Bill Text: OR HB4147 | 2012 | Regular Session | Introduced
Bill Title: Relating to documentation requirements for foreclosing residential property; declaring an emergency.
Spectrum: Partisan Bill (Democrat 5-0)
Status: (Failed) 2012-03-05 - In committee upon adjournment. [HB4147 Detail]
Download: Oregon-2012-HB4147-Introduced.html
76th OREGON LEGISLATIVE ASSEMBLY--2012 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 80
House Bill 4147
Sponsored by Representative WITT; Representatives BARNHART,
DEMBROW, HARKER, HOYLE (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 that each transfer, assignment or other conveyance of
beneficial ownership or beneficial interest in note or other
instrument that is evidence of obligation grantor owes and that
is secured by trust deed on residential property must be recorded
with county clerk within 15 calendar days in order for trustee to
foreclose trust deed by advertisement and sale. Requires person
that seeks to record transfer, assignment, conveyance or
reconveyance of trust deed to inspect and correct mortgage record
and to pay county clerk certain amount for each correction.
Requires notice of sale in trust deed foreclosure to include
documentation that establishes beneficiary or beneficiary's agent
as real party in interest with respect to loan to be foreclosed.
Requires documentation to consist of true copy of original debt
instrument and evidence of chain of title from date of original
loan to date of notice of sale.
Declares emergency, effective on passage.
A BILL FOR AN ACT
Relating to documentation requirements for foreclosing
residential property; creating new provisions; amending ORS
86.735, 86.745 and 86.750; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Section 2 of this 2012 Act is added to and made
a part of ORS 93.780 to 93.800. + }
SECTION 2. { + (1) As used in this section:
(a) 'Beneficiary' has the meaning given that term in ORS
86.705.
(b) 'Grantor' has the meaning given that term in ORS 86.705.
(c) 'Trust deed' has the meaning given that term in ORS 86.705.
(2) Each transfer, assignment or other conveyance of beneficial
ownership or a beneficial interest in a note or other instrument
that is evidence of an obligation that a grantor owes to a
beneficiary and that is secured by a trust deed on residential
property must be recorded in accordance with the provisions of
ORS 205.130 within 15 calendar days of the transfer, assignment
or other conveyance. Recording a transfer, assignment or other
conveyance under this subsection is subject to the fee provided
for recording an instrument under ORS 205.320.
(3) A person other than a grantor in a trust deed, as a
condition of recording a transfer, assignment, conveyance or
reconveyance of the estate of residential property described in a
trust deed recorded for the residential property, shall inspect
and correct any errors in or omissions of the information
required to be recorded under subsection (2) of this section in
the mortgage record that is filed with the county clerk. After
correcting any errors or omissions, the person shall record an
affidavit that states, under oath and subject to the penalty for
perjury, that the mortgage record is complete and accurate to the
best of the person's knowledge and belief.
(4) For each correction described in subsection (3) of this
section that is necessary to make the mortgage record complete
and accurate, the person other than the grantor that records the
transfer, assignment, conveyance or reconveyance of the estate
described in the trust deed shall pay to the county clerk an
amount equivalent to the recording fee that would have been due
to record a transfer, assignment or other conveyance of the
beneficial interest in the note or other instrument that is
evidence of the obligation, multiplied by the number of months
that have passed since the date on which the transfer, assignment
or other conveyance should have been recorded under subsection
(2) of this section. + }
SECTION 3. ORS 86.735 is amended to read:
86.735. { - The - } { + A + } trustee may foreclose a trust
deed by advertisement and sale in the manner provided in ORS
86.740 to 86.755 if:
(1) The trust deed, any assignments of the trust deed by the
trustee or the beneficiary and any appointment of a successor
trustee are recorded in the mortgage records in the counties in
which the property described in the deed is situated;
{ - and - }
{ + (2) Each transfer, assignment or other conveyance of
beneficial ownership or a beneficial interest in a note or other
instrument that is evidence of an obligation that the grantor
owes to the beneficiary and that is secured by the trust deed is
recorded in accordance with section 2 of this 2012 Act; + }
{ - (2) - } { + (3) + } There is a default by the grantor
or other person
{ - owing - } { + that owes + } an obligation, the
performance of which is secured by the trust deed, or by
{ - their - } { + the grantor's or other person's + }
successors in interest with respect to any provision in the deed
{ - which - } { + that + } authorizes sale in the event of
default of
{ - such - } { + the + } provision; { - and - }
{ - (3) - } { + (4) + } The trustee or beneficiary has
filed for record in the county clerk's office in each county
where the trust property, or some part of { - it - } { + the
trust property + }, is situated, a notice of default containing
the information required by ORS 86.745 and containing the
trustee's or beneficiary's election to sell the property to
satisfy the obligation; and
{ - (4) - } { + (5) + } { - No - } { + An + } action
has { + not + } been instituted to recover the debt or any part
of { - it - } { + the debt + } then remaining secured by the
trust deed, or, if { - such - } { + an + } action has been
instituted, the action has been dismissed, except that:
(a) Subject to ORS 86.010 and the procedural requirements of
ORCP 79 and 80, an action may be instituted to appoint a receiver
or to obtain a temporary restraining order during foreclosure of
a trust deed by advertisement and sale, except that a receiver
{ - shall - } { + may + } not be appointed with respect to a
single-family residence { - which is occupied as the principal
residence of - } { + that + } the grantor, the grantor's spouse
or the grantor's minor or dependent child { + occupies as a
principal residence + }.
(b) An action may be commenced for the judicial or nonjudicial
foreclosure of the same trust deed as to any other property
covered { - thereby - } { + by the trust deed + }, or any
other trust deeds, mortgages, security agreements or other
consensual or nonconsensual security interests or liens
{ - securing - } { + that secure + } repayment of the debt.
SECTION 4. ORS 86.745 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;
(b) Evidence of the chain of title, including conveyances,
endorsements and assignments of the residential trust deed, note
or security instrument from the date of the original loan on
which the beneficiary seeks to foreclose to the date of the
notice of sale;
(c) A copy of the affidavit recorded under section 2 (2) of
this 2012 Act; and
(d) A statement that advises the grantor that:
(A) Section 2 of this 2012 Act requires that any transfer,
assignment or other conveyance of beneficial ownership or a
beneficial interest in the note or other instrument that is
evidence of the grantor's obligation to the beneficiary and that
is secured by a trust deed on the residential property that is
subject to foreclosure must be properly recorded in the mortgage
records for the residential property; and
(B) The grantor may inspect the mortgage records to verify that
the required information has been properly recorded in accordance
with section 2 of this 2012 Act. + }
{ - (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 that are subject to ORS chapter 90, include a
notice addressed clearly to any individual 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 individual has
to notice under ORS 86.755 (6)(c);
(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 ________ (date). The date of
this sale may be postponed. Unless the lender that is foreclosing
on this property is paid before the sale date, the foreclosure
will go through and someone new will own this property. After the
sale, the new owner is required to provide you with contact
information and notice that the sale took place.
The following information applies to you only if you are a bona
fide tenant occupying and renting 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 bona fide residential tenant.
If the foreclosure sale goes through, the new owner will have
the right to require you to move out. Before the new owner can
require you to move, the new owner must provide you with written
notice that specifies the date by which you must move out. If you
do not leave before the move-out date, the new owner can have the
sheriff remove you from the property after a court hearing. You
will receive notice of the court hearing.
PROTECTION FROM EVICTION
IF YOU ARE A BONA FIDE TENANT OCCUPYING AND RENTING THIS
PROPERTY AS A RESIDENTIAL DWELLING, YOU HAVE THE RIGHT TO
CONTINUE LIVING IN THIS PROPERTY AFTER THE FORECLOSURE SALE FOR:
o THE REMAINDER OF YOUR FIXED TERM LEASE, IF YOU HAVE A FIXED
TERM LEASE; OR
o AT LEAST 90 DAYS FROM THE DATE YOU ARE GIVEN A WRITTEN
TERMINATION NOTICE.
If the new owner wants to move in and use this property as a
primary residence, the new owner can give you written notice and
require you to move out after 90 days, even though you have a
fixed term lease with more than 90 days left.
You must be provided with at least 90 days' written notice
after the foreclosure sale before you can be required to move.
A bona fide tenant is a residential tenant who is not the
borrower (property owner) or a child, spouse or parent of the
borrower, and whose rental agreement:
o Is the result of an arm's-length transaction;
o Requires the payment of rent that is not substantially less
than fair market rent for the property, unless the rent is
reduced or subsidized due to a federal, state or local subsidy;
and
o Was entered into prior to the date of the foreclosure sale.
ABOUT YOUR TENANCY
BETWEEN NOW AND THE
FORECLOSURE SALE: RENT
YOU SHOULD CONTINUE TO PAY RENT TO YOUR LANDLORD UNTIL THE
PROPERTY IS SOLD OR UNTIL A COURT TELLS YOU OTHERWISE. IF YOU DO
NOT PAY RENT, YOU CAN BE EVICTED. BE SURE TO KEEP PROOF OF ANY
PAYMENTS YOU MAKE.
SECURITY DEPOSIT
You may apply your security deposit and any rent you paid in
advance against the current rent you owe your landlord as
provided in ORS 90.367. 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 new owner that 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 after 90 days or at the end of your
fixed term lease. After the sale, you should receive a written
notice informing you that the sale took place and giving you the
new owner's name and contact information. You should contact the
new owner if you would like to stay. If the new owner 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 new owner
becomes your new landlord and must maintain the property.
Otherwise:
o You do not owe rent;
o The new owner is not your landlord and is not responsible for
maintaining the property on your behalf; and
o You must move out by the date the new owner specifies in a
notice to you.
The new owner may offer to pay your moving expenses and any
other costs or amounts you and the new owner agree on in exchange
for your agreement to leave the premises in less than 90 days or
before your fixed term lease expires. You should speak with a
lawyer to fully understand your rights before making any
decisions regarding your tenancy.
IT IS UNLAWFUL FOR ANY PERSON TO TRY TO FORCE YOU TO LEAVE YOUR
DWELLING UNIT WITHOUT FIRST GIVING YOU WRITTEN NOTICE AND GOING
TO COURT TO EVICT YOU. FOR MORE INFORMATION ABOUT YOUR RIGHTS,
YOU SHOULD 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 86.745, as amended by section 6, chapter 510,
Oregon Laws 2011, 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;
(b) Evidence of the chain of title, including conveyances,
endorsements and assignments of the residential trust deed, note
or security instrument from the date of the original loan on
which the beneficiary seeks to foreclose to the date of the
notice of sale;
(c) A copy of the affidavit recorded under section 2 (2) of
this 2012 Act; and
(d) A statement that advises the grantor that:
(A) Section 2 of this 2012 Act requires that any transfer,
assignment or other conveyance of beneficial ownership or a
beneficial interest in the note or other instrument that is
evidence of the grantor's obligation to the beneficiary and that
is secured by a trust deed on the residential property that is
subject to foreclosure must be properly recorded in the mortgage
records for the residential property; and
(B) The grantor may inspect the mortgage records to verify that
the required information has been properly recorded in accordance
with section 2 of this 2012 Act. + }
{ - (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 that are subject to ORS chapter 90, include a
notice addressed clearly to any individual 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 individual has
to notice under ORS 86.755 (6)(c);
(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 ________ (date). The date of
this sale may be postponed. Unless the lender that is foreclosing
on this property is paid before the sale date, the foreclosure
will go through and someone new will own this property. After the
sale, the new owner is required to provide you with contact
information and notice that the sale took place.
The following information applies to you only if you are a bona
fide tenant occupying and renting 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 bona fide residential tenant.
If the foreclosure sale goes through, the new owner will have
the right to require you to move out. Before the new owner can
require you to move, the new owner must provide you with written
notice that specifies the date by which you must move out. If you
do not leave before the move-out date, the new owner can have the
sheriff remove you from the property after a court hearing. You
will receive notice of the court hearing.
PROTECTION FROM EVICTION
IF YOU ARE A BONA FIDE TENANT OCCUPYING AND RENTING THIS
PROPERTY AS A RESIDENTIAL DWELLING, YOU HAVE THE RIGHT TO
CONTINUE LIVING IN THIS PROPERTY AFTER THE FORECLOSURE SALE FOR:
o 60 DAYS FROM THE DATE YOU ARE GIVEN A WRITTEN TERMINATION
NOTICE, IF YOU HAVE A FIXED TERM LEASE; OR
o AT LEAST 30 DAYS FROM THE DATE YOU ARE GIVEN A WRITTEN
TERMINATION NOTICE, IF YOU HAVE A MONTH-TO-MONTH OR WEEK-TO-WEEK
RENTAL AGREEMENT.
If the new owner wants to move in and use this property as a
primary residence, the new owner can give you written notice and
require you to move out after 30 days, even though you have a
fixed term lease with more than 30 days left.
You must be provided with at least 30 days' written notice
after the foreclosure sale before you can be required to move.
A bona fide tenant is a residential tenant who is not the
borrower (property owner) or a child, spouse or parent of the
borrower, and whose rental agreement:
o Is the result of an arm's-length transaction;
o Requires the payment of rent that is not substantially less
than fair market rent for the property, unless the rent is
reduced or subsidized due to a federal, state or local subsidy;
and
o Was entered into prior to the date of the foreclosure sale.
ABOUT YOUR TENANCY
BETWEEN NOW AND THE
FORECLOSURE SALE: RENT
YOU SHOULD CONTINUE TO PAY RENT TO YOUR LANDLORD UNTIL THE
PROPERTY IS SOLD OR UNTIL A COURT TELLS YOU OTHERWISE. IF YOU DO
NOT PAY RENT, YOU CAN BE EVICTED. BE SURE TO KEEP PROOF OF ANY
PAYMENTS YOU MAKE.
SECURITY DEPOSIT
You may apply your security deposit and any rent you paid in
advance against the current rent you owe your landlord as
provided in ORS 90.367. 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 new owner that 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 after 30 or 60 days. After the sale,
you should receive a written notice informing you that the sale
took place and giving you the new owner's name and contact
information. You should contact the new owner if you would like
to stay. If the new owner 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 new owner becomes your new landlord
and must maintain the property. Otherwise:
o You do not owe rent;
o The new owner is not your landlord and is not responsible for
maintaining the property on your behalf; and
o You must move out by the date the new owner specifies in a
notice to you.
The new owner may offer to pay your moving expenses and any
other costs or amounts you and the new owner agree on in exchange
for your agreement to leave the premises in less than 30 or 60
days. You should speak with a lawyer to fully understand your
rights before making any decisions regarding your tenancy.
IT IS UNLAWFUL FOR ANY PERSON TO TRY TO FORCE YOU TO LEAVE YOUR
DWELLING UNIT WITHOUT FIRST GIVING YOU WRITTEN NOTICE AND GOING
TO COURT TO EVICT YOU. FOR MORE INFORMATION ABOUT YOUR RIGHTS,
YOU SHOULD 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 6. ORS 86.750 is amended to read:
86.750. (1)(a) Except as provided in paragraph (b) of this
subsection, the notice { - prescribed in - } { + and
documentation required under + } ORS 86.745 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.
(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 of the
notice in a conspicuous place on the property on the date of the
first attempt. 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 of the
notice in a conspicuous place on the property on the date of the
second attempt. 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 of the notice,
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 served as provided in paragraph (a) of this
subsection or the first date on which notice is 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 to tenants required under ORS 86.745 { - (9) - }
{ + (10) or the documentation described in ORS 86.745 (4) + }.
(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.
SECTION 7. { + (1) Subject to the provisions of subsection (2)
of this section, section 2 of this 2012 Act and the amendments to
ORS 86.735, 86.745 and 86.750 by sections 3, 4, 5 and 6 of this
2012 Act apply to:
(a) A notice of sale sent on or after the effective date of
this 2012 Act;
(b) A foreclosure by advertisement and sale that occurs on or
after the effective date of this 2012 Act; and
(c) A recording of a transfer, assignment, conveyance or
reconveyance of the estate of residential property described in a
trust deed previously recorded for the residential property that
occurs on or after the effective date of this 2012 Act.
(2) The provisions of section 2 (3) and (4) of this 2012 Act
that require a person to inspect and correct mortgage records,
state in an affidavit that the mortgage record is accurate and
complete and pay a fee for each correction apply regardless of
whether the transfer, assignment or other conveyance described in
section 2 (2) of this 2012 Act occurred before, on or after the
effective date of this 2012 Act. + }
SECTION 8. { + This 2012 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2012 Act takes effect on its
passage. + }
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