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Oregon Court Rules MERS Loans Can't Be Foreclosed Non-Judicially

Posted by 15789465 on

This recent decision out of Oregon does a terrific job of what happens "behind the curtain" on a MERS loan. Oregon is a non-judicial foreclosure state, like Alabama. Oregon uses an instrument called a Deed of Trust, while Alabama uses a Mortgage. The legal and theoretical differences between those two instruments are not relevant in the court's decision.  What WAS important was an Oregon law that said mortgage assignments must be recorded in the real estate records. The court said that when assignments are not recorded, borrowers in trouble don't know who owns their loan. They can't effectively negotiate a workout or a short sale, because they don't know the players.  Yes, we all know the servicer is the one the borrower talks to, but the servicer is rarely more than a gatekeeper—someone to prevent progress rather than assist in progress. After analyzing all the factors, and balancing the lender's need for speedy foreclosure vs. the borrower's need for knowledge of the assignment trail, the court concluded that MERS could not use non-judicial foreclosure. HERE is a link to the decision.

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  • Well, I’m going to answer my own question. I just had a reason to review some condo bylaws. Those bylaws say condo liens have to be foreclosed in the same manner as mortgage foreclosures. My advice, read the bylaws and see what they say.

    Denise L. Evans on
  • Any lawyers out there care to share with us regarding what is required to foreclose a condo assessment lien? What kind of notice has to be given, and for how long, and when can the foreclosure take place? How long is the right of redemption?

    Howard, if experience is the best teacher, then you are a walking encyclopedia on these issues. You should write a book called “In the School of Hard Knocks, I’ve Been Beaten to a Bloody Pulp.”

    Denise L. Evans on
  • i have read alabama mortgages and they appear to read like a deed of trust as opposed to a lien – and i had a situation crop up about 25 years ago inwhich a lender held up issuing to me a foreclosure deed because they belatedly discovered that an intermediate assignment wasn’t recorded. They quickly remedied the error and no one complained/discovered.

    as for non-judicial foreclosures
    i was recently involved in one case and am now stuck in another case that includes the issue of wrongful non-judicial foreclosure of a condominium asseessment lien for failure to give statutorily required notice for foreclosing by power of sale.

    would appreciate any comments that can explain/clarify this issue

    howard ross on

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