No deficiency after a trustee sale or residential judicial foreclosure
Or. Rev. Stat. § 86.797(2)
In plain words
In Oregon, a lender generally cannot sue for a deficiency after a trustee sale, or after a judicial foreclosure of a residential trust deed. A few exceptions apply (for example certain commercial loans).
Who is protected
Grantors and others obligated on an Oregon trust deed note.
When it applies
- Only in Oregon.
- Only after the foreclosure sale.
What you can do
Reply to any deficiency demand
Send a letter citing ORS 86.797 if a collector seeks a balance.
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Honest limits
- No redemption after a trustee sale (same section).
- This is general education, not legal advice. Laws change and details matter — check the current official text or talk to a legal aid lawyer or HUD-approved housing counselor.
The law
- State lawAnti-deficiency
Or. Rev. Stat. § 86.797(2)
Exact part: (2)
What it says: No deficiency action after a trustee sale or a judicial foreclosure of a residential trust deed, with exceptions.
Read the official texthttps://www.oregonlegislature.gov/bills_laws/ors/ors086.html
Court cases
- Homeowner lostSame topicMartins v. BAC Home Loans Servicing, L.P.
Martins v. BAC Home Loans Servicing, L.P., 722 F.3d 249 (5th Cir. 2013)
a mortgage servicer acting for a properly assigned mortgagee may foreclose in Texas without possessing the original note, and an oral promise to modify a large loan is not enforceable
- Homeowner lostSame topicMilton v. U.S. Bank National Ass'n
Milton v. U.S. Bank Nat'l Ass'n, 508 F. App'x 326 (5th Cir. 2013) (per curiam) (unpublished)
an agreement to delay a Texas foreclosure falls within the statute of frauds and must be in writing to be enforced
- Homeowner lostSame topicBFP v. Resolution Trust Corp.
BFP v. Resol. Tr. Corp., 511 U.S. 531 (1994)
the price received at a non-collusive foreclosure sale that complied with state law is reasonably equivalent value under the Bankruptcy Code
Related rights
Right to cure until five days before the sale
Or. Rev. Stat. § 86.778(1)
In an Oregon trustee foreclosure, you can cure the default any time up to five days before the last sale date set. For missed payments, you pay what would be due if there had been no default, plus allowed costs and fees, and the foreclosure is dismissed.
Read this rightThe government cannot keep your home equity beyond the tax debt
U.S. Const. amend. VTakings Clause
If your home is taken or sold to pay property taxes, the government may collect what you owe, but it may not keep the extra value. Keeping the surplus is a "taking" of your property without just compensation, which the Fifth Amendment forbids (Tyler v. Hennepin County, 2023). You may be able to claim the surplus, but you usually must follow your state's claim process and deadlines.
Read this rightAfter a discharge, creditors cannot collect the wiped-out debt from you
11 U.S.C. § 524(a)(2)
A bankruptcy discharge wipes out your personal liability for most debts in the case. After that, the law forbids creditors from suing, calling or otherwise trying to collect a discharged debt from you personally. A court can hold a creditor in contempt if there was no fair doubt that its conduct was barred.
Read this rightRenters get at least 90 days' notice after a foreclosure
12 U.S.C. § 5220 note(Pub. L. 111-22, div. A, § 702(a)–(b))
If you rent a home that goes through foreclosure, the new owner must give you a notice to move at least 90 days before you have to leave. If you have a real (bona fide) lease signed before the foreclosure notice, you can usually stay until the lease ends. The exception is when the new owner will live in the home; even then you still get the 90 days' notice.
Read this rightRight to claim surplus after the county disposes of foreclosed property
Or. Rev. Stat. § 312.540(1), (2)
Oregon’s tax-foreclosure law now has a surplus process (ORS 312.500 to 312.560), in line with Tyler v. Hennepin County. When the county sells or keeps tax-foreclosed property, a former owner (or heirs) is entitled to the surplus value, claimed through the State Treasurer.
Read this right