreement,
whether incorporated into the agreement or as part of a separately executed
document, whereby the borrower prepays, pledges or otherwise commits cash or
other assets owned by the borrower in advance of due dates for payments of
property taxes, insurance premiums and similar charges relating to the property
securing the loan in order to assure timely payment of the charges and protect
the lenders security interest in the property, and includes, but is not
limited to, escrow accounts, direct reduction provisions, capitalization
provisions, and pledges of savings accounts.
(6) Person means individuals,
corporations, associations, partnerships and trusts, and includes, but is not
limited to, financial institutions as defined in ORS 706.008, investment
companies, insurance companies, pension funds, and mortgage companies.
(7) Real estate loan agreement or real
estate loan means any agreement providing for a loan on residential property,
including multifamily, occupied by the borrower in the amount of $100,000 or
less, secured in whole or in part by real property, or any interest therein,
located in this state, and includes, but is not limited to, mortgages, trust
deeds and conditional land sales contracts. [1975 c.337 §1; 1997 c.631 §385]
86.210
Types of lender security protection provisions allowed. A lender may require a lenders security
protection provision under ORS 86.205 to 86.275 either as a direct reduction
provision, an escrow account, or a pledge of an interest-bearing savings
account in an amount not to exceed the maximum amount which a lender may
require a borrower to deposit in a lenders security protection provision under
ORS 86.240 and bearing interest at a rate not less than the rate required on
lenders security protection provisions by ORS 86.245. [1975 c.337 §2; 1987
c.577 §1]
86.214
Application of ORS 86.210 and 86.245 to real estate loan agreements. To the extent not inconsistent with
provisions of existing real estate loan agreements and provided such agreements
are not silent with regard to a lenders security protection provision, the
provisions of ORS 86.210, 86.245 and this section shall apply to real estate
loan agreements entered into prior to, on and after October 1, 1987. To the
extent that the provisions of existing real estate loan agreements are
inconsistent with the provisions of ORS 86.210, 86.245 and this section, the
existing real estate loan agreements are silent as to a lenders security
protection provision, or any part of ORS 86.210, 86.245 and this section is
declared unconstitutional as to existing real estate loan agreements, the
provisions of ORS 86.205 to 86.275 (1985 Replacement Part) shall govern and be
in full force and effect. [1987 c.577 §4]
86.215 [1975 c.337 §§3,4,5; 1985 c.613 §2; repealed
by 1987 c.577 §5]
86.220 [1975 c.337 §6; repealed by 1987 c.577 §5]
86.225 [1975 c.337 §6a; repealed by 1987 c.577 §5]
86.230 [1975 c.337 §6b; repealed by 1987 c.577 §5]
86.235 [1975 c.337 §7; repealed by 1987 c.577 §5]
86.240
Limit on amount required in security protection escrow account; compliance with
federal laws for certain loans as compliance with state laws. (1) No lender, in connection with a real
estate loan agreement, shall require a borrower or prospective borrower:
(a) To deposit in any escrow account which
may be established in connection with the agreement, prior to or upon the date
of settlement, a sum in excess of the estimated total amount of property taxes,
insurance premiums, and similar charges which actually will be due and payable
on the date of settlement, and the pro rata portion thereof which has accrued,
plus one-sixth of the estimated total amount of the charges which will become
due and payable during the 12-month period beginning on the date of settlement;
or
(b) To deposit in any escrow account,
which may be established in connection with the agreement, in any month
beginning after the date of settlement a sum in excess of one-sixth of the
total amount of estimated property taxes, insurance premiums or similar charges
which will become due and payable during the 12-month period beginning on the
first day of the month, except that in the event the lender determines there
will be a deficiency on the due date, the lender shall not be prohibited from
requiring additional monthly deposits in the escrow account of pro rata
portions of the deficiency corresponding to the number of months from the date
of the lenders determination of the deficiency to the date upon which the
charges become due and payable.
(2) For real estate loan agreements
subject to the federal Real Estate Settlement Procedures Act of 1974 (12 U.S.C.
2601 et seq.) and to Regulation X of the federal Department of Housing and
Urban Development (24 C.F.R. 3500.1 et seq.), compliance with the Real Estate
Settlement Procedures Act and with Regulation X shall be considered to be
compliance with this section. [1975 c.337 §13; 1995 c.182 §1]
86.245
Interest on security protection deposits; exception. (1) As used in this section, discount rate
means the auction average rate on 91-day United States Treasury bills, as
established by the most recent auction of such Treasury bills, as published by
the United States Department of the Treasury, Bureau of the Public Debt, less
100 basis points.
(2) Except as provided in subsections (5)
and (7) of this section, any lender who requires a lenders security protection
provision in connection with a real estate loan agreement shall pay interest to
the borrower on funds deposited in the account at a rate not less than the
discount rate. The discount rate shall be determined with reference to the most
recent auction date before May 15 and November 15 each year.
(3) The rate of interest payable on the
account shall be adjusted semiannually to reflect changes in the discount rate.
These adjustments shall be calculated on May 15 and November 15 each year.
Adjustments calculated on May 15 shall take effect on the following July 1, and
adjustments calculated on November 15 shall take effect on the following
January 1.
(4) Interest shall be computed on the
average monthly balance in the account and shall be paid not less than
quarterly to the borrower by crediting to the escrow account the amount of the
interest due.
(5) Except as provided in subsection (6)
of this section, this section does not apply to real estate loan agreements
entered into prior to September 1, 1975, or on which the payment of interest on
a lenders security protection provision violates any state or federal law or
regulation.
(6) If federal law or regulation does not
prohibit the payment of interest on a lenders security protection provision by
federally chartered or organized lenders, this section applies to the federally
chartered or organized lenders and the state chartered or organized lenders
that are similar to the federally chartered or organized lenders with respect
to a lenders security protection provision executed in connection with real
estate loan agreement entered into prior to and in existence on September 1,
1975.
(7) This section does not apply to real
estate loan agreements made by, held for sale to or sold to the State of
86.250
Service charge prohibited where interest required. No lender requiring a lenders security
protection provision with respect to which interest is required to be paid by
the lender under ORS 86.245 shall impose a service charge in connection with
such provision. [1975 c.337 §9]
86.255
Arrangements where security protection provisions not required; information to
borrower. In any real estate
loan agreement with respect to which a lender does not require a lenders
security protection provision, the parties may mutually agree to any
arrangement whereby the borrower prepays, pledges or otherwise commits assets
in advance of due dates for payment of property taxes, insurance premiums and
similar charges relating to the real property in order to assist the borrower
in making timely payments of the charges. Prior to entering any such
arrangement, the lender shall furnish the borrower a statement in writing,
which may be set forth in the loan application:
(1) That the arrangement is not a
condition to the real estate loan agreement;
(2) If it is an escrow account, whether or
not the lender will pay interest and if interest is to be paid, the rate of
interest; and
(3) Whether or not the borrower must pay
the lender a charge for the service. If a charge is agreed to, the charge shall
not exceed the amount of interest income earned under subsection (2) of this
section. [1975 c.337 §10]
86.260
Payment of taxes where security protection provision required; credit of
discount where taxes not paid; cause of action by borrower. (1) If a lender has a requirement that the
borrower pay funds into a lenders security protection provision for the
payment of property taxes on property that is the security for the real estate
loan agreement, insurance premiums, and similar charges, and there are funds in
the account, the lender shall pay the taxes or the amount in the account if
less than the taxes due, in time to take advantage of any discount authorized
by ORS 311.505, and all other charges on or before the due dates for payments.
(2)(a) If the lender fails to pay the
taxes in accordance with subsection (1) of this section resulting in a loss of
discount to the borrower, the lender shall credit the lenders security
protection provision in an amount equal to the amount of discount denied on
account of such failure, together with any interest that has accrued on the
unpaid property taxes to the date the property taxes are finally paid.
(b) If the failure of the lender to comply
with subsection (1) of this section is willful and results in the loss to the
borrower of the discount, or if the failure to comply was not willful but upon
discovery of the failure to comply and the loss of discount, the lender fails
to credit the lenders security protection provision required by paragraph (a)
of this subsection, the borrower shall have a cause of action against the
lender to recover an amount equal to 15 times the amount of discount the
borrower would have received, together with any interest that accrued on the
unpaid property taxes to the date of recovery. The court may award reasonable
attorney fees to the prevailing party in an action under this section. [1975
c.337 §11; 1979 c.703 §15; 1981 c.897 §18; 1995 c.618 §48]
86.265
Effect of lender violation of ORS 86.205 to 86.275. A violation of ORS 86.205 to 86.275 by a
lender shall render the lenders security protection provision voidable at the
option of the borrower, and the lender shall be liable to the borrower in an
amount equal to:
(1) The borrowers actual damages or $100,
whichever is greater, and
(2) In the case of any successful action
to enforce the foregoing liability, the court costs of the action together with
reasonable attorney fees at trial and on appeal as determined by the court if
the court finds that written demand for the payment of the borrowers claim was
made on the lender not less than 10 days before the commencement of the action.
No attorney fees shall be allowed to the borrower if the court finds that the
lender tendered to the borrower, prior to the commencement of the action, an
amount not less than the damages awarded to the borrower. [1975 c.337 §14; 1981
c.897 §19]
86.270
ORS 86.205 to 86.275 inapplicable to certain loan agreements; notice to
borrower. ORS 86.205 to
86.275 shall not apply to a real estate loan agreement which is serviced or
held for sale within one year by a mortgage servicing company neither affiliated
with nor owned in whole or in part by the purchaser and which is made, extended
or held by a purchaser whose principal place of business is outside this state;
provided that if the purchaser requires a lenders security protection
provision, prior to entering into such agreement, the mortgage servicing
company shall furnish the borrower a statement in writing, which may be set
forth in the loan application, that the mortgage servicing company is not
required by the laws of this state to pay interest on the lenders security
protection provision, and specifically informing the borrower why the borrower
is not entitled to interest on the account. [1975 c.337 §15]
86.275
Severability. If any section
of ORS 86.205 to 86.275, or the application of any section to any real estate
loan agreement shall be held invalid, the remainder of ORS 86.205 to 86.275,
and the application of ORS 86.205 to 86.275 to any real estate loan agreement
other than the one or those to which it is held invalid, shall not be affected
thereby. [1975 c.337 §12]
86.310 [Amended by 1955 c.21 §1; repealed by 1961
c.726 §427]
86.315 [1953 c.700 §2; repealed by 1961 c.726 §427]
86.320 [Repealed by 1961 c.726 §427]
86.330 [Repealed by 1961 c.726 §427]
86.340 [Repealed by 1961 c.726 §427]
86.350 [Amended by 1955 c.182 §1; repealed by 1961
c.726 §427]
86.360 [Repealed by 1961 c.726 §427]
86.370 [Amended by 1957 c.404 §1; repealed by 1961
c.726 §427]
86.380 [Repealed by 1961 c.726 §427]
86.390 [Repealed by 1961 c.726 §427]
86.400 [Repealed by 1961 c.726 §427]
CHATTEL
MORTGAGES
86.405
Secretary of State to furnish statement of mortgages filed before September 1,
1963; fee. Upon the payment
of a fee of 50 cents for each name to be searched for chattel mortgages filed
under former ORS 86.370 or 86.390, prior to September 1, 1963, the Secretary of
State shall furnish to any person applying therefor a statement of any
mortgages noted on the indexes created under former ORS 86.380, or if no
mortgages are noted, a statement to that effect. All such fees received by the
Secretary of State shall be promptly paid to the State Treasurer and placed in
the General Fund. [1961 c.726 §409]
86.410 [Repealed by 1961 c.726 §427]
86.420 [Repealed by 1961 c.726 §427]
86.430 [Repealed by 1961 c.726 §427]
86.440
Discharge of mortgage recorded with county recording officer. Whenever any mortgage recorded under the
provisions of ORS 86.350 (1959 Replacement Part) is paid or otherwise
satisfied, it shall be discharged by the recording with the recording officer
of a certificate of such owner, executed and acknowledged with the same
formalities as are prerequisite to the recording of any such mortgage, showing
the date of execution, date of recording, and recording number of the record thereof,
and that such mortgage has been fully discharged. [Amended by 1999 c.654 §4]
86.450 [Repealed by 1961 c.726 §427]
86.460
Discharge of mortgage filed with Secretary of State; fee. In the event of the satisfaction or release
of any chattel mortgage, a certified copy of which has been filed with the
Secretary of State prior to September 1, 1963; the person so satisfying or
releasing the mortgage shall send a duly executed discharge or certified copy
thereof, with a fee of 25 cents, to the Secretary of State, who shall note such
discharge in an appropriate column of the index kept by the Secretary of State.
All such fees received by the Secretary of State shall be promptly paid to the
State Treasurer and placed in the General Fund. [Amended by 1961 c.726 §407]
86.470
Discharge, assignment and foreclosure of mortgages on chattels registered and
licensed by Department of Transportation. The recording officer of counties having less than 50,000 population
on the last day of each calendar month, and the recording officer of counties
having more than 50,000 population on the last day of each calendar week, shall
notify the Department of Transportation, upon forms to be provided by the
department, of the partial or full satisfaction, assignment or foreclosure
during such period of all mortgages theretofore certified to the department
prior to September 1, 1963, as formerly provided in ORS 86.390. The notice
shall completely identify the mortgage so satisfied, assigned or foreclosed;
and the department thereupon shall note on each index margin such satisfaction,
assignment or foreclosure. [Amended by 1961 c.726 §408]
86.480 [Repealed by 1961 c.726 §427]
86.490 [Repealed by 1961 c.726 §427]
86.500 [Amended by 1955 c.30 §1; repealed by 1961
c.726 §427]
86.510 [Repealed by 1961 c.726 §427]
86.520 [Repealed by 1961 c.726 §427]
INVESTMENTS;
FEDERAL HOUSING ADMINISTRATOR
86.610
Power of financial institutions, fiduciaries and others to make loans secured
by property insured by Federal Housing Administrator. Financial institutions as defined in ORS
706.008, trustees, guardians, conservators, executors, administrators, other
fiduciaries and all other persons, associations and corporations, subject to
the laws of this state, may make such loans, secured by real property or
leasehold, as the Federal Housing Administrator insures or makes a commitment
to insure, and may obtain such insurance. [Amended by 1967 c.359 §678; 1973
c.823 §93; 1997 c.631 §386]
86.620
Investment of funds of financial institutions, fiduciaries and others in bonds
and mortgages accepted by Federal Housing Administrator, debentures issued
thereby, and obligations of national mortgage associations. Financial institutions as defined in ORS
706.008, trustees, guardians, conservators, executors, administrators, other
fiduciaries and all other persons, associations and corporations, subject to
the laws of this state, may invest their funds, and the money in their custody
or possession, eligible for investment, in bonds and mortgages on real property
insured by the Federal Housing Administrator, in debentures issued by the
Federal Housing Administrator, and in obligations of national mortgage
associations. [Amended by 1967 c.359 §679; 1973 c.823 §94; 1997 c.631 §387]
86.630
Eligibility of securities described in ORS 86.620 as security for deposits,
investment or reserve of securities. Whenever, by statute, collateral is required as security for the
deposit of public or other funds, or deposits are required to be made with any
public official or department, or an investment of capital or surplus, or a
reserve or other fund is required to be maintained consisting of designated
securities, the securities described in ORS 86.620 shall be eligible for such
purposes.
86.640
Applicability of other laws requiring security or regulating loans and
investments. No law of this
state requiring security upon which loans or investments may be made, or
prescribing the nature, amount or form of such security, or prescribing or
limiting the period for which loans or investments may be made, shall apply to
loans or investments made pursuant to ORS 86.610 and 86.620.
TRUST DEEDS
86.705
Definitions for ORS 86.705 to 86.795. As used in ORS 86.705 to 86.795, unless the context requires
otherwise:
(1) Beneficiary means the person named
or otherwise designated in a trust deed as the person for whose benefit a trust
deed is given, or the persons successor in interest, and who shall not be the
trustee unless the beneficiary is qualified to be a trustee under ORS 86.790
(1)(d).
(2) Grantor means the person conveying
an interest in real property by a trust deed as security for the performance of
an obligation.
(3) Residential trust deed means a trust
deed on property upon which are situated four or fewer residential units and
one of the residential units is occupied as the principal residence of the
grantor, the grantors spouse or the grantors minor or dependent child at the
time a trust deed foreclosure is commenced.
(4) Residential unit means an
improvement designed for residential use.
(5) Trust deed means a deed executed in
conformity with ORS 86.705 to 86.795, and conveying an interest in real
property to a trustee in trust to secure the performance of an obligation owed
by the grantor or other person named in the deed to a beneficiary.
(6) Trustee means a person, other than
the beneficiary, to whom an interest in real property is conveyed by a trust
deed, or such persons successor in interest. The term includes a person who is
an employee of the beneficiary, if the person is qualified to be a trustee
under ORS 86.790. [1959 c.625 §1; 1961 c.616 §1; 1975 c.618 §1; 1983 c.719 §1;
1985 c.817 §1; 1989 c.190 §1]
86.710
Trust deeds authorized to secure performance of an obligation; methods of
foreclosure after breach.
Transfers in trust of an interest in real property may be made to secure the
performance of an obligation of a grantor, or any other person named in the
deed, to a beneficiary. Where any transfer in trust of an interest in real
property is made pursuant to the provisions of ORS 86.705 to 86.795 to secure
the performance of an obligation, a power of sale is conferred upon the
trustee. The power of sale may be exercised after a breach of the obligation
for which the transfer is security; and a trust deed, executed in conformity
with ORS 86.705 to 86.795, may be foreclosed by advertisement and sale in the
manner provided in ORS 86.705 to 86.795, or, at the option of the beneficiary,
may be foreclosed by the beneficiary as provided by law for the foreclosure of
mortgages on real property. [1959 c.625 §2; 1961 c.616 §2; 1965 c.457 §1; 1975
c.618 §2; 1979 c.879 §1; 1983 c.719 §2; 1987 c.480 §1]
86.715
Trust deed deemed to be mortgage on real property; applicability of mortgage
laws. A trust deed is deemed
to be a mortgage on real property and is subject to all laws relating to
mortgages on real property except to the extent that such laws are inconsistent
with the provisions of ORS 86.705 to 86.795, in which event the provisions of
ORS 86.705 to 86.795 shall control. For the purpose of applying the mortgage
laws, the grantor in a trust deed is deemed the mortgagor and the beneficiary
is deemed the mortgagee. [1959 c.625 §21]
86.720
Reconveyance upon performance; liability for failure to reconvey; release of
trust deed. (1) Within 30
days after performance of the obligation secured by the trust deed, the
beneficiary shall deliver a written request to the trustee to reconvey the
estate of real property described in the trust deed to the grantor. Within 30
days after the beneficiary delivers the written request to reconvey to the
trustee, the trustee shall reconvey the estate of real property described in
the trust deed to the grantor. In the event the obligation is performed and the
beneficiary refuses to request reconveyance or the trustee refuses to reconvey
the property, the beneficiary or trustee so refusing shall be liable as
provided by ORS 86.140 in the case of refusal to execute a discharge or
satisfaction of a mortgage on real property. The trustee may charge a
reasonable fee for all services involved in the preparation, execution and
recordation of any reconveyance executed pursuant to this section.
(2) If a full reconveyance of a trust deed
has not been executed and recorded pursuant to the provisions of subsection (1)
of this section within 60 calendar days of the date the obligation secured by
the trust deed was fully satisfied, then:
(a) If the obligation was satisfied by a
title insurance company or insurance producer or by payment through an escrow
transacted by a title insurance company or insurance producer, upon the written
request of the grantor or the grantors successor in interest, the tender of
reasonable charges and the compliance with the notice requirements of
subsection (3) of this section, the title insurance company or insurance
producer shall prepare, execute and record a release of trust deed.
(b) Upon compliance with the notice
requirements of subsection (3) of this section, any title insurance company or
insurance producer may prepare, execute and record a release of trust deed.
(3) Prior to the issuance and recording of
a release pursuant to this section, the title insurance company or insurance
producer shall give notice of the intention to record a release of trust deed
to the beneficiary of record and, if different, the party to whom the full
satisfaction payment was made. The notice shall:
(a) Provide that the parties to whom the
notice is sent shall have a period of 30 days from the date of mailing to send
to the title insurance company or insurance producer their written objections
to the execution and recording of the release of trust deed;
(b) Be sent by first class mail with
postage prepaid, addressed to the named interested parties at their last-known
addresses; and
(c) Identify the trust deed by the name of
the original grantor and any successor in interest on whose behalf payment was
made and by the recording reference.
(4) The release of trust deed shall recite
on the first page that it has been executed and recorded pursuant to the
provisions of this section. The release shall be properly acknowledged and
shall set forth:
(a) The name of the beneficiary to whom
the payment was made;
(b) The name of the original grantor of
the trust deed and any successor in interest on whose behalf payment was made;
(c) The recording reference to the trust
deed that is to be released;
(d) A recital that the obligation secured
by the trust deed has been paid in full;
(e) The date and amount of payment;
(f) The date of mailing of notice required
by this section; and
(g) A recital that no written objections
were received by the title insurance company or insurance producer.
(5) The release of trust deed executed
pursuant to this section shall be entitled to recordation and, when recorded,
shall be deemed to be the equivalent of a reconveyance of a trust deed.
(6) The title insurance company or
insurance producer shall not record or cause to be recorded a release of trust
deed when any of the following circumstances exist:
(a) The 30-day period following notice
given under this section has not expired; or
(b) Written objection to such recordation
has been received by the title insurance company or insurance producer from any
of the parties to whom notice was sent.
(7) The trustee, title insurance company
or insurance producer may charge a reasonable fee for all services involved in
the preparation, execution, recordation and compliance with this section, to
effect the release of trust deed.
(8) Subsection (2) of this section does
not excuse the beneficiary or trustee from compliance with subsection (1) of
this section.
(9) In addition to any other remedy
provided by law, a title insurance company or insurance producer preparing,
executing or recording a release of trust deed shall be liable to any party for
damages that the party sustains by reason of the negligence or willful
misconduct of the title insurance company or insurance producer in connection
with the issuance, execution or recording of the release pursuant to this
section. Except as provided in subsection (10) of this section, the court may
award reasonable attorney fees to the prevailing party in an action under this
section.
(10) The court may not award attorney fees
to a prevailing defendant under the provisions of subsection (9) of this
section if the action under this section is maintained as a class action
pursuant to ORCP 32.
(11) As used in this section, insurance
producer means an authorized issuer of title insurance policies of a title
insurance company who is licensed as an insurance producer for that purpose
pursuant to ORS chapter 744.
(12) Subsections (2) to (11) of this
section shall be applicable only to full reconveyances of the property
described in the trust deed and not to reconveyances of parts or portions of
the property.
(13) Subsections (1) to (12) of this
section are applicable to all trust deeds, whether executed before, on or after
November 4, 1993.
(14) A title insurance company or agent is
not required to prepare, execute and record a release of trust deed under
subsections (2) to (12) of this section if the obligation secured by the trust
deed was satisfied prior to November 4, 1993. [1959 c.625 §18; 1993 c.648 §2;
1995 c.696 §15; 2001 c.254 §1; 2003 c.364 §49]
86.725
Time within which foreclosure must be commenced. The foreclosure of a trust deed by
advertisement and sale or the foreclosure of a trust deed by judicial procedure
shall be commenced within the time, including extensions, provided by ORS
88.110 and 88.120 for the foreclosure of a mortgage on real property. [1959
c.625 §20]
86.730 [1959 c.625 §§17,22; repealed by 1961 c.616 §8]
86.735
Foreclosure by advertisement and sale. The trustee may foreclose a trust deed by advertisement and sale in
the manner provided in ORS 86.740 to 86.755 if:
(1) The trust deed, any assignments of the
trust deed by the trustee or the beneficiary and any appointment of a successor
trustee are recorded in the mortgage records in the counties in which the
property described in the deed is situated; and
(2) There is a default by the grantor or
other person owing an obligation, the performance of which is secured by the
trust deed, or by their successors in interest with respect to any provision in
the deed which authorizes sale in the event of default of such provision; and
(3) The trustee or beneficiary has filed
for record in the county clerks office in each county where the trust
property, or some part of it, is situated, a notice of default containing the
information required by ORS 86.745 and containing the trustees or beneficiarys
election to sell the property to satisfy the obligation; and
(4) No action has been instituted to
recover the debt or any part of it then remaining secured by the trust deed,
or, if such action has been instituted, the action has been dismissed, except
that:
(a) Subject to ORS 86.010 and the
procedural requirements of ORCP 79 and 80, an action may be instituted to
appoint a receiver or to obtain a temporary restraining order during
foreclosure of a trust deed by advertisement and sale, except that a receiver
shall not be appointed with respect to a single-family residence which is
occupied as the principal residence of the grantor, the grantors spouse or the
grantors minor or dependent child.
(b) An action may be commenced for the
judicial or nonjudicial foreclosure of the same trust deed as to any other
property covered thereby, or any other trust deeds, mortgages, security
agreements or other consensual or nonconsensual security interests or liens securing
repayment of the debt. [1959 c.625 §§4,5; 1965 c.457 §2; 1983 c.719 §3; 1985
c.817 §2; 1989 c.190 §2]
86.740
Notice of sale to be given to certain persons. (1) Subsequent to recording notice of
default as provided in ORS 86.735 and at least 120 days before the day the
trustee conducts the sale, notice of the sale shall be served pursuant to ORCP
7 D(2) and 7 D(3) or mailed by both first class and certified mail with return
receipt requested, to the last-known address of the following persons or their
legal representatives, if any:
(a) The grantor in the trust deed.
(b) Any successor in interest to the
grantor whose interest appears of record, or of whose interest the trustee or
the beneficiary has actual notice.
(c) Any person, including the Department
of Revenue or any other state agency, having a lien or interest subsequent to
the trust deed if the lien or interest appears of record or the beneficiary has
actual notice of the lien or interest.
(d) Any person requesting notice as
provided in ORS 86.785.
(2) A notice served by mail under
subsection (1) of this section is effective when the notice is mailed.
(3)(a) The disability, insanity or death
of any person to whom notice of sale must be given under this section does not
delay or impair in any way the trustees right under a trust deed to foreclose
under the deed. If the disability, insanity or death occurs prior to the
recording of notice of default, the notice shall be given instead to the
guardian, the conservator of the estate of the person or the administrator or
personal representative of the person, as the case may be, in the manner and by
the time set forth in this section.
(b) If the disability, insanity or death
of any person to whom notice of sale must be given under this section occurs on
or after the recording of notice of default, the trustee shall, if and when the
trustee has knowledge of the disability, insanity or death, promptly give the
guardian, conservator of the estate or the administrator or personal
representative, as the case may be, the notice provided in ORS 86.745. This
notice shall be given by first class and certified mail with return receipt
requested, to the last-known address of the guardian, conservator or
administrator or personal representative.
(c) In the event there is no administrator
or personal representative of the estate of the person to whom notice of sale
must be given under this section, the notice may be given instead to the heirs
at law or devisees of the deceased person in the manner and by the time set
forth in this section. [1959 c.625 §6; 1961 c.616 §3; 1965 c.457 §3; 1973 c.823
§95; 1979 c.879 §2; 1983 c.719 §4; 1989 c.190 §3; 2005 c.129 §1]
86.742
Failure to give notice of sale; action by omitted person; defense; pleading and
proving knowledge of sale; attorney fees; exclusive remedy. (1) If the trustee fails to give notice of
the sale to any person entitled to notice under ORS 86.740 (1)(c), and such
person did not have actual notice of the sale at least 25 days prior to the
date the trustee conducted the sale, such omitted person shall have the same
rights possessed by the holder of a junior lien or interest who was omitted as
a party defendant in a judicial foreclosure proceeding, and the purchaser at
the trustees sale or the purchasers heirs, assigns or transferees, shall have
the same rights possessed by a purchaser at a sheriffs sale following a
judicial foreclosure.
(2) The omitted person may also commence
an action against the trustee in the circuit court in the county where the real
property is located. In an action against the trustee, the omitted person shall
be entitled to damages upon proof that:
(a) The trustee did not give notice of the
sale to the omitted person in the manner required by ORS 86.740 (1)(c) and
86.750;
(b) A search of the record under the name
of the grantor as it appears on the trust deed, or the name of the grantors
successor in interest, would have revealed the omitted persons interest;
(c) The omitted person could and would
have cured the default under ORS 86.753; and
(d) The omitted person sustained actual
damages as a result of such persons loss of the opportunity to cure the
default under ORS 86.753 (1).
(3) In an action against the trustee under
subsection (2) of this section, any defendant or third party defendant may move
for dismissal on the ground that the omitted person would not or could not have
cured the default and reinstated the trust deed if the omitted person had
received the notice required by ORS 86.740 (1)(c). The court shall hold a
hearing on such motion prior to any hearing on any motion for summary judgment,
and prior to trial of the action. The court shall deny the motion only if the
omitted person produces affidavits or other evidence sufficient for a
reasonable jury to find, applying a standard of clear and convincing evidence,
that the omitted person had the financial ability to cure the default under ORS
86.753 prior to the date of the trustees sale, and that the omitted person
would have done so had the omitted person received the notice required by ORS
86.740 (1)(c). If the court grants the motion to dismiss it shall award
attorney fees pursuant to subsection (5) of this section.
(4) In any action against the trustee or
any other party under this section the omitted person shall plead that the
omitted person did not have actual knowledge of the sale at least 25 days prior
to the date the trustee conducted the sale, but thereafter the defendant shall
have the burden of proving that the omitted person did have such notice.
(5) In all suits brought under this
section, the applicable court may, upon entering judgment, allow to the
prevailing party as a part of the costs a reasonable amount for attorney fees
at trial and on appeal.
(6) The remedies described in subsections
(1) to (5) of this section shall be the sole remedies available to a person
entitled to notice of foreclosure by advertisement and sale under ORS 86.740
(1)(c), who failed to receive such notice. Such a persons failure to redeem or
to commence an action against the trustee within five years of the date of a
trustees sale under ORS 86.755 shall bar any action under this section or any
other applicable law. [1985 c.817 §9; 1995 c.618 §51]
86.745
Contents of notice of sale.
The notice of sale shall set forth:
(1) The names of the grantor, trustee and
beneficiary in the trust deed, and the mailing address of the trustee.
(2) A description of the property covered
by the trust deed.
(3) The book and page of the mortgage
records where the trust deed is recorded.
(4) The default for which the foreclosure
is made.
(5) The sum owing on the obligation
secured by the trust deed.
(6) The election to sell the property to
satisfy the obligation.
(7) The date, time and place of the sale,
which shall be held at a designated time after 9 a.m. and before 4 p.m. based
on the standard of time established by ORS 187.110 and at a designated place in
the county or one of the counties where the property is situated.
(8) The right under ORS 86.753 to have the
proceeding dismissed and the trust deed reinstated by payment of the entire
amount then due, together with costs, trustees and attorneys fees, and by
curing any other default complained of in the notice of default, at any time
prior to five days before the date last set for the sale. [1959 c.625 §7; 1961
c.616 §4; 1965 c.457 §4; 1983 c.719 §5; 1985 c.817 §3; 2003 c.251 §4]
86.750
Service and publication of notice; recording proof of compliance. (1)(a) Except as provided in paragraph (b)
of this subsection, the notice prescribed in ORS 86.745 shall be served upon an
occupant of the property described in the trust deed in the manner in which a
summons is served pursuant to ORCP 7 D(2) and 7 D(3) at least 120 days before
the day the trustee conducts the sale.
(b)(A) If service cannot be effected on an
occupant as provided in paragraph (a) of this subsection on the first attempt,
the person attempting service shall post a copy of the notice in a conspicuous
place on the property on the date of the first attempt. The person attempting
service shall make a second attempt to effect service on a day that is at least
two days after the first attempt.
(B) If service cannot be effected on an
occupant as provided in paragraph (a) of this subsection on the second attempt,
the person attempting service shall post a copy of the notice in a conspicuous
place on the property on the date of the second attempt. The person attempting
service shall make a third attempt to effect service on a day that is at least
two days after the second attempt.
(C) If service cannot be effected on an
occupant as provided in paragraph (a) of this subsection on the third attempt,
the person attempting service shall send a copy of the notice, bearing the word
occupant as the addressee, to the property address by first class mail with
postage prepaid.
(c) Service on an occupant is deemed
effected on the earlier of the date that notice is served as provided in
paragraph (a) of this subsection or the first date on which notice is posted as
described in paragraph (b)(A) of this subsection.
(2) A copy of the notice of sale shall be
published in a newspaper of general circulation in each of the counties in
which the property is situated once a week for four successive weeks. The last
publication shall be made more than 20 days prior to the date the trustee
conducts the sale.
(3) On or before the date the trustee
conducts the sale, the trustee shall file the following with respect to the
notice of sale for recording in the official record of the county or counties in
which the property described in the deed is situated:
(a) An affidavit of mailing, if any;
(b) An affidavit of service, if any;
(c) An affidavit of service attempts and
posting, if any; and
(d) An affidavit of publication. [1959
c.625 §8; 1961 c.616 §5; 1965 c.457 §5; 1979 c.879 §3; 1983 c.719 §6; 1985
c.817 §4; 2007 c.165 §1]
86.753
Discontinuance of foreclosure proceedings after cure of default. (1) Where a trustee has commenced
foreclosure of a trust deed by advertisement and sale, the grantor, the grantors
successor in interest to all or any part of the trust property, any beneficiary
under a subordinate trust deed, or any person having a subordinate lien or
encumbrance of record on the property, may cure the default or defaults at any
time prior to five days before the date last set for the sale. If the default
consists of a failure to pay, when due, sums secured by the trust deed, the
default may be cured by paying the entire amount due at the time of cure under
the terms of the obligation, other than such portion as would not then be due
had no default occurred. Any other default of the trust deed obligation that is
capable of being cured may be cured by tendering the performance required under
the obligation or trust deed. In any case, and in addition to paying the sums
or tendering the performance necessary to cure the default, the person
effecting the cure shall pay to the beneficiary all costs and expenses actually
incurred in enforcing the obligation and trust deed, together with trustees
and attorney fees in the amount of:
(a) A total of $1,000 for both trustees
fees and attorney fees, or the amount actually charged by the trustee and
attorney, whichever is less, if the trust deed is a residential trust deed; or
(b) Reasonable attorney fees and trustees
fees actually charged by the trustee and attorney if the trust deed is not a
residential trust deed. Any person entitled to cure the default may, either
before or after reinstatement, request any court of competent jurisdiction to
determine the reasonableness of the fee demanded or paid as a condition of
reinstatement. The court may award attorney fees to the prevailing party. An
action to determine reasonable attorney fees or trustees fees under this
section shall not forestall any sale or affect its validity.
(2) After cure of the default under
subsection (1) of this section, all proceedings under ORS 86.740 to 86.755
shall be dismissed by the trustee, and the obligation and trust deed shall be
reinstated and shall remain in force the same as if no acceleration had
occurred. [1983 c.719 §11; 1985 c.817 §5; 1989 c.190 §4; 1999 c.561 §1]
86.755
(2) The trustee or the attorney for the
trustee, or any agent designated by the trustee or the attorney conducting the
sale, may postpone the sale for one or more periods totaling not more than 180
days from the original sale date, giving notice of each adjournment by public
proclamation made at the time and place set for sale. The proclamation may be
made by the trustee, the attorney, or any agent designated by the trustee or
the attorney.
(3) The purchaser shall pay at the time of
sale the price bid, and, within 10 days following payment, the trustee shall
execute and deliver the trustees deed to the purchaser.
(4) The trustees deed shall convey to the
purchaser the interest in the property which the grantor had, or had the power
to convey, at the time of the execution by the grantor of the trust deed,
together with any interest the grantor or the grantors successors in interest
acquire after the execution of the trust deed.
(5) The purchaser at the trustees sale
shall be entitled to possession of the property on the 10th day following the
sale, and any persons remaining in possession after that day under any
interest, except one prior to the trust deed or created voluntarily by the
grantor or a successor of the grantor, shall be deemed to be tenants at
sufferance. All persons not holding under an interest prior to the trust deed
may be removed from possession by following the procedures set out in ORS
105.105 to 105.168 or other applicable judicial procedure, provided that a
person holding under an interest created voluntarily by the grantor or a
successor of the grantor must first receive 30 days written notice of the
intent to remove that person served no earlier than 30 days before the date
first set for the sale. Notices under this subsection shall be served by first
class mail. First class mail for purposes of this section does not include
certified or registered mail, or any other form of mail which may delay or
hinder actual delivery of mail to the addressee.
(6) Notwithstanding subsection (2) of this
section, except when a beneficiary has participated in obtaining a stay,
foreclosure proceedings that are stayed by order of the court, by proceedings
in bankruptcy or for any other lawful reason shall, after release from the
stay, continue as if uninterrupted, if within 30 days after release the trustee
gives amended notice of sale by registered or certified mail to the last-known
address of those persons listed in ORS 86.740 and 86.750 (1) and to the address
provided by each person who was present at the time and place set for the sale
which was stayed. The amended notice of sale shall:
(a) Be given at least 20 days prior to the
amended date of sale;
(b) Set an amended date of sale which may
be the same as the original sale date, or date to which the sale was postponed,
provided the requirements of ORS 86.740, 86.750 and this subsection are
satisfied;
(c) Specify the time and place for sale;
(d) Conform to the requirements of ORS
86.745; and
(e) State that the original sale
proceedings were stayed and the date the stay terminated.
(7) If the publication of the notice of
sale was not completed prior to the date the foreclosure proceedings were
stayed by order of the court, by proceedings in bankruptcy or for any other
lawful reason, after release from the stay, in addition to complying with the
provisions of subsection (6) of this section, the trustee shall complete the
publication by publishing an amended notice of sale which states that the
notice has been amended following release from the stay, and which contains the
amended date of sale. The amended notice shall be published in a newspaper of general
circulation in each of the counties in which the property is situated once a
week for four successive weeks, except that the required number of publications
shall be reduced by the number of publications that were completed prior to the
effective date of the stay. The last publication shall be made more than 20
days prior to the date the trustee conducts the sale. [1959 c.625 §9; 1965
c.457 §6; 1983 c.719 §7; 1985 c.817 §6; 1989 c.190 §5; 1989 c.506 §1]
86.757
Request for information from trustee. (1) Not later than 15 days before the date of a sale of property set
forth in the notice of sale under ORS 86.745, the grantor, an occupant, a
holder of a junior lien or any other person interested in bidding at the sale
may send a written request to the trustee requesting that the trustee provide a
written statement of information as described in ORS 86.759.
(2) The written request under subsection
(1) of this section shall be sent to the trustee at the address given in the
notice of sale by:
(a) Certified mail, return receipt
requested; or
(b) Personal delivery.
(3) The written request under subsection
(1) of this section shall include a mailing address, a facsimile number or an
electronic mail address to which the trustee shall send the written statement
of information.
(4) The trustee is not required to respond
to a written request that does not include an address, facsimile number or
electronic mail address described in subsection (3) of this section.
(5) Upon receiving a written request under
subsection (1) of this section, the trustee shall send the written statement of
information to the address, facsimile number or electronic mail address
provided in the written request at least seven days prior to the date of the
sale. If the person requesting the written statement of information provided a
mailing address, the trustee shall send the written statement of information by
certified mail, return receipt requested and by first class mail. [2003 c.251 §2]
86.759
Information provided by trustee. (1) The written statement of information provided by a trustee under
ORS 86.757 shall include:
(a) A statement of the exact amount
required, as of a specified date, to cure the default or satisfy the
obligation, including the costs of foreclosure, trustee fees, attorney fees and
per diem interest; and
(b) A description of any other performance
necessary to cure the default or satisfy the obligation.
(2) If the amount required to cure the
default or satisfy the obligation is not calculable to an exact amount, the
trustee may estimate the maximum amount required to cure the default or satisfy
the obligation.
(3) If the trustee does not provide the
written statement of information within the time specified in ORS 86.757, the
trustee may postpone the sale of the property to provide the person requesting
the written statement of information at least seven days between receipt of the
statement and the date of the sale.
(4) A person requesting a written
statement of information under ORS 86.757 has the rights of an omitted person
under ORS 86.742 if:
(a) The person requesting the statement
proves that the person sent a written request under ORS 86.757 at least 15 days
before the date of sale; and
(b) The trustee cannot prove that the
trustee sent the written statement of information at least seven days before
the date of the sale.
(5) The provisions of this section and ORS
86.757 do not affect the duty of beneficiaries to provide information to
grantors. [2003 c.251 §3]
86.760 [1959 c.625 §10; 1961 c.616 §6; 1965 c.457 §7;
1979 c.879 §4; repealed by 1983 c.719 §13]
86.765
Disposition of proceeds of sale. The trustee shall apply the proceeds of the trustees sale as follows:
(1) To the expenses of the sale, including
the compensation of the trustee, and a reasonable charge by the attorney.
(2) To the obligation secured by the trust
deed.
(3) To all persons having recorded liens
subsequent to the interest of the trustee in the trust deed as their interests
may appear in the order of their priority.
(4) The surplus, if any, to the grantor of
the trust deed or to the successor in interest of the grantor entitled to such
surplus. [1959 c.625 §11; 1965 c.457 §8]
86.770
Effect of sale. (1) A sale
made by a trustee under ORS 86.705 to 86.795 shall foreclose and terminate all
interest in the property covered by the trust deed of all persons to whom
notice is given under ORS 86.740 and 86.750 and of any other person claiming
by, through or under such persons, and such persons shall have no right to
redeem the property from the purchaser at the trustees sale. The failure to
give notice to any of these persons shall not affect the validity of the sale
as to persons so notified.
(2) Except as provided in subsection (4)
of this section, no other or further action shall be brought, nor judgment
entered for any deficiency, against the grantor, or the grantors successor in
interest, if any, on the note, bond, or other obligation secured by the trust
deed or against any other person obligated on such note, bond or other obligation
after a sale is made:
(a) By a trustee under ORS 86.705 to
86.795; or
(b) Under a judicial foreclosure of a
residential trust deed.
(3) Notwithstanding ORS 88.070, when there
is a judicial foreclosure of a trust deed that is not a residential trust deed,
the judgment shall provide that if the sale proceeds are insufficient to
satisfy the judgment, execution may issue for any amount by which the unpaid
balance of the obligation secured by the trust deed exceeds the net sale
proceeds payable to the beneficiary.
(4) Nothing in this section shall preclude
an action judicially or nonjudicially foreclosing the same trust deed as to any
other property covered thereby, or any other trust deeds, mortgages, security
agreements, or other consensual or nonconsensual security interest or liens
covering any other real or personal property security for the note, bond or
other obligation secured by the trust deed under which a sale has been made or
an action against a guarantor to the extent of any remaining deficiency
following judicial foreclosure. A guarantor of an obligation secured by a
residential trust deed shall not have the right to recover any deficiency from
the grantor or any successor in interest of the grantor. [1959 c.625 §§12, 13;
1965 c.457 §9; 1981 c.811 §1; 1983 c.719 §8; 1985 c.817 §7; 1989 c.190 §6; 1997
c.786 §1; 2007 c.166 §16]
86.775
Contents of trustees deed to purchaser. The trustees deed to the purchaser at the trustees sale shall
contain, in addition to a description of the property conveyed, a recital of
the facts concerning the default, the notice given, the conduct of the sale and
the receipt of the purchase money from the purchaser. [1959 c.625 §14]
86.780
Recitals in trustees deed and certain affidavits as prima facie or conclusive
evidence. When the trustees
deed is recorded in the deed records of the county or counties where the
property described in the deed is situated, the recitals contained in the deed
and in the affidavits required under ORS 86.750 (3) shall be prima facie
evidence in any court of the truth of the matters set forth therein, but the
recitals shall be conclusive in favor of a purchaser for value in good faith
relying upon them. [1959 c.625 §15; 1983 c.719 §12; 1985 c.565 §8]
86.785
Requests for copies of notice of default or notice of sale. At any time subsequent to the recordation of
a trust deed and prior to a recording of notice of default under the deed, any
person desiring a copy of any notice of default or any notice of sale under a
trust deed as provided in ORS 86.740 (1) may cause to be filed for record in
the county clerks office of the county or counties in which any part or parcel
of the real property is situated, a duly acknowledged request for a copy of any
notice of sale or default where service is made upon the trustee. The request
shall contain the name and address of the person requesting copies of the
notice or notices and shall identify the trust deed by stating the names of the
parties to the deed, the date of recordation of the deed and the book and page
where the deed is recorded. The county clerk shall immediately make a
cross-reference of the request to the trust deed, either on the margin of the
page where the trust deed is recorded or in some other suitable place. No
request, statement or notation placed on the record pursuant to this section
shall affect title to the property or be deemed notice to any person that any
person so recording the request has any right, title, interest in, lien or
charge upon the property referred to in the trust deed. [1959 c.625 §16]
86.790
Qualifications of trustee; appointment of successor trustee; duty of trustee. (1) The trustee of a trust deed under ORS
86.705 to 86.795 shall not be required to comply with the provisions of ORS
chapters 707 and 709 and shall be:
(a) Any attorney who is an active member
of the Oregon State Bar;
(b) A financial institution or trust
company, as defined in ORS 706.008, that is authorized to do business under the
laws of Oregon or the United States;
(c) A title insurance company authorized
to insure title to real property in this state, its subsidiaries, affiliates,
insurance producers or branches;
(d) The
(e) Escrow agents licensed under ORS
696.505 to 696.590.
(2) An attorney who is a trustee under
subsection (1)(a) of this section may represent the beneficiary in addition to
performing the duties of trustee.
(3) At any time after the trust deed is
executed, the beneficiary may appoint in writing another qualified trustee. If
the appointment of the successor trustee is recorded in the mortgage records of
the county or counties in which the trust deed is recorded, the successor
trustee shall be vested with all the powers of the original trustee.
(4) A trustee or successor trustee is a
necessary and proper party to any proceeding to determine the validity of or
enjoin any private or judicial proceeding to foreclose a trust deed, but a
trustee or successor trustee is neither a necessary nor a proper party to any
proceeding to determine title to the property subject to the trust deed, or to
any proceeding to impose, enforce or foreclose any other lien on the subject
property.
(5) Nothing in ORS 86.705 to 86.795
imposes a duty on the trustee or successor trustee to notify any person of any
proceeding with respect to such person, except a proceeding initiated by the
trustee or successor trustee.
(6) A trustee or the attorney for the
trustee or any agent designated by the trustee or the attorney may announce and
accept a bid from the beneficiary whether or not the beneficiary is present at
the sale.
(7) The trustee or successor trustee shall
have no fiduciary duty or fiduciary obligation to the grantor or other persons
having an interest in the property subject to the trust deed. The trustee or
successor trustee shall not be relieved of the duty to reconvey the property
subject to the trust deed to the grantor upon request for reconveyance by the
beneficiary. [1959 c.625 §3; 1967 c.359 §680; 1975 c.618 §2a; 1979 c.879 §5;
1981 c.192 §1; 1983 c.719 §9; 1989 c.190 §7; 1997 c.70 §1; 1997 c.631 §388;
2003 c.364 §50]
86.795
Compensation of trustee. The
charge of a trustee for the performance of powers and duties of foreclosure by
advertisement and sale imposed under ORS 86.705 to 86.795 shall not exceed 50
percent of the compensation allowable to an executor or administrator under ORS
116.173 or a minimum charge of $100. Such compensation shall be based upon the
amount due on the obligation, both principal and interest, at the time of the
trustees sale. [1959 c.625 §19; 1961 c.616 §7; 1965 c.457 §10]
PENALTIES
86.990
Penalties. Violation of ORS
86.040 is punishable, upon conviction, by a fine not exceeding $500 or
imprisonment in the county jail not exceeding six months, or both. [Amended by
1961 c.726 §410]
_______________
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