Bulletin: OR2021004

Dear Associates:

The Oregon Legislative Assembly has passed House Bill 2009, and it became effective on June 1, 2021. HB 2009 imposes a moratorium on foreclosures in Oregon for loans secured by real property “upon which is situated four or fewer dwelling units, as defined in ORS 90.100, used primarily and designed solely for residential use.” The moratorium runs retroactively from December 31, 2020, to June 30, 2021, and is extendable by the Governor through December 31, 2021, the “emergency period”.

During the emergency period, a lender may not treat as a default a borrower’s failure to make a periodic installment payment or failure to pay any other amount that is due to the lender on or in connection with an obligation that is subject to a financing agreement if, during the emergency period, the borrower notifies the lender that the borrower cannot make the periodic installment payment or other payment because of a loss of income that is related to the COVID-19 pandemic. Upon notice that the failure to pay is “related to the COVID-19 pandemic”, the lender must defer collecting payments during the emergency period.

Per subsection (4) of HB 2009:

Notwithstanding ORS 18.860 to 18.993, 86.752, 88.010 and 93.905 to 93.940, and except as provided in subsection (10) of this section, with respect to subject property, a lender or trustee may not at any time during the emergency period:

(a) Foreclose a trust deed by advertisement and sale;
(b) Bring an action or suit to foreclose a mortgage or trust deed; or
(c) Enforce a forfeiture remedy.

Per subsection (7) of HB 2009:

(a) Notwithstanding ORS 86.782 and except as provided in subsection (10) of this section, a trustee’s sale of subject property may not occur during the emergency period. Any purported trustee’s sale of subject property during the emergency period is void and does not transfer or foreclose any rights to the subject property.

(b) Notwithstanding ORS 18.860 to 18.993 and except as provided in subsection (10) of this section, an execution sale of subject property that secures an obligation on which a mortgagor, grantor or purchaser in a land sale contract has defaulted may not occur during the emergency period. Any purported execution sale of subject property during the emergency period is void and does not transfer or foreclose any rights to the subject property.

Per subsection (10) of HB 2009: The foreclosure moratorium in HB 2009 does not apply to judgments of foreclosure and sale, writs of execution, notices of a trustee’s sale or forfeitures under land sale contracts:

• under which a trustee’s sale or execution sale concluded, or an affidavit of forfeiture was recorded, before June 30, 2020
• the sale occurs in connection with a tax foreclosure proceeding
• the sale disposes vacant or abandoned property
• that result from a borrower’s waste, destruction or illegal use of subject property or the borrower’s failure to prevent another person’s waste, destruction, or illegal use of the subject property

Pursuant to HB 2009, except as provided in subsection (10) above, if a lender or trustee recorded a notice of default and served a notice of sale for a foreclosure by advertisement and sale, commenced a suit under ORS 88.010 or otherwise initiated a foreclosure with respect to subject property on or after March 8, 2020, the foreclosure is stayed during the emergency period.

Pursuant to HB 2009, except as provided in subsection (10) above, during the emergency period a court may not enter a judgment of foreclosure and sale or issue a writ of execution with respect to subject property that secures an obligation on which a mortgagor, a grantor or a purchaser in a land-sale contract has failed to make a periodic installment payment or other payment. Additionally, the court shall dismiss without prejudice any action or suit commenced during the emergency period that seeks to foreclose a lien upon subject property.

Company policy: Do not insure based on foreclosures begun or completed on or after March 8, 2020, unless you secure Stewart Title Guaranty Company underwriter approval.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

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