Oregon Statutes 86.797 – Effect of sale; actions for deficiency; restrictions
(1) If, under ORS § 86.705 to 86.815, a trustee sells property covered by a trust deed, the trustee’s sale forecloses and terminates the interest in the property that belongs to a person to which notice of the sale was given under ORS § 86.764 and 86.774 or to a person that claims an interest by, through or under the person to which notice was given. A person whose interest the trustee’s sale foreclosed and terminated may not redeem the property from the purchaser at the trustee’s sale. A failure to give notice to a person entitled to notice does not affect the validity of the sale as to persons that were notified.
Terms Used In Oregon Statutes 86.797
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Complaint: A written statement by the plaintiff stating the wrongs allegedly committed by the defendant.
- Deed: The legal instrument used to transfer title in real property from one person to another.
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- 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
- Grantor: The person who establishes a trust and places property into it.
- Guarantor: A party who agrees to be responsible for the payment of another party's debts should that party default. Source: OCC
- Lien: A claim against real or personal property in satisfaction of a debt.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Person: includes individuals, corporations, associations, firms, partnerships, limited liability companies and joint stock companies. See Oregon Statutes 174.100
- Personal property: All property that is not real property.
- Plaintiff: The person who files the complaint in a civil lawsuit.
- Trustee: A person or institution holding and administering property in trust.
(2) Except in accordance with subsection (4) of this section, an action for a deficiency may not be brought after a trustee’s sale under ORS § 86.705 to 86.815 or after a judicial foreclosure of a residential trust deed, and a judgment to foreclose a residential trust deed under ORS § 88.010 may not include a money award for the amount of the debt against the grantor, the grantor’s successor in interest or another person obligated on:
(a) The note, bond or other obligation secured by the trust deed for the property that was subject to the trustee’s sale or the judicial foreclosure; or
(b) Any other note, bond or other obligation secured by a residential trust deed for, or mortgage on, the property that was subject to the trustee’s sale or the judicial foreclosure when the debt, of which the note, bond or other obligation is evidence:
(A) Was created on the same day as, and used as part of the same purchase or repurchase transaction as, the note, bond or other obligation secured by the foreclosed residential trust deed; and
(B) Is owed to or was originated by the beneficiary or an affiliate of the beneficiary in the residential trust deed that was subject to the trustee’s sale or the foreclosure.
(3) Notwithstanding ORS § 88.103, if a judicial foreclosure of a trust deed that is not a residential trust deed results in a judgment that includes a money award, the judgment must provide that execution may issue for the amount by which the unpaid balance of the money award exceeds the net sale proceeds that are payable to the judgment creditor from the sale of the property that is subject to the foreclosure if:
(a) The net sale proceeds are insufficient to satisfy the money award; and
(b) The plaintiff requests the provision in the complaint.
(4) This section does not preclude:
(a) An action that forecloses, judicially or nonjudicially:
(A) Other property covered by the trust deed that is the subject of the foreclosure; or
(B) Another trust deed, mortgage, security agreement, consensual or nonconsensual security interest or lien that covers other real or personal property that is also used as security for the note, bond or other obligation that is secured by the trust deed for the property that was sold.
(b) An action against a guarantor for a deficiency that remains after a judicial foreclosure.
(5) A guarantor of an obligation secured by a residential trust deed may not recover a deficiency from the grantor or a successor in interest of the grantor. [Formerly 86.770; 2015 c.291 § 3]