A ruling by the Oregon Supreme Court last Thursday, June 6, 2013, will likely allow mortgage lenders to resume non-judicial foreclosures, a process that slowed significantly nearly a year ago due to a lower court ruling last July. Specifically, the high court ruled that creditors using the Mortgage Electronic Registration System (MERS) do not have to publicly record the ownership history of the deed of trust in order to proceed with a non-judicial foreclosure.
In July 2012, the Oregon Court of Appeals ruled that loans managed through MERS could no longer be non-judicially foreclosed via a trustee’s sale but had to go through a judicial foreclosure process in the Oregon courts. That ruling caused Oregon foreclosure filings and sales to plummet. In May 2013, foreclosure filings and sales were down 93.8% and 96.4%, respectively from a year earlier.
This ruling means that foreclosure filings and sales are likely to increase going forward, barring some kind of action to slow foreclosure activity by the Oregon legislature. This is good news for trustee sale investors who have been shut out of the Oregon trustee sale market for the better part of a year.