Oregon Deficiency Judgments

Is oregon a deficiency judgement state?

Ally

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Hi Ally,

The most common method of foreclosure in Oregon is power of sale for deed of trust which is non-judicial with no deficiency.  Deficiency judgments are permitted with judicial foreclosure.  Oregon Section 15 ORS 88.070 for “Deficiency Judgment Upon Foreclosure of Mortgage” reads:

88.070. [When a judgment is given for the foreclosure of any mortgage given to secure payment of the balance of the purchase price of real property, the judgment shall provide for the sale of the real property covered by such mortgage for the satisfaction of the judgment given therein, but the mortgagee shall not be entitled to a deficiency judgment on account of the mortgage or note or obligation secured by the same.] When real property is sold pursuant to a judgment foreclosing a mortgage and the proceeds of the sale are not adequate to satisfy the amounts secured by the mortgage, all judgment remedies for collection of the unsatisfied amounts expire when the sale is made if:

1. The mortgage was given to a seller to secure the unpaid balance of the purchase price of real property; or
2. The mortgage was given after September 13, 1975, to a person other than a seller to secure not more than $50,000 of the unpaid balance of the purchase price of real property used by the purchaser as the primary or secondary single family residence of the purchaser.

It appears a deficiency judgment would be permitted in Oregon for a refinance and generally not on a purchase money mortgage; however, in Connelly v. Derwinski, 961 F2d 129 (1992) the Department of Veteran’s Affairs was permitted to collect on VA loan deficiencies in Oregon.  The decision reads: “Because the Oregon anti-deficiency law is identical to the California anti-deficiency law and because Rossi is not in conflict with Whitehead, Rossi is dispositive of this case.  In light of the foregoing, we affirm the district court’s summary judgment to the Secretary.”

Also, keep in mind that a junior lienholder may opt to sue on the note rather than foreclosing the mortgage and in which case they may be awarded a judgment against the consumer.

Thanks for the questions and hope this helps.

Paul

This author is not an attorney and this information should not be considered legal advice.  Please consult an attorney for legal advice.

(source=leg.state.or.us/07orlaws/sess0100.dir/0166.htm)

(source= bulk.resource.org/courts.gov/c/F2/961/961.F2d.129.89-35543.html)