Bill Text: OR HB3389 | 2013 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to foreclosures of residential trust deeds; and declaring an emergency.

Spectrum: Partisan Bill (Democrat 21-1)

Status: (Passed) 2013-07-19 - Chapter 625, (2013 Laws): Effective date July 19, 2013. [HB3389 Detail]

Download: Oregon-2013-HB3389-Amended.html

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     77th OREGON LEGISLATIVE ASSEMBLY--2013 Regular Session

HA to HB 3389

LC 2332/HB 3389-4

                       HOUSE AMENDMENTS TO
                         HOUSE BILL 3389

                      By COMMITTEE ON RULES

                             June 14

  On page 1 of the printed bill, line 2, after the second
semicolon delete the rest of the line and lines 3 and 4 and
insert ' amending ORS 86.705 and 86.735; and declaring an
emergency.'.
  Delete lines 6 through 21 and delete pages 2 through 14 and
insert:
  '  { +  SECTION 1. + }  { + Section 2 of this 2013 Act is added
to and made a part of ORS 86.705 to 86.795. + }
  '  { +  SECTION 2. + }  { + (1) As used in this section,
'nonprofit entity ' means a nonprofit corporation that is
organized in this state and that is exempt from taxation under
section 501(c)(3) of the Internal Revenue Code, or a subsidiary
or agent of the nonprofit corporation.
  ' (2) Except as provided in subsection (3) of this section, a
beneficiary may not, as a condition of offering or approving a
short sale as an alternative to foreclosing a residential trust
deed, require a nonprofit entity that purchases property that is
subject to the residential trust deed from a grantor in a short
sale, or that purchases a note from the beneficiary that secures
the grantor's obligation to the beneficiary by means of the
residential trust deed, to enter into an agreement with the
beneficiary or the grantor that limits or bars the grantor, after
the short sale or the sale of the note, from owning or occupying
the property that is subject to the residential trust deed.
  ' (3) Subsection (2) of this section does not apply if:
  ' (a) The beneficiary does not receive notice before the short
sale that the nonprofit entity or the grantor intends for the
grantor to continue after the short sale to own or occupy the
property that is the subject of the short sale;
  ' (b) The grantor does not allow the beneficiary reasonable
access to the property that is the subject of the short sale for
the purpose of inspecting or appraising the property;
  ' (c) Offering or approving the short sale would require the
beneficiary to breach a contractual obligation to another person
with respect to a residential trust deed that was recorded before
the effective date of this 2013 Act; or
  ' (d) Offering or approving the short sale would require the
beneficiary to breach a legal obligation that is not based on a
contract. + }
  '  { +  SECTION 3. + } ORS 86.705, as amended by section 5,
chapter 112, Oregon Laws 2012, is amended to read:
  ' 86.705. As used in ORS 86.705 to 86.795:
  ' (1) 'Affordable housing covenant' has the meaning given that
term in ORS 456.270.
  ' (2) 'Beneficiary' means a person named or otherwise
designated in a trust deed as the person for whose benefit a
trust deed is given, or the person's successor in interest, and
who is not the trustee unless the beneficiary is qualified to be
a trustee under ORS 86.790 (1)(d).

  ' (3) 'Eligible covenant holder' has the meaning given that
term in ORS 456.270.
  ' (4) 'Grantor' means the person that conveys an interest in
real property by a trust deed as security for the performance of
an obligation.
  ' (5) 'Residential trust deed' means a trust deed on property
upon which are situated four or fewer residential units, one of
which the grantor, the grantor's spouse or the grantor's minor or
dependent child occupies as a principal residence at the time
 { - a default that results in an action to foreclose the
obligation secured by the trust deed first occurs - }  { +  the
trust deed is recorded or, in the case of a purchase money loan,
one of which is intended to be the principal residence of the
grantor, the grantor's spouse or the grantor's minor or dependent
child after the trust deed is recorded + }.
  ' (6) 'Residential unit' means an improvement designed for
residential use.
  ' (7) 'Trust deed' means a deed executed in conformity with ORS
86.705 to 86.795 that conveys an interest in real property to a
trustee in trust to secure the performance of an obligation the
grantor or other person named in the deed owes to a beneficiary.
  ' (8) 'Trustee' means a person, other than the beneficiary, to
whom a trust deed conveys an interest in real property, or the
person's successor in interest, or an employee of the
beneficiary, if the employee is qualified to be a trustee under
ORS 86.790.
  '  { +  SECTION 4. + } ORS 86.735, as amended by section 6,
chapter 112, Oregon Laws 2012, and section 10, chapter 304,
Oregon Laws 2013 (Enrolled Senate Bill 558), is amended to read:
  ' 86.735. A trustee may not foreclose a trust deed by
advertisement and sale in the manner provided in ORS 86.740 to
86.755 unless:
  ' (1) The trust deed, any assignments of the trust deed by the
trustee or the beneficiary and any appointment of a successor
trustee are recorded in the mortgage records in the counties in
which the property described in the deed is situated;
  ' (2) There is a default by the grantor or other person that
owes an obligation, the performance of which is secured by the
trust deed, or by the grantor's or other person's successors in
interest with respect to a provision in the deed that authorizes
sale in the event of default of the provision;
  ' (3) The trustee or beneficiary has filed for record in the
county clerk's office in each county where the trust property, or
some part of the trust property, is situated, a notice of default
containing the information required by ORS 86.745 and containing
the trustee's or beneficiary's election to sell the property to
satisfy the obligation;
  ' (4) The beneficiary has filed for recording in the official
records of the county or counties in which the property that is
subject to the residential trust deed is located:
  ' (a) A   { - valid and unexpired - }  certificate of
compliance that a service provider issued to the beneficiary
under section 5   { - of this 2013 Act - }  { + , chapter 304,
Oregon Laws 2013 (Enrolled Senate Bill 558), that is valid and
unexpired at the time the notice of default is recorded + }; or
  ' (b) A copy of the affidavit with which the beneficiary
claimed, under section 2 (1)(b)   { - of this 2013 Act - }  { + ,
chapter 304, Oregon Laws 2013 (Enrolled Senate Bill 558) + }, an
exemption that has not expired;
  ' (5) The beneficiary has complied with the provisions of
section 4a, chapter 112, Oregon Laws 2012;
  ' (6) The grantor has not complied with the terms of any
foreclosure avoidance measure upon which the beneficiary and the
grantor have agreed; and
  ' (7) An action has not been commenced to recover the debt or
any part of the debt then remaining secured by the trust deed,
or, if an action has been commenced, the action has been
dismissed, except that:
  ' (a) Subject to ORS 86.010 and the procedural requirements of
ORCP 79 and 80, an action may be commenced to appoint a receiver
or to obtain a temporary restraining order during foreclosure of
a trust deed by advertisement and sale, except that a receiver
may not be appointed with respect to a single-family residence
that the grantor, the grantor's spouse or the grantor's minor or
dependent child occupies as a principal residence.
  ' (b) An action may be commenced to foreclose, judicially or
nonjudicially, the same trust deed as to any other property
covered by the trust deed, or any other trust deeds, mortgages,
security agreements or other consensual or nonconsensual security
interests or liens that secure repayment of the debt.
  '  { +  SECTION 5. + }  { +  This 2013 Act being necessary for
the immediate preservation of the public peace, health and
safety, an emergency is declared to exist, and this 2013 Act
takes effect on its passage. + } ' .
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