Oregon Statutes 407.375 – Sale of foreclosed properties; improvement in lieu of down payment; interest rate; redemption of property; rules
(1) When the Department of Veterans’ Affairs offers for sale a home or farm obtained for and in behalf of the state under ORS § 407.135 and 407.145 (1), the department shall provide notice of the proposed sale to prospective purchasers. The notice shall state the minimum bid that will be accepted.
Terms Used In Oregon Statutes 407.375
- Acquisition: means the purchase, improvement or refinancing of a home or farm or the payment of down payments or closing costs for such purposes. See Oregon Statutes 407.085
- Contract: A legal written agreement that becomes binding when signed.
- Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Home: includes real property connected to a residential structure, including any long-term leasehold and any outbuildings. See Oregon Statutes 407.085
- Person: includes individuals, corporations, associations, firms, partnerships, limited liability companies and joint stock companies. See Oregon Statutes 174.100
(2) Subject to subsection (3) of this section, the department shall accept the highest such bid or offer received during the 15-day period after a home or farm acquired under ORS § 407.135 or 407.145 (1) is first offered for sale unless the person making the highest bid or offer is disqualified from such purchase based on prior credit history, inadequate income or other grounds for refusal established in rules adopted by the department. Prior to such refusal, the person making the highest bid or offer shall be given the opportunity to purchase the property for cash.
(3) When the highest bid under subsection (2) of this section is made by a person who is not eligible for a loan under Article XI-A of the Oregon Constitution, the person who submits the highest bid or offer received from those persons eligible for a loan under Article XI-A of the Oregon Constitution shall be given the opportunity to purchase the property for the amount bid by the highest bidder. The property must be purchased by matching the highest bid within a period of time and at a place specified by rule of the department.
(4) When the department sells a home or farm obtained under ORS § 407.135 or 407.145 (1) to a person, the department may accept improvement of the property by such purchaser in lieu of other means of satisfying the requirements of ORS § 407.205 (3)(b) or (c). For the purpose of this section, all purchasers are subject to the provisions of ORS § 407.205 (3)(b) or (c). The department shall require the purchaser to provide an improvement plan containing a description of the proposed improvements to be made and the cost of the necessary work and materials. An appraiser employed by the department must certify that the ratio of the purchase price and the net appraised value of the home and farm after the proposed improvement is completed will satisfy the requirements of ORS § 407.205 (3)(b) or (c). The department may then approve the sale subject to the condition that the improvement of the home or farm be completed within 180 days after purchase. Failure by the applicant to complete the improvement within the time allowed shall be considered a breach of the purchase agreement and grounds for foreclosure by the department. Upon timely application and a showing that the improvement cannot be completed within the time allowed because of circumstances beyond the applicant’s control, the department may grant the applicant an additional period not to exceed 180 days in which to complete the improvement.
(5) The rate of interest for a contract made for the acquisition of a home or farm obtained by the department under ORS § 407.135 or 407.145 (1) shall be the rate per annum prescribed by the department.
(6) Notwithstanding subsection (5) of this section, if the provisions of subsections (1) to (3) of this section have been complied with and no satisfactory bid has been received, the department, after considering the time value of money, may sell the home or farm at a private negotiated sale at any price or at any rate of interest, either fixed or variable, that the department considers to be necessary and prudent to sell the property and that provides an economic benefit to the home and farm loan program that is equivalent to the property being marketed at the current appraised value of the property and the rate prescribed under subsection (5) of this section.
(7) Except as provided in this subsection, redemption of a home or farm obtained and sold by the department under ORS § 407.135 or 407.145 (1) shall be made as provided in ORS § 18.960 to 18.985. When the department accepts improvement of property by a purchaser in lieu of purchase money or cash down payment under subsection (4) of this section, redemption shall be made by paying an amount equal to the fair market value of those improvements actually made to the property under the improvement plan described in subsection (4) of this section, with interest thereon at the rate of nine percent per annum from the date of sale. The department shall determine the fair market value of the improvements and such amount shall be paid in addition to the amount of purchase money and interest thereon required under ORS § 18.966 and 18.967. [1982 s.s.1 c.11 § 2; 1983 c.184 § 1; 1985 c.287 § 1; 1987 c.426 § 3; 1987 c.661 5,6; 2005 c.542 § 69; 2005 c.625 § 40; 2019 c.223 § 23]