76th OREGON LEGISLATIVE ASSEMBLY--2011 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 2525
Senate Bill 198
Sponsored by Senator BATES (Presession filed.)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Requires mandatory mediation between trustee and grantor before
sale to foreclose residential trust deed. Requires certain
notices and procedures for conducting mediation.
Requires trustee to provide grantor with documentation as part
of notice of sale that identifies beneficial owner of loan.
Prohibits owner of foreclosed residential real property from
neglecting real property during periods of vacancy. Permits local
government to assess civil penalty for each day during which
owner fails to remedy conditions of neglect.
Declares emergency, effective on passage.
A BILL FOR AN ACT
Relating to residential property foreclosures; creating new
provisions; amending ORS 86.737, 86.740, 86.742, 86.745 and
86.750; repealing sections 9 and 10, chapter 864, Oregon Laws
2009; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 86.737, as amended by section 4, chapter 864,
Oregon Laws 2009, is amended to read:
86.737. (1) If a notice of default is recorded for property
that is subject to a residential trust deed, { - the sender
of - } { + the person that sends + } a notice of sale under ORS
86.740 shall, on { - or before - } the date the notice of sale
is served or mailed, give notice under this section to the
grantor by both first class and certified mail with return
receipt requested. Subject to any rules adopted under subsection
(2) of this section, the notice must be in substantially the
following form and printed in at least 14-point type:
_________________________________________________________________
NOTICE:
YOU ARE IN DANGER OF LOSING
YOUR PROPERTY IF YOU DO NOT
TAKE ACTION IMMEDIATELY
This notice is about your mortgage loan on your property at
______ (address).
Your lender has decided to sell this property because the money
due on your mortgage loan has not been paid on time or because
you have failed to fulfill some other obligation to your lender.
This is sometimes called 'foreclosure. '
The amount you would have had to pay as of ___ (date) to bring
your mortgage loan current was $___. The amount you must now pay
to bring your loan current may have increased since that date.
By law, your lender has to provide you with details about the
amount you owe, if you ask. You may call ______ (telephone
number) to find out the exact amount you must pay to bring your
mortgage loan current and to get other details about the amount
you owe. You may also get these details by sending a request by
certified mail to: ______.
{ + If you are unable to pay the amount you owe on your
mortgage or fulfill another obligation you have to your lender,
you and the lender must enter into mediation to try to avoid
foreclosure. A separate notice that gives you the details of this
mediation process is included with this notice. + }
THIS IS WHEN AND WHERE
YOUR PROPERTY WILL BE SOLD
IF YOU DO NOT TAKE ACTION:
Date and time: ______, 2___ at ______
Place: ______
THIS IS WHAT YOU CAN DO
TO STOP THE SALE:
1. You can pay the amount past due or correct any other default,
up to five days before the sale.
2. You can refinance or otherwise pay off the loan in full
anytime before the sale.
3. You can { - call ______ (name) at ______ (telephone number)
to find out if your lender is willing to give you more time or
change the terms of your loan. - } { + try to reach a
settlement with your lender during a mandatory mediation process
in which you may make a reasonable offer to meet the obligations
of your loan. The lender is not obligated to accept your offer
and may propose a counteroffer. + }
4. You can sell your home, provided the sale price is enough to
pay what you owe.
There are government agencies and nonprofit organizations that
can give you information about foreclosure and help you decide
what to do. For the name and telephone number of an organization
near you, please call the statewide telephone contact number at
______. You may also wish to talk to a lawyer. If you need help
finding a lawyer, you may call the Oregon State Bar's Lawyer
Referral Service at ______ or toll-free in Oregon at ______ or
you may visit
{ - its - } { + the Oregon State Bar + } website at: ______.
Legal assistance may be available if you have a low income and
meet federal poverty guidelines. For more information and a
directory of legal aid programs, go to ______.
{ + Your lender may be willing, before proceeding with
mediation or foreclosure, to modify your loan to reduce the
interest rate, reduce the monthly payments or both. You can get
information about possible loan modification programs by
contacting your lender at ______. If you can't reach your lender,
you may contact the trustee at the telephone number at the bottom
of this notice. If you have already entered into a loan
modification with your lender, you might not be able to modify
your loan again unless your circumstances have changed. Your
lender is not obligated to modify your loan. + }
{ + During mediation you may discuss options for modifying your
loan with your lender. In these discussions you may have the
assistance of a lawyer, a housing counselor or another person of
your choosing. To receive a referral to a housing counselor or
other assistance available in your community, call this toll-free
consumer mortgage foreclosure information number: ______. Many
lenders participate in new federal loan modification programs.
You can obtain more information about these programs at:
__________. + }
{ + IF YOU WANT TO APPLY TO MODIFY YOUR LOAN, YOU MUST FILL OUT
AND MAIL BACK THE ENCLOSED 'MODIFICATION REQUEST FORM.' YOUR
LENDER MUST RECEIVE THE FORM BY ______, WHICH IS 30 DAYS AFTER
THE DATE SHOWN BELOW. + }
WARNING: You may get offers from people who tell you they can
help you keep your property. You should be careful about those
offers. Make sure you understand any papers you are asked to
sign. If you have any questions, talk to a lawyer or one of the
organizations mentioned above before signing.
DATED: ___, 2___
Trustee name: ______ (print)
Trustee signature: ______
Trustee telephone number: ______
_________________________________________________________________
(2) The Department of Consumer and Business Services may adopt
rules prescribing the format, font size and other physical
characteristics of the notice form set forth in subsection (1) of
this section. The department shall adopt rules specifying the
resource telephone contact numbers and website addresses the
{ - sender is to - } { + person that sends the notice
must + } insert in { + the blanks in the notice form to + }
{ - completing - } { + complete + } the notice.
(3) { - When filling - } { + A person that fills + } blanks
in the notice form set forth in subsection (1) of this section
{ - , the sender of the notice - } shall include, stated in
plain language:
(a) The amount of payment that { - was needed to - } { +
will + } bring the mortgage loan current as of the date stated in
the notice; and
(b) One or more telephone numbers consisting of:
(A) A telephone number that { - will allow - } { +
allows + } the grantor access during regular business hours to
details regarding the grantor's loan delinquency and repayment
information; and
(B) A telephone number that { - will allow - } { +
allows + } the grantor access during regular business hours to
person-to-person consultation with an individual { - authorized
by - } the beneficiary { + has authorized + } to discuss the
grantor's payment and loan term negotiation and modification
options.
(4) Telephone numbers described in subsection (3) of this
section must be toll-free numbers unless the beneficiary:
(a) Made the loan with the beneficiary's own money;
(b) Made the loan for the beneficiary's own investment; and
(c) Is not in the business of making loans secured by an
interest in real estate.
(5) If the { - sender giving - } { + person that sends
the + } notice under subsection (1) of this section has actual
knowledge that the grantor is not the occupant of the residential
real property, the
{ - sender - } { + person + } shall also give notice to the
occupant of the property by both first class and certified mail
with return receipt requested.
{ + (6) The notice required under subsection (1) of this
section must be accompanied by a form to request a loan
modification. The form to request a loan modification must
include the address to which and state the date by which the
grantor must return the form. The date must be 30 days after the
date on which the trustee signs the notice. The form may state
that the grantor must disclose current information about the
grantor's income and expenses, the grantor's address, telephone
number and electronic mail address and other facts that may
affect the grantor's eligibility for a loan modification. + }
SECTION 2. ORS 86.740 is amended to read:
86.740. (1) { + (a) + } { + Except as provided in paragraph
(b) of this subsection, + }subsequent to recording notice of
default as provided in ORS 86.735 and at least 120 days before
the day the trustee conducts the sale, notice of the sale
{ - shall - } { + with the contents described in ORS 86.745
must + } be served pursuant to ORCP 7 D(2) and 7 D(3) or mailed
by both first class and certified mail with return receipt
requested { - , - } { + .
(b) If the sale is for the purpose of foreclosing a residential
trust deed, the notice of sale must be served or mailed in the
manner provided in paragraph (a) of this subsection at least 180
days before the date of the sale. The notice described in ORS
86.737 and a notice that prescribes mandatory mediation in
advance of the sale as described in section 7 of this 2011 Act
must accompany the notice of sale.
(2) The notice of sale described in subsection (1) of this
section and, if required, the notice described in ORS 86.737 and
the notice described in section 7 of this 2011 Act must be served
or mailed in the manner provided in subsection (1)(a) of this
section + } to the last-known address of the following persons or
{ - their - } { + the + } legal representatives { + of the
persons + }, if any:
(a) The grantor in the trust deed.
(b) { - Any - } { + A + } successor in interest to the
grantor whose interest appears of record, or of whose interest
the trustee or the beneficiary has actual notice.
(c) { - Any - } { + A + } person, including the Department
of Revenue or
{ - any other - } { + another + } state agency,
{ - having - } { + that has + } a lien or interest subsequent
to the trust deed if the lien or interest appears of record or
the beneficiary has actual notice of the lien or interest.
(d) { - Any - } { + A + } person { - requesting - } { +
that requests + } notice as provided in ORS 86.785.
{ + (e) The Department of Consumer and Business Services. + }
{ - (2) - } { + (3) + } A notice served by mail under
subsection (1) of this section is effective when the notice is
mailed.
{ - (3)(a) - } { + (4)(a) + } The disability, insanity or
death of { - any - } { + a + } person to whom { + + }notice
of sale { + or other required notices + } must be given under
this section does not delay or impair in any way the trustee's
right under a trust deed to foreclose under the deed. If the
disability, insanity or death occurs { - prior to the recording
of - } { + before the + } notice of default { + is
recorded + }, the { + required notices + }
{ - notice shall - } { + must + } be given instead to the
guardian, the conservator of the estate of the person or the
administrator or personal representative of the person, as the
case may be, in the manner and by the time set forth in this
section.
(b) If the disability, insanity or death of { - any - } { +
a + } person to whom { + a + } notice { - of sale - } { +
required under this section + } must be given
{ - under this section - } occurs on or after the
{ - recording of - } notice of default { + is recorded + },
the trustee shall, if and when the trustee has knowledge of the
disability, insanity or death, promptly give the guardian,
{ + the + } conservator of the estate or the administrator or
personal representative, as the case may be, the { - notice
provided in ORS 86.745. This notice shall be given - } { +
required notices by sending the notices + } by first class and
certified mail with return receipt requested { - , - } to the
last-known address of the guardian, conservator or administrator
or personal representative.
(c) { - In the event - } { + If + } there is no
administrator or personal representative of the estate of the
person to whom { - notice of sale - } { + the required
notices + } must be given under this section, the
{ - notice - } { + notices + } may be given instead to the
heirs at law or devisees of the deceased person in the manner and
by the time set forth in this section.
{ + (5)(a) If the trustee knows or has reason to know that
the grantor of a residential trust deed speaks or reads primarily
in a language other than the English language, the trustee shall
provide the notices described in subsection (1) of this section
in both the English language and the language the grantor
primarily speaks or reads.
(b) For purposes of this subsection, a trustee has reason to
know that a grantor speaks or reads primarily in a language other
than the English language if the trustee or an agent or affiliate
of the trustee has previously communicated with the grantor in
the other language in the course of a transaction related to the
residential trust deed or in the course of servicing a note or
loan related to the residential trust deed.
(6) The Department of Consumer and Business Services, upon
receiving a notice under subsection (2) of this section, shall
provide the name and contact information for the grantor named in
the notice to one or more housing counselors qualified as
described in section 10 of this 2011 Act. The department shall
maintain a current list of qualified housing counselors for this
purpose. + }
SECTION 3. ORS 86.742 is amended to read:
86.742. (1) If the trustee fails to give notice of the sale to
any person entitled to notice under ORS 86.740 { - (1)(c) - }
{ + (2)(c) + }, and { - such - } { + the + } person did not
have actual notice of the sale at least 25 days { - prior
to - } { + before + } the date the trustee conducted the sale,
{ - such - } { + the + } omitted person { - shall have - }
{ + has + } the same rights possessed by the holder of a junior
lien or interest who was omitted as a party defendant in a
judicial foreclosure proceeding, and the purchaser at the
trustee's sale or the purchaser's heirs, assigns or transferees,
{ - shall - } have the same rights { - possessed by - } a
purchaser at a sheriff's sale { + possesses + } following a
judicial foreclosure.
(2) The omitted person may also commence an action against the
trustee in the circuit court in the county where the real
property is located. In an action against the trustee, the
omitted person { - shall be - } { + is + } entitled to
damages upon proof that:
(a) The trustee did not give notice of the sale to the omitted
person in the manner required by ORS 86.740 { - (1)(c) - }
{ + (2)(c) + } and 86.750;
(b) A search of the record under the name of the grantor
{ - as it - } { + or the name of the grantor's successor in
interest + } { - appears - } { + as either name appears + }
on the trust deed { - , or the name of the grantor's successor
in interest, - } would have revealed the omitted person's
interest;
(c) The omitted person could and would have cured the default
under ORS 86.753; and
(d) The omitted person sustained actual damages as a result of
{ - such - } { + the omitted + } person's loss of the
opportunity to cure the default under ORS 86.753 (1).
(3) In an action against the trustee under subsection (2) of
this section, { - any - } { + a + } defendant or third party
defendant may move for dismissal on the ground that the omitted
person would not or could not have cured the default and
reinstated the trust deed if the omitted person had received the
notice required by ORS 86.740
{ - (1)(c) - } { + (2)(c) + }. The court shall hold a hearing
on { - such - } { + the + } motion { - prior to any - }
{ + before a + } hearing on { - any - } { + a + } motion
for summary judgment, and { - prior to trial of - } { +
before trying + } the action. The court shall deny the motion
only if the omitted person produces affidavits or other evidence
sufficient for a reasonable jury to find, applying a standard of
clear and convincing evidence, that the omitted person had the
financial ability to cure the default under ORS 86.753
{ - prior to - } { + before + } the date of the trustee's
sale, and that the omitted person would have done so had the
omitted person received the notice required by ORS 86.740
{ - (1)(c) - } { + (2)(c) + }. If the court grants the motion
to dismiss { - it - } { + , the court + } shall award attorney
fees pursuant to subsection (5) of this section.
(4) In { - any - } { + an + } action against the trustee or
{ - any other - } { + another + } party under this
section { + , + } the omitted person shall plead that the omitted
person did not have actual knowledge of the sale at least 25 days
{ - prior to - } { + before + } the date the trustee conducted
the sale, but thereafter the defendant { - shall have - } { +
has + } the burden of proving that the omitted person did have
{ - such - } notice.
(5) In { - all suits - } { + a suit + } brought under this
section, the applicable court may, upon entering judgment, allow
to the prevailing party as a part of the costs a reasonable
amount for attorney fees at trial and on appeal.
(6) The remedies described in subsections (1) to (5) of this
section { - shall be - } { + are + } the sole remedies
available to a person entitled to notice of foreclosure by
advertisement and sale under ORS 86.740 { - (1)(c) - } { +
(2)(c) + }, who failed to receive { - such - } notice.
{ - Such a - } { + The + } person's failure to redeem or to
commence an action against the trustee within five years of the
date of a trustee's sale under ORS 86.755 { - shall bar any - }
{ + bars an + } action under this section or { - any - }
{ + under + } other applicable law.
SECTION 4. ORS 86.745, as amended by sections 1 and 2, chapter
28, Oregon Laws 2010, is amended to read:
86.745. The notice of sale { + required under ORS 86.740 + }
shall:
(1) List the names of the grantor, trustee and beneficiary in
the trust deed, and the mailing address of the trustee.
(2) Describe the property the trust deed covers.
(3) Identify the book and page of the mortgage records that
record the trust deed.
{ + (4) Include documentation as an attachment that
establishes that the beneficiary or the beneficiary's agent is
the real party in interest with respect to the loan. The
documentation must consist of:
(a) A true copy of the original debt instrument that is the
basis for the claimed right to foreclose the residential trust
deed; and
(b) Evidence of the chain of title, including conveyances,
endorsements and assignments of the residential trust deed, note
and security instrument, from the date of the original loan on
which the beneficiary seeks to foreclose to the date of the
notice of sale. + }
{ - (4) - } { + (5) + } State the default for which the
foreclosure is made.
{ - (5) - } { + (6) + } State the sum owing on the
obligation that the trust deed secures.
{ - (6) - } { + (7) + } State that the property will be
sold to satisfy the obligation.
{ - (7) - } { + (8) + } Set forth the date, time and place
of the sale.
{ - (8) - } { + (9) + } State that the right exists under
ORS 86.753 to have the proceeding dismissed and the trust deed
reinstated by paying the entire amount then due, together with
costs, trustee's fees and attorney fees, and by curing any other
default complained of in the notice of default, at any time that
is not later than five days before the date last set for the
sale.
{ - (9) - } { + (10) + } If the property includes one or
more dwelling units, as defined in ORS 90.100, include a notice
addressed clearly to any person who occupies the property and who
is or might be a residential tenant. The notice required under
this subsection must:
(a) Include contact information for the Oregon State Bar and a
person or organization that provides legal help to individuals at
no charge to the individual;
(b) Include information concerning the right the person has to
notice under ORS 86.755 (5)(c) and state that the person may have
additional rights under federal law;
(c) Be set apart from other text in the notice of sale; and
(d) Be in substantially the following form:
_________________________________________________________________
NOTICE TO RESIDENTIAL TENANTS
The property in which you are living is in foreclosure. A
foreclosure sale is scheduled for ________. Unless the lender who
is foreclosing on this property is paid, the foreclosure will go
through and someone new will own this property.
The following information applies to you only if you occupy and
rent this property as a residential dwelling under a legitimate
rental agreement. The information does not apply to you if you
own this property or if you are not a residential tenant.
If the foreclosure goes through, the business or individual who
buys this property at the foreclosure sale has the right to
require you to move out. The buyer must first give you an
eviction notice in writing that specifies the date by which you
must move out. The buyer may not give you this notice until after
the foreclosure sale happens. If you do not leave before the
move-out date, the buyer can have the sheriff remove you from the
property after a court hearing. You will receive notice of the
court hearing.
FEDERAL LAW REQUIRES
YOU TO BE NOTIFIED
IF YOU ARE OCCUPYING AND RENTING THIS PROPERTY AS A RESIDENTIAL
DWELLING UNDER A LEGITIMATE RENTAL AGREEMENT, FEDERAL LAW
REQUIRES THE BUYER TO GIVE YOU NOTICE IN WRITING A CERTAIN NUMBER
OF DAYS BEFORE THE BUYER CAN REQUIRE YOU TO MOVE OUT. THE FEDERAL
LAW THAT REQUIRES THE BUYER TO GIVE YOU THIS NOTICE IS EFFECTIVE
UNTIL DECEMBER 31, 2012. Under federal law, the buyer must give
you at least 90 days' notice in writing before requiring you to
move out. If you are renting this property under a fixed-term
lease (for example, a six-month or one-year lease), you may stay
until the end of your lease term. If the buyer wants to move in
and use this property as the buyer's primary residence, the buyer
can give you written notice and require you to move out after 90
days, even if you have a fixed-term lease with more than 90 days
left.
STATE LAW NOTIFICATION REQUIREMENTS
IF THE FEDERAL LAW DOES NOT APPLY, STATE LAW STILL REQUIRES THE
BUYER TO GIVE YOU NOTICE IN WRITING BEFORE REQUIRING YOU TO MOVE
OUT IF YOU ARE OCCUPYING AND RENTING THE PROPERTY AS A TENANT IN
GOOD FAITH. EVEN IF THE FEDERAL LAW REQUIREMENT IS NO LONGER
EFFECTIVE AFTER DECEMBER 31, 2012, THE REQUIREMENT UNDER STATE
LAW STILL APPLIES TO YOUR SITUATION. Under state law, if you have
a fixed-term lease (for example, a six-month or one-year lease),
the buyer must give you at least 60 days' notice in writing
before requiring you to move out. If the buyer wants to move in
and use this property as the buyer's primary residence, the buyer
can give you written notice and require you to move out after 30
days, even if you have a fixed-term lease with more than 30 days
left.
If you are renting under a month-to-month or week-to-week
rental agreement, the buyer must give you at least 30 days'
notice in writing before requiring you to move out.
IMPORTANT: For the buyer to be required to give you notice
under state law, you must prove to the business or individual who
is handling the foreclosure sale that you are occupying and
renting this property as a residential dwelling under a
legitimate rental agreement. The name and address of the business
or individual who is handling the foreclosure sale is shown on
this notice under the heading 'TRUSTEE.' You must mail or deliver
your proof not later than ________ (30 days before the date first
set for the foreclosure sale). Your proof must be in writing and
should be a copy of your rental agreement or lease. If you do not
have a written rental agreement or lease, you can provide other
proof, such as receipts for rent you paid.
ABOUT YOUR SECURITY DEPOSIT
Under state law, you may apply your security deposit and any
rent you paid in advance against the current rent you owe your
landlord. To do this, you must notify your landlord in writing
that you want to subtract the amount of your security deposit or
prepaid rent from your rent payment. You may do this only for the
rent you owe your current landlord. If you do this, you must do
so before the foreclosure sale. The business or individual who
buys this property at the foreclosure sale is not responsible to
you for any deposit or prepaid rent you paid to your landlord.
ABOUT YOUR TENANCY
AFTER THE FORECLOSURE SALE
The business or individual who buys this property at the
foreclosure sale may be willing to allow you to stay as a tenant
instead of requiring you to move out. You should contact the
buyer to discuss that possibility if you would like to stay.
Under state law, if the buyer accepts rent from you, signs a new
residential rental agreement with you or does not notify you in
writing within 30 days after the date of the foreclosure sale
that you must move out, the buyer becomes your new landlord and
must maintain the property. Otherwise, the buyer is not your
landlord and is not responsible for maintaining the property on
your behalf and you must move out by the date the buyer specifies
in a notice to you.
YOU SHOULD CONTINUE TO PAY RENT TO YOUR LANDLORD UNTIL THE
PROPERTY IS SOLD TO ANOTHER BUSINESS OR INDIVIDUAL OR UNTIL A
COURT OR A LENDER TELLS YOU OTHERWISE. IF YOU DO NOT PAY RENT,
YOU CAN BE EVICTED. AS EXPLAINED ABOVE, YOU MAY BE ABLE TO APPLY
A DEPOSIT YOU MADE OR PREPAID RENT YOU PAID AGAINST YOUR CURRENT
RENT OBLIGATION. BE SURE TO KEEP PROOF OF ANY PAYMENTS YOU MAKE
AND OF ANY NOTICE YOU GIVE OR RECEIVE CONCERNING THE APPLICATION
OF YOUR DEPOSIT OR YOUR PREPAID RENT.
IT IS UNLAWFUL FOR ANY PERSON TO TRY TO FORCE YOU TO LEAVE YOUR
HOME WITHOUT FIRST GOING TO COURT TO EVICT YOU. FOR MORE
INFORMATION ABOUT YOUR RIGHTS, YOU MAY WISH TO CONSULT A LAWYER.
If you believe you need legal assistance, contact the Oregon
State Bar and ask for the lawyer referral service. Contact
information for the Oregon State Bar is included with this
notice. If you do not have enough money to pay a lawyer and are
otherwise eligible, you may be able to receive legal assistance
for free. Information about whom to contact for free legal
assistance is included with this notice.
_________________________________________________________________
SECTION 5. ORS 86.750, as amended by section 6, chapter 864,
Oregon Laws 2009, section 4, chapter 28, Oregon Laws 2010, and
section 3, chapter 40, Oregon Laws 2010, is amended to read:
86.750. (1)(a) Except as provided in paragraph (b) of this
subsection, the { - notice prescribed in ORS 86.745 - } { +
notices required under ORS 86.740 + } must be served upon an
occupant of the property described in the trust deed { - in the
manner in which a summons is served pursuant to ORCP 7 D(2) and 7
D(3) at least 120 days before the day the trustee conducts the
sale - } { + as provided in ORS 86.740 (1) + }.
(b)(A) If service cannot be effected on an occupant as provided
in paragraph (a) of this subsection on the first attempt, the
person that attempts to effect service shall post { - a
copy - } { + copies + } of the { - notice - } { + required
notices + } in a conspicuous place on the property on the date of
the first attempt { + , taking due care to protect the privacy of
the information set forth in the notices + }. The person that
attempts to effect service shall make a second attempt to effect
service on a day that is at least two days after the first
attempt.
(B) If service cannot be effected on an occupant as provided in
paragraph (a) of this subsection on the second attempt, the
person that attempts to effect service shall post { - a
copy - } { + copies + } of the { - notice - } { + required
notices + } in a conspicuous place on the property on the date of
the second attempt { + , taking due care to protect the privacy
of the information set forth in the notices + }. The person that
attempts to effect service shall make a third attempt to effect
service on a day that is at least two days after the second
attempt.
(C) If service cannot be effected on an occupant as provided in
paragraph (a) of this subsection on the third attempt, the person
that attempts to effect service shall send { - a copy - } { +
copies + } of the { - notice - } { + required notices + },
bearing the word 'occupant' as the addressee, to the property
address by first class mail with postage prepaid.
(c) Service on an occupant is effected on the earlier of the
date that { - notice is - } { + the required notices are + }
served as provided in paragraph (a) of this subsection or the
first date on which
{ - notice is - } { + the required notices are + } posted as
described in paragraph (b)(A) of this subsection.
(2)(a) Except as provided in paragraph (b) of this subsection,
a copy of the notice of sale must be published in a newspaper of
general circulation in each of the counties in which the property
is situated once a week for four successive weeks. The last
publication must be made more than 20 days prior to the date the
trustee conducts the sale.
(b) The copy of the notice of sale required to be published
under paragraph (a) of this subsection does not need to include
the { + notice described under ORS 86.737, the notice described
in section 7 of this 2011 Act, the documentation described in ORS
86.745 (4) or the + } notice to tenants required under ORS 86.745
{ - (9) - } { + (10) + }.
(3) At or before the time the trustee conducts the sale, the
trustee shall file for recording in the official record of the
county or counties in which the property described in the deed is
situated the following affidavits with respect to the notice of
sale:
(a) An affidavit of mailing, if any;
(b) An affidavit of service, if any;
(c) An affidavit of service attempts and posting, if any; and
(d) An affidavit of publication.
(4) At or before the time the trustee conducts the sale, the
trustee shall file for recording in the official record of the
county or counties in which the property described in the deed is
situated an affidavit of mailing with respect to the notice to
the grantor required under ORS 86.737.
{ + (5) Not later than five days before the date the trustee
conducts the sale, the trustee shall file for recording in the
official record of the county or counties in which the property
is located an affidavit from the beneficiary or the beneficiary's
agent that states how the beneficiary or the beneficiary's agent
has complied with the provisions of section 3 (1) and (2),
chapter 864, Oregon Laws 2009. + }
SECTION 6. { + Sections 7 to 11 of this 2011 Act are added to
and made a part of ORS 86.705 to 86.795. + }
SECTION 7. { + A notice required under ORS 86.740 (1)(b) that
prescribes mandatory mediation in advance of a trustee's sale to
foreclose a residential trust deed must:
(1) Set forth the name, address, telephone number and other
contact information for the grantor in the trust deed.
(2) Itemize the amount in default and past due on the
obligation that the residential trust deed secures, the amount
that must be paid to cure the default and associated costs and
fees.
(3) Provide the account number or other information the trustee
or beneficiary or an agent of the trustee or beneficiary uses to
identify the obligation the grantor owes to the beneficiary.
(4) Provide the address, telephone number and other contact
information for:
(a) The trustee, beneficiary and agent of the trustee or
beneficiary that is authorized to negotiate on the trustee's or
beneficiary's behalf; and
(b) The Oregon State Bar's lawyer referral service.
(5) State that the grantor and the trustee or beneficiary must
participate in a mandatory process of mediation for the purpose
of avoiding a trustee's sale.
(6) State that the grantor and the trustee will each bear half
of the cost of the mediation.
(7) List the documents and other information the grantor must
bring to the mediation.
(8) List the names of at least three persons who are qualified
under section 10 of this 2011 Act to serve as mediators and
provide for each an address, telephone number and other contact
information.
(9) State that the grantor is entitled to be represented at the
mediation by an attorney. + }
SECTION 8. { + (1)(a) Except as provided in paragraph (b) of
this subsection, within 30 days after the date on which the
trustee caused a notice that prescribes mandatory mediation to be
served or mailed as described in ORS 86.740 (1), the trustee
shall send a second notice by first-class mail to the grantor
that:
(A) Schedules a time and location for the mediation on a date
that is not later than 90 days after the date on which the notice
that prescribes mandatory mediation was served or mailed as
described in ORS 86.740 (1); and
(B) Proposes a mediator from the list in the notice of
mandatory mediation and informs the grantor that the grantor may
object in writing to the trustee's nomination and propose another
mediator from the list within 10 business days after the mailing
date for the second notice.
(b) If the grantor returns the form described in ORS 86.737 (6)
by the date specified on the form, the trustee may delay sending
the second notice described in paragraph (a) of this subsection
until after the beneficiary approves or denies the grantor's
application for a loan modification. If the beneficiary approves
the application, the trustee shall dispense with the second
notice described in paragraph (a) of this subsection and shall
proceed as if the trustee and the grantor had reached a
settlement under section 9 (3) of this 2011 Act. If the
beneficiary denies the application, the trustee, within 10 days
after the beneficiary's denial, shall send the second notice as
provided in subsection (1) of this section, except that the date
of the mediation may not be later than 120 days after the date on
which the notice that prescribes mandatory mediation was served
or mailed as described in ORS 86.740 (1).
(2) If the grantor objects to the trustee's proposed mediator,
the trustee must schedule the mediation with the mediator that
the grantor proposes unless the trustee objects. If the trustee
and the grantor each object to the other's proposed mediator, the
trustee must schedule the mediation with the remaining mediator.
(3) The trustee shall pay the initial expenses of the mediation
and is entitled to receive the grantor's portion of the expenses
of the mediation in accordance with the provisions of section 9
(5) of this 2011 Act.
(4)(a) Except as provided in paragraph (b) of this subsection,
during the period that begins on the date the notice of mandatory
mediation was served or mailed and ending on the date on which
the mediation concludes, the beneficiary and the trustee or an
agent or affiliate of the beneficiary or trustee may not add fees
or charges to the obligation the grantor owes the beneficiary.
(b) During the period described in paragraph (a) of this
subsection, the beneficiary or the trustee or an agent or
affiliate of the beneficiary or trustee may add to the grantor's
obligation the following amounts:
(A) Interest charged under the terms of the loan agreement or
other evidence of the obligation; or
(B) Service fees or charges incurred by the grantor as part of
the obligation before the date on which a notice described in ORS
86.740 (1) was served or mailed. + }
SECTION 9. { + (1) If a grantor is represented at a mediation
conducted to avoid a sale of real property described in a
residential trust deed, the mediator, the trustee or the grantor
may offer a reasonable settlement proposal to avoid the sale,
including a proposal generated by an automated loan modification
formula that the Federal Deposit Insurance Corporation develops.
With the consent of both parties, the mediator may adopt rules to
facilitate a settlement and may, with the parties' consent,
suspend or continue the mediation, provided that the mediator may
not continue the mediation later than 180 days after the date on
which the initial notice that prescribed mandatory mediation was
served.
(2) If the grantor is not represented, the mediator shall
generate a settlement proposal by using an automated loan
modification formula that the Federal Deposit Insurance
Corporation develops.
(3) If the trustee and grantor reach a settlement, the mediator
shall witness and sign a document that sets forth the terms of
the settlement. The mediator shall report to the Department of
Consumer and Business Services that the parties have reached a
settlement. The trustee, within two business days after signing a
settlement document under this subsection, shall dismiss all
proceedings under ORS 86.705 to 86.795, reinstate the residential
trust deed and continue the obligation under the terms of the
settlement document.
(4) If the parties do not reach a settlement, the mediator
shall report to the department that the parties have not reached
a settlement. Unless the trustee and the grantor agree, the
mediator may not recommend a resolution to the dispute in the
mediator's report. The trustee may proceed with the sale
scheduled according to the notice of sale required under ORS
86.740 (1) to foreclose a residential trust deed.
(5) If the trustee and grantor reach a settlement, the grantor
may elect to include the grantor's portion of the cost of the
mediation in the payment plan described in the settlement
document. If the trustee and the grantor do not reach a
settlement, the grantor shall bear the grantor's portion of the
cost of the mediation. + }
SECTION 10. { + To qualify as a mediator for the purposes of
the mediation described in section 9 of this 2011 Act, a person
must be trained in using the automated loan modification formula
that the Federal Deposit Insurance Corporation develops and be:
(1) A member of the Oregon State Bar or otherwise qualified as
a mediator as provided in rules adopted under ORS 1.002; or
(2) A housing counselor that the United States Department of
Housing and Urban Development has approved in accordance with the
department's Housing Counseling Program Handbook 7610.1. + }
SECTION 11. { + (1) A grantor that did not receive a notice
that prescribes mandatory mediation as provided under ORS 86.740
(1) 180 days before the date of a sale to foreclose a residential
trust deed may apply to the Department of Consumer and Business
Services for an order to suspend the sale. If the department
finds that a notice required under ORS 86.740 (1) was not served
or mailed to the department, the department may issue the
requested order.
(2) An order issued under subsection (1) of this section
extends the scheduled date of the sale for a period of 60 days,
pending the completion of a mediation conducted in accordance
with section 9 of this 2011 Act. The order must also notify the
trustee in accordance with ORS 183.415 that the trustee is
entitled to a hearing under ORS 183.413 to 183.470. If the
trustee by clear and convincing evidence demonstrates that the
grantor received the required notice, the department shall
rescind the order.
(3) If the mediation concludes without a settlement before the
60-day period expires, the department shall rescind the order and
allow the sale to proceed as if the department had not issued the
order. + }
SECTION 12. { + (1) As used in this section:
(a) 'Foreclosed residential real property' means residential
property, as defined in ORS 18.901, that an owner obtains as a
result of:
(A) Foreclosing a trust deed on the residential property;
(B) Receiving a judgment that forecloses a lien on the
residential property; or
(C) Purchasing the residential property at a trustee's sale or
sheriff's sale.
(b) 'Neglect' means to fail or a failure to maintain the
buildings, grounds or appurtenances or monitor the condition of
foreclosed residential real property in such a way as to allow:
(A) The condition of a dwelling unit on the foreclosed
residential real property to become unfit for habitation or to
cause or threaten to cause injury to a person's health, safety or
property should a person occupy the dwelling unit;
(B) Excessive growth of foliage or a lack of repair for a
structure on the foreclosed residential real property that
diminishes the value of adjacent property;
(C) Trespassers or squatters to remain on the foreclosed
residential real property or in a structure located on the
foreclosed residential real property;
(D) Mosquito larvae or pupae to grow in standing water on the
foreclosed residential real property; or
(E) Other conditions on the foreclosed residential real
property that cause or contribute to causing a public nuisance.
(c) 'Owner' means a person, other than a local government, that
is named in a trust deed or other instrument as the legal owner
of foreclosed residential real property.
(2) An owner may not neglect the owner's foreclosed residential
real property during any period in which the foreclosed
residential real property is vacant.
(3) Subject to subsection (4) of this section, a local
government may determine to assess a civil penalty against an
owner if the local government finds that the owner's foreclosed
residential real property is located within the local
government's jurisdiction and that the owner has violated
subsection (2) of this section.
(4) A local government may assess a civil penalty under this
section only after the local government:
(a) Notifies the owner in writing that the local government has
determined that the owner has neglected foreclosed residential
real property located within the local government's jurisdiction,
and in the notice:
(A) Describes the conditions of neglect that formed the basis
for the determination;
(B) States that the local government may assess a civil penalty
against the owner in an amount the local government specifies in
the written notice; and
(C) Specifies the date by which the owner must begin to remedy
the conditions of neglect that formed the basis for the
determination and the date by which the owner must complete the
remediation;
(b) Mails the notice to the address provided for the owner in
the trust deed or other instrument that is evidence of legal
ownership of the foreclosed residential real property or, if the
address is not current, posts the notice in a conspicuous
location on the residential real property; and
(c) Allows the owner an opportunity to remediate the conditions
of neglect that formed the basis for the determination as
provided in subsection (5) of this section.
(5)(a) Before assessing a civil penalty under this section, a
local government shall:
(A) Allow an owner not less than 30 days to remedy the
conditions of neglect that formed the basis for the local
government's determination to assess a civil penalty, unless the
local government makes a determination under paragraph (b) of
this subsection; and
(B) Provide the owner with an opportunity to contest the
assessment at a hearing. The owner must contest the assessment
within 10 days after the date on which the local government
notifies the owner of the assessment.
(b) If the local government determines that a specific
condition of the foreclosed residential real property constitutes
a threat to public health or safety, the local government may
require the owner to remedy the specific condition in less than
30 days, provided that the local government specifies in the
written notice the date by which the owner must remedy the
specific condition.
(c) Subject to the provisions of this section, a local
government may specify in the written notice different dates by
which an owner must remedy separate conditions of neglect on the
foreclosed residential real property.
(6)(a) A local government may not begin to assess a civil
penalty under this section on or before the date specified in the
written notice for the owner to complete the remediation. A civil
penalty under this section may not exceed $500 for each day
during which the conditions of neglect persist after the date set
forth for the owner to complete the remediation.
(b) In determining the amount of a civil penalty a local
government will assess under this section, the local government
shall take into account the owner's timely and good faith efforts
to remedy the conditions that formed the basis for the
determination.
(7) This section does not preempt local government ordinances
or regulations. + }
SECTION 13. { + Sections 9 and 10, chapter 864, Oregon Laws
2009, are repealed. + }
SECTION 14. { + Sections 7 to 11 and the amendments to ORS
86.737, 86.740, 86.742, 86.745 and 86.750 by sections 1 to 5 of
this 2011 Act apply to foreclosure proceedings that commence on
or after the effective date of this 2011 Act. + }
SECTION 15. { + This 2011 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2011 Act takes effect on
its passage. + }
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