As you may know, Oregon recently enacted legislation requiring an additional notice to be sent to borrowers facing foreclosure seeking to sell their redemptive rights that warns them of potential offers they may receive concerning the sale of their right of redemption and right to surplus proceeds. The Act modifies three provisions of the Oregon Revised Statutes, first, it revises ORS 18.924 to require that when a person purchases property during the time between the filing of a Complaint for judicial foreclosure and the expiration of the 180 day post-sale redemption period, that the purchaser must provides a notice to the seller as follows in conspicuous type 14-point or larger:
WARNING: You should be careful about this kind of transfer of property. Make sure you understand the documents that you sign. You may still own interests in this property. If you sign the deed to transfer this property, you may be giving up all of your interests in this property, such as redemption rights and rights to “surplus funds.” “Surplus funds” are any extra money if the property is sold at the sheriff’s execution sale for more than what is owed on the property. If you have questions, talk to a lawyer before signing.
This particular requirement will only likely come into play when we are seeking to truncate the borrower’s redemptive rights by purchasing them in a cash for keys situation. My recommendation would be to include this language in any Settlement or Consent to Vacate Agreement in which we purchase redemptive rights. In such scenarios, the Act also requires that the purchaser record an affidavit stating that this Notice was given. This Affidavit can be appended to the Deed transferring the property.
The Act further amends ORS 18.924 by requiring a similar notice to be included in the Sheriff’s Notice of Sale which we will accomplish through inclusion of the required language in the Sheriff’s Instructions. A copy of the modified Sheriff’s Instructions is attached to this email.
The Act also amends ORS 18.010 and requires that a Notice to Lien Debtor be sent to the debtor and attached to any Complaint for Judicial Foreclosure. The Notice to Lien Debtor largely mirrors the “Danger Notice” that is already a requirement in non-judicial foreclosure proceedings and basically advises the Lien Debtor that they should tread very carefully when dealing with 3rd parties who claim to “help you keep your property” because the sale of their redemption rights may eliminate the grantor’s right to surplus proceeds of any sale. A generic version of the proposed Notice is attached.
The effective date of this change is January 1, 2020.
Please feel free to contact our Managing Attorney for Oregon, Jeffrey Myers with any questions you have concerning this change to Oregon Law.
Jeffrey A. Myers, Oregon Managing Attorney