An Oregon woman successfully fought her foreclosure eviction against Wells Fargo last week. To my knowledge she is the second Oregon borrower to do so this summer. In both cases the borrowers were allowed to stay in their homes because the evicting bank was unable to provide a clear title to the home. In order for a lender to foreclose on a borrower in Oregon all transfers of loan ownership must be recorded with the county where the house is located. In the first case this summer MERS (Mortgage Electronic Registration Systems) was the culprit but in the second case it was just a matter of poor record keeping by Wells Fargo and Option One Mortgage. It is cases like this that are giving banks pause with regards to how they proceed with foreclosures.
The big question these cases raise in my mind is what happens to the borrowers now? They are both still living in their respective homes but I have a feeling all they have done is prolong the inevitable. The fact remains that these borrowers are delinquent on their loans and their respective wins only mean that they do not have to move out not that their foreclosures have been overturned. The banks in both cases said that they are reviewing the courts’ findings and I imagine that means they are working to establish title to the homes in question. It is unclear to me what effect the already proven, unrecorded chain of loan ownership will have on the banks’ ability to gain title. Will the borrowers be able to live for years in these homes without making a payment while their cases are decided in court?
What is clear is that banks are already gearing up to take more foreclosures to court. Oregon is currently one of 24 states that do not require a foreclosure to be heard by a judge. It is cases like the ones mentioned above that are leading banks to seek foreclosure rulings in court instead of through the current non-judicial system available in Oregon. If the foreclosure process starts in court then banks are only required to provide the original note not a history of all subsequent owners of the loan. It will be interesting to see how all this shakes out. In the mean time expect foreclosures to proceed more slowly in Oregon and as long as there is a substantial number of foreclosed homes on the market they will continue to be a drag on the prices of all homes for sale.
Copyright BuyBendOregonHomes.com, all rights reserved.