Deschutes default filings dry up

Figures show shift away from nonjudicial foreclosures in county

By Tim Doran / The Bulletin / @Newsinbendor

Published Jan 4, 2013 at 04:00AM

For more than four years, Deschutes County recorded an average of 230 default notices filed every month.

But in the second half of 2012, monthly filings slowed to a trickle, according to figures from the Deschutes County Clerk's Office.

Filing of default notices, the document that initiates nonjudicial foreclosure, did not drop because the real estate crash that hit in 2008 reached its end, experts have said.

They fell when lenders — prompted by a new law and a court ruling, both of which hit in July — changed the way they handled foreclosures, shifting from a largely administrative process to one that takes place in state courts.

Senate Bill 1552, passed by the Legislature in the final hours before its March adjournment, gave homeowners facing nonjudicial foreclosure the right to request a mediation session with their lenders. It took effect in July, but few sessions have been held.

Instead, lenders have largely taken their foreclosures to court, opting for the judicial route, which does not have a mediation provision.

Separately, the Oregon Court of Appeals ruled on July 18 that nonjudicial foreclosures do not comply with the law if each change of title in a homeowner's mortgage isn't recorded with a county clerk before the process starts. The state Supreme Court is scheduled to take up the case Tuesday.

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