Update: Oregon’s Mortgage Foreclosure “Emergency Period” is now extended until December 31, 2020. By Executive Order 20-37, Governor Kate Brown has extended the emergency period of the mortgage foreclosure moratorium enacted by HB 4204 until the end of 2020.
Governor Kate Brown has signed into law HB 4204, which imposes a foreclosure moratorium through at least September 30, for secured real estate loans. The measure applies to both commercial and residential real estate loans.
During what the bill defines as the “Emergency Period,” HB 4204 provides that a lender with a loan secured by Oregon real estate is prohibited from exercising certain rights and remedies, including foreclosing a trust deed by advertisement and sale. The Emergency Period is defined as a period that begins on March 8, and ends on September 30, except that the Governor may specify a later ending date by executive order.
During the Emergency Period, a lender may not treat as a default a borrower’s failure to make a periodic installment payment or to pay any other amount that is due to the lender if, at any time during the Emergency Period, the borrower provides notice to the lender that it cannot make the payment (the Borrower Notice). With respect to residential properties of four or fewer dwelling units, the Borrower Notice must state that the payment default is a result of a loss of income related to COVID-19. For commercial property and residential property of more than four dwelling units, the Borrower Notice must include financial statements or other evidence that demonstrates a loss of income related to COVID-19 as well as disclose any funds received under the SBA’s PPP loan program or other state or federal relief programs. A borrower is not required to give the Borrower Notice to its lender more than once.
As a result of the missed payment(s), and only if the lender and the borrower cannot agree otherwise, the lender must (i) defer from collecting such payment during the Emergency Period and (ii) permit the borrower to pay the deferred amounts at maturity of the loan.
Under HB 4204, a lender may not take the following actions with respect to a secured real estate loan:
In addition, during the Emergency Period, a lender may not:
For actions pending as of June 30, the period of time that must elapse between the time a lender initiated the foreclosure and the time at which a trustee’s sale, forfeiture remedy, or other foreclosure may occur is tolled during the Emergency Period.
HB 4204 also prohibits a court during the Emergency Period from entering a judgment of foreclosure or issuing a writ of execution on real property. A court must dismiss any suit to foreclose a lien on real property commenced during the Emergency Period without prejudice. It also prohibits (with limited exceptions) a trustee’s sale or execution sale during the Emergency Period and renders any such sale void.
HB 4204 provides borrowers a cause of action against lenders who violate the provisions of HB 4204 and allows the borrower to recover actual damages, costs, and attorneys’ fees.
Importantly, by August 29, lenders authorized to do business in Oregon must provide their borrowers written notice by mail informing such borrowers of a borrower’s rights for accommodation under HB 4204.
HB 4204 does not:
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