Oregon is one of 24 states where foreclosures are not required to be heard before a judge. According to a story in The Oregonian that could be changing. At this point there is no new law in the works to force foreclosures to be handled in the courts but there have been a number of rulings by federal judges saying that lenders in many cases must go through the courts because they did not file the mortgage’s ownership history in county records. In the first three months of this year more than 300 foreclosure notices in Deschutes County were withdrawn by lenders because of concerns about their legality. Around the state and the country this has forced banks to reconsider how they have been handling non-judicial foreclosures creating a “shadow inventory” of homes that are in foreclosure or nearing foreclosure but have not been listed for sale.
In Oregon that number is estimated to be 26,000 homes. No one knows for sure how many of those foreclosures will end up in front of a judge especially since the Oregon Supreme Court could take as long as a year to decide how to handle the situation. If it is decided that foreclosures will be required to go through the courts then it will be a bit of a good news/bad news situation. The good news for home owners is that they will be able to contest a foreclosure in front of a judge. Currently that option is not available without filing a lawsuit. Another piece of good news would be that borrowers whose homes are foreclosed will have a right of redemption. This means for six months after the home is sold in foreclosure the person who lost the home will be able to repurchase it for the same price it sold at the foreclosure sale. Few people will be able to do that but it is an interesting option. In the bad news department is the fact that in a judicial foreclosure, lenders only have to provide the original mortgage, not the complete history of ownership. A couple days ago I wrote about how a lender can come after a borrower for the amount that is short when a home is sold in a short sale. In a judicial foreclosure something similar can happen if you move out of the house before a foreclosure complaint has been filed in court. Finally, in the “wait and see” pile is that judicial foreclosure sales are required to be handled by the local sheriff’s department. They would likely be ill-equipped to handle the burden.
What is certain is that the uncertainty will slow the process of getting through the backlog of homes in foreclosure and ultimately work to keep home prices low. Good news if you are a buyer and bad news if you want to sell your home. Keep in mind, though, that not all housing markets are created equal. For example, over the last four months Bend has seen a steady rise in average price per square foot of homes sold. That rise hasn’t been dramatic ($107/sqft to $120/sqft) and I don’t know if it will continue but it does indicate that there is demand for homes in Bend. There appears to still be an especially strong demand for bank owned homes as they often have multiple offers within the first 24 hours.
If you would like to be made aware of new homes for sale, whether they are bank owned or traditional sales, we can set you up to be emailed as soon as a home that meets your criteria comes on the market. The service is free and it ensures that you don’t miss that perfect house. Call or email to let us know what kind of house you are interested in.
Copyright BuyBendOregonHomes.com, all rights reserved.