Keeping
Your Home
Your rights and responsibilities to
help you avoid foreclosure
Division of Financial
Regulation
Oregon Division of Financial
Regulation
Protecting Oregonians’ access to fair products
and services through education, regulation, and
consumer assistance.
The information in this brochure is not a substitu-
tion of the laws. It is intended only for informational
purposes and does not constitute legal or professional
advice. We encourage you to seek the services of an
attorney for your particular circumstances.
This agency does not endorse or recommend
a particular counselor or mortgage company. We
recommend you contact the agencies listed in the
resource section at the end of this guide to verify
whether companies and organizations are licensed or
registered.
Terms used in this guide in bold italics are in the
Glossary on Pages 23-25.
Contents
You can prevent foreclosure.................................................................................2
Review your loan documents .............................................................................. 2
Create a budget .........................................................................................................2
Make sure to pay your property taxes .............................................................3
Avoid unnecessary liens on your house ..........................................................3
Laws to help you keep your home ...................................................................4
Overview of the servicing rules ..........................................................................4
Your billing statements ....................................................................................................4
If your loan has an adjustable interest rate ........................................................5
Crediting your loan payments and providing payoff information ....5
Your loan maybe sold or transferred ...............................................................6
Correcting errors and requesting information.............................................6
If you are late on your payments ........................................................................7
Late fees .......................................................................................................................7
Force-placed insurance .........................................................................................7
About cancellation or termination of your mortgage insurance ........8
If you are struggling to make loan payments .............................................. 9
Options your servicer may have available to help you keep
your home .................................................................................................................11
Forbearance and repayment plans ....................................................................... 11
Mortgage loan modification.......................................................................................11
Partial claim ............................................................................................................................ 12
Pre-foreclosure or short sale ...................................................................................... 12
Deed-in-lieu of foreclosure ......................................................................................... 13
Foreclosure: What and when it happens ..................................................... 13
Making Home Affordable Program ............................................................... 16
Other options .......................................................................................................... 16
Beware of foreclosure scams ............................................................................ 16
Resources .................................................................................................................. 19
Glossary ...................................................................................................................... 23
Do’s ...............................................................................................................................27
Don’ts .......................................................................................................................... 28
2
You can prevent foreclosure
Becoming a homeowner is a great accomplishment,
but keeping that homeownership is just as important.
Most people experience financial issues at some time,
but if you are not careful, those issues could lead to fore-
closure. Foreclosure is the legal means your servicer can
use to take your house if you are in default. Foreclosures
can be initiated by anyone who has a lien on your house,
including your servicer or the county where the house is
located (if you don’t pay your property taxes).
Foreclosure not only means losing your home, it can
cause damage to your credit, making it difficult to buy a
home or get other types of loans in the near future.
If you experience financial issues after you sign
your mortgage papers and move into your new
home, there are steps you can take. Here are some
suggestions:
Review your loan documents
After moving into your new house, review your loan
documents, such as the Deed of Trust and Note, so you
know how payments are credited and what your rights
or responsibilities are if you miss mortgage payments.
Page 3 of the Loan Estimate and Page 4 of the Closing
Disclosure also have information about penalties if you
send your payments beyond the grace period.
For example, the Note explains when payments are
due and where to send them. It also explains how and
when you could be charged late fees.
Create a budget
A mortgage payment can be a major monthly
expense. Carefully evaluate your financial situation and
create a budget. Find out where your money goes
and how you are spending it. Encourage the whole
family to participate as you make the necessary cuts
in your spending habits and prioritize your expenses.
As soon as you can, create an emergency fund to
cover your living expenses for a foreseeable future.
Remember, even if you have a fixed interest rate loan,
your property taxes and homeowner insurance are
likely to change every year; carefully budget for these.
Some people use their income tax returns to open an
account for emergencies. If you start losing control
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of your finances, get help from a reputable nonprofit
organization. The resources section includes a website
link with a listing of government-approved nonprofit
housing counseling organizations in Oregon.
Make sure to pay your property taxes
If you do not pay your property taxes, your house
may be subject to foreclosure.
In Oregon, property taxes are due Nov. 15 each
year, but can be paid in three installments: Nov. 15,
Feb. 15, and May 15. If you do not pay in full by May
15, your property taxes are delinquent. Your property
likely will be subject to foreclosure after three years of
unpaid property taxes. Your tax statements will notify
you when your house will be subject to foreclosure.
Find out if your mortgage payments include your
property taxes and homeowner insurance. If required,
lenders and servicers will deposit a portion of your
monthly payments into an escrow account to pay the
property taxes and homeowner insurance. If unsure,
contact the county where your house is located to
find out if you or the servicer pays the property taxes.
See the Projected Payments section on Page 1 of your
Loan Estimate or Closing Disclosure.
If you are disabled or a senior citizen, you may
qualify for a property tax deferral. Qualifications for
this program include a calculation of your annual
household income, whether you live in the property,
and the value of your home. If you qualify for this loan
and decide to use the program, the state will pay your
property taxes. It is an interest-bearing loan that does
not have to be paid back until you no longer live in the
house.
For more information, contact the Department
of Revenue or the county where your property is (see
Page 19 in the resources section).
Avoid unnecessary liens on your house
You are responsible for all liens on your house.
Voluntary and involuntary liens can be placed on your
property. An example of a voluntary lien is your mort-
gage loan or any junior liens, such as equity loans
or equity lines of credit, when you use your house as
collateral.
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An example of an involuntary lien is one placed by
the county where your house is located or the IRS if you
have unpaid taxes.
Contractors and subcontractors also can place a
lien, commonly known as a mechanic’s lien, on your
house if they have not been paid for work they did
on your property. While contractors must give you
a “Notice to Owner about Construction Liens,” try to
resolve any discrepancies with the contractor to avoid
a lien. For more information, contact the Construction
Contractors Board.
Another involuntary lien is a judgment against a
property from a lawsuit in which money is awarded to
the person who filed the lawsuit.
Laws to help you keep your home
Mortgage servicers and mortgage companies
must follow rules to help borrowers avoid foreclosure
and to avoid errors while collecting borrowers’ loan
payments. Servicers must notify borrowers in advance
if changes affect the amount of loan payments, such
as an adjustable interest rate that will change. With
few exceptions, these new rules do not apply to some
types of loans secured by a property, such as lines of
credit, reverse mortgages, construction loans, vacant
land, or large acreage properties.
The new rules provide some exemptions for
servicers classified as small servicing companies. For
information, see CFPB’s Help for Struggling Borrowers
on Page 19 in the resources section.
These new measures are meant to prevent
common problems. However, they are effective
only if you, as a homeowner, know your rights and
responsibilities.
Overview of the servicing rules
Your billing statements
Unless you have a fixed interest rate home loan
and receive a coupon book to make your payments,
the servicer must include the following in each billing
statement:
• Information about past and current payments
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• Any related fees
• How your payments were applied to the loan if,
for example, you made extra payments to the
principal
The statement should include contact information
for the servicer and information about how to contact
housing counselors. Page 1 of your Loan Estimate and
Closing Disclosure include a projected payment calcu-
lation and projected changes, if any.
If your loan has an adjustable interest rate
If you have an adjustable rate mortgage (ARM)
and your interest rate is scheduled to change, the
servicer must send you reminders, including a notice
that explains the upcoming change and how much
your new payment will be. The servicer must send the
notice at least 60 to 120 days before the rate affects the
new payment – whether higher or lower.
Crediting your loan payments and
providing payoff information
Servicers must properly and promptly credit loan
payments as of the day they received them. Your
servicer cannot reject your regular payment if it is not
enough to cover late fees or other fees, such as for
force-placed insurance coverage. If you send less than
your normal scheduled loan payment, the amount
may be placed in a special account, often called a
“suspense” account. Also, unless otherwise described
in your loan agreement, if you send lower payments,
these should be credited to your account once they
reach a complete monthly payment amount. Review
your loan agreement or your Closing Disclosure to see
if the servicer will accept partial payments and how
they are handled.
Servicers must provide consumers with an accu-
rate payoff loan amount within seven business days
after receiving a written request.
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Your loan maybe sold or transferred
You will receive a Loan Estimate within three busi-
ness days after applying for a home loan, unless it was
rejected for approval during these three days. This
document includes information about the likelihood of
selling, transferring, or assigning your loan to another
company. By signing this disclosure, you acknowledge
this possibility. The servicer must send you notice in
advance about any of these changes, including where
you must send your payments. None of the original
terms and conditions of your loan can be changed.
The company where you send your payments will
notify you in writing no later than 15 days before the
transfer of your loan. The new company should notify
you of the transfer within 15 days after the transfer was
effective. The new servicer cannot penalize you for a
late payment if you send your scheduled payments in
error to the former servicer for the 60 days following
the date of the loan transfer.
Correcting errors and requesting information
If you see an error in your statement or other incor-
rect information related to the servicing of your loan,
send a written request – preferably by certified mail
– to the address provided. The servicer must acknowl-
edge receipt of your letter within five days, not counting
legal holidays, Saturdays, or Sundays. Servicers have 30
days to resolve the issue, but may have up to 15 more
days to resolve it or send you the information about
the servicing of your loan, even if the problem was not
the servicer’s fault. You should not be charged a fee as
a condition to send your letter or to resolve the error.
However, do not stop making your regular payments.
The letter should describe specific errors or discrep-
ancies you find in the collection, incorrect application
or crediting of your loan payments, or other specific
issue concerning the servicing of your mortgage loan.
Page 20 of the resources section has links to
sample letters you could use to request information
or to request the corrections of errors related to the
servicing of your loan.
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If you are late on your payments
If you have not sent the required loan payments
when due or were late beyond the grace period,
servicers must make reasonable efforts to contact you.
The servicer will send you a follow-up written notice
45 days after the servicer did not receive your past-due
payment. The servicer may ask why you did not make
an on-time payment. Servicers must comply with
federal collection laws while contacting you. See Page
20 for the link with more information about the Fair
Debt Collection Practices.
The servicer will give you contact information of
the personnel assigned to handle your loan and, if
applicable, discuss options that may be available. If
you cannot make consecutive payments, contact the
assigned personnel.
Late fees
Under Oregon law, a servicer cannot charge a late
fee if it receives a regularly scheduled payment within
15 days after the due date. The late fee cannot exceed
5 percent of the scheduled principal and interest
payment or the agreed regular payment on the note,
whichever is less (ORS 86.160 and 86.165). See Page
3 of your Loan Estimate and Page 4 of your Closing
Disclosure.
Force-placed insurance
If the servicer believes you do not have home-
owner insurance coverage to protect the house against
hazards, the servicer or creditor can purchase a policy
on your behalf. This type of insurance is also known
as creditor- or lender-placed insurance. These policies
are usually more expensive and have limited coverage.
Servicers are not required to purchase hazard insurance
when there is no coverage to protect the house. At least
45 days before the servicer can charge you for the insur-
ance coverage purchased on your behalf, it must notify
you by mail that you need to send proof of sufficient
insurance coverage (ORS 746.201). This notice will be
followed by two reminders. The servicer can charge you
for insurance premiums paid on your behalf, from the
date your prior policy expired.
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When you show proof of a homeowner insurance
policy, the force-placed insurance should immediately
be canceled and the servicer must refund any premiums
paid for double coverage.
Many people have loan payments that include
funds for insurance coverage that are deposited into an
escrow account. If the amount in the escrow account
will not cover a renewal for coverage, the servicer first
should advance loan funds to pay for coverage.
Under Oregon law, the amount of unpaid prop-
erty taxes or insurance premiums may be added to
your loan principal and charged with the interest rate
under your loan agreement.
About cancellation or termination
of your mortgage insurance
Most loan mortgages originated since July 29, 1999,
unless you paid at least 20 percent as a down payment
based on the value of the home you are purchasing,
you will likely be required by the lender to add to your
monthly payments for Private Mortgage Insurance
coverage. This insurance covers the lender against losses
in case you do not make your monthly payments or do
not comply with other clauses in your loan agreement.
A private mortgage insurance policy is not the same as
coverage that protects the house against hazards such
as fire or flood.
The Homeowner Protection Act limits how long
homeowners must pay for mortgage insurance, except
for some home loans insured by federal agencies.
Once homeowners reach the point in which they no
longer need mortgage insurance, they can request for
it to be terminated. To do so, there are conditions you
should meet, such as having made your loan payments
as agreed. If you do not request the termination of this
insurance, the lender will automatically discontinue
collecting the payment for this insurance, once you have
paid at least 22 percent of your original loan balance. It
is also required that you are notified every year about
when your mortgage insurance will be terminated. The
termination of this insurance will translate into lower
loan payments. Page 20 has information about Private
Mortgage Insurance coverage.
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If you are struggling to make loan payments
If the loan servicer offers loss-mitigation options
and your financial situation will not likely improve, you
can submit an application for one of the options avail-
able. The servicer offering loss-mitigation options will
acknowledge receipt of your application within five days
(not counting Saturdays, Sundays, or legal holidays) after
receiving your request. The servicer will notify you when
your application is considered complete. This means no
more information is needed from you to start the appli-
cation review process. Your account does not need to
be delinquent for you to apply, but you must show you
are at risk of losing your house to foreclosure. If your
application is not complete, the servicer will notify you
what information is needed and of the deadlines. Send
your correspondence by certified mail to the address
provided. Except for the time frame allowed (account
120 days delinquent) to start a foreclosure process,
small servicers are exempted from some of these loss-
mitigation requirements.
If the servicer received your complete application at
least 37 days before a scheduled foreclosure sale date,
the servicer must evaluate all the options available to
you to avoid foreclosure. The servicer has 30 days to
complete the evaluation. Depending on the owner of
your loan (investor), these options may help you keep
your house, such as a repayment plan or a loan modifi-
cation. Another option is to surrender it through a short
sale or deed-in-lieu transaction. The following pages
explain these options.
If the servicer denies your application to avoid fore-
closure, you should receive a written notice describing
the specific reasons why you were denied. You can
appeal the denial if the house is not scheduled to be
sold in fewer than 90 days from the date your servicer
received your complete application. Servicers may start
the foreclosure process – judicial or nonjudicial – if:
• Your loan payments were not made in more than
120 consecutive days
• You did not submit a complete application at least
37 days before a scheduled foreclosure date
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• You rejected all offers available to you to avoid
foreclosure
• You do not qualify for any of the options to avoid
foreclosure and you have had the opportunity to
appeal the decision
• You do not comply with a plan, such as a
trial period
• You do not comply with a clause in your loan
agreement
The servicing rules prohibit a practice called
“dual tracking,” which happens when a mortgage
holder starts to foreclose on a home while simultane-
ously considering the homeowner’s application for a
loan modification or other option available to avoid
foreclosure.
If your loan was sold or transferred to another
servicer while your application for a loss-mitigation plan
was in process, or if you are in a trial payment plan, the
new servicer must honor the plan as it was originally
agreed with the former servicer.
A servicer will consider an application for a loss-
mitigation evaluation. Even if you were previously
approved for a plan, you may be eligible to apply for a
loss-mitigation plan if you have difficulties making your
payments. You may apply for another plan if the loan
was sold or transferred to a new servicer that offers a
loss-mitigation plan.
Protections are available for individuals or family
members who have a legal interest in the house under
certain circumstances, such as divorce or death of the
borrower. The successors must provide relevant docu-
mentation. See Page 20 for a link to recent updates on
requirements.
If you choose to be represented or get help
from an approved housing counselor or an Oregon-
licensed attorney, tell your servicer about it. Your
servicer will not negotiate with a third party without
your express consent. If you choose to be represented
by an individual other than an attorney or a housing
counselor, verify that person’s licensing with the State
of Oregon. See Page 21 to seek for licensing and regis-
tration information.
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Options your servicer may have available
to help you keep your home
If you get behind on your mortgage payments, you
may be able to keep your home and reduce the effect
on your credit rating if you confront the problem early.
The most common mistake is to ignore the problem or
delay action until it is too late.
If your goal is to save your house and your credit
rating, immediately contact your servicer and try to
negotiate a solution. Explain your willingness to commit
to a payment plan until you are in a better position to
resume your regular payments.
If you foresee temporary problems for reasons
beyond your control, such as the loss of a job, medical
emergency, or divorce, ask to speak with a staff person
about a loss-mitigation plan. Prepare a letter explaining
your situation, the reason you are facing financial prob-
lems, and why you think it could improve.
If your servicer allows it, make partial payments
during this time and maintain the records; this may help
your chances of reaching a permanent agreement with
your servicer. Most servicers have various options before
pursuing foreclosure. In most cases, these options have
been established with the investors who own your loan.
Following are examples of those options:
Forbearance and repayment plans
Ask your servicer if you can temporarily reduce or
suspend your monthly payments. This option may be
available if, for example, you are expecting funds that
will help bring your loan current or if there is a firm
possibility your income will increase and your financial
situation will improve. You will be asked to document
these possibilities.
Mortgage loan modification
With this option, you could request the servicer
change some of the original terms of the loan. This
may include the extension of the payments for a
longer period of time, or the interest rate can be
changed to a lower rate or converted into a fixed rate
to make your mortgage payments lower or more
stable. You may first be required to successfully pass
a trial period before you are permanently approved.
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If approved, carefully review the documents before
you sign them, so you understand the conditions.
Have an attorney or housing counselor review them
with you to make sure you understand what they
contain.
Find out if you qualify for a loan modification under
the “Making Home Affordable Program.” For program
information, see Page 22 in the resources section.
Partial claim
If you are paying Private Mortgage Insurance,
your loan insurer may consider helping by lending
you money to pay for the late payments and late fees.
Contact your servicer or insurer to ask if you qualify, and
how it will be repaid. FHA and VA loans have their own
guidelines for help under this option.
Pre-foreclosure or short sale
If you owe more than what your house is worth,
the servicer may allow you to sell the house and accept
a lower amount than what you owe, before the house
is foreclosed upon. Ask the servicer if there will be a
deficiency judgment – the amount uncovered after the
sale of the house – filed against you for the difference.
Ask for a written agreement clarifying the status of a
deficiency, if any.
A word of caution about companies or indi-
viduals offering short-sales services — Oregon law
requires that an individual or company offering you help
for this and other possible solutions to avoid foreclosure
must be registered as a debt management services
provider or as a licensed loan originator. While licensed
real estate brokers are exempted to help homeowners
with short sale transactions, Oregon law restricts some
fees and commissions when listing the house for sale.
Others offering to negotiate with servicers about
possible solutions are limited in how much they can
charge and other requirements they must meet. The
Division of Financial Regulation has a publication “Need
help with your debt?” with detailed information.
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Deed-in-lieu of foreclosure
If you have unsuccessfully exhausted all the above
options, you may be able to “give back” your house to
the servicer by surrendering the title of your house and
avoid foreclosure.
Also, some servicers may offer you money to move
out of the house, commonly known as “cash-for-keys.”
Usually, the servicer will expect you to leave the
house in good condition. If you choose to accept this
money, ask for a document about any present or future
conditions for accepting the money.
Important: A loan modification or any of the
other solutions above may also have a negative effect
on your credit score. If your servicer agrees to settle the
debt before foreclosure or if the house is foreclosed
upon, it is important to talk to a tax advisor.
Foreclosure: What and when it happens
There are two types of foreclosure processes in
Oregon that servicers can use when a mortgage loan
is in default — judicial and nonjudicial.
With certain exceptions, Oregon laws require finan-
cial institutions to request a face-to-face meeting with
the homeowner before starting either foreclosure
process. This meeting is also known as the resolution
conference under the Foreclosure Avoidance Program.
For information about Oregon’s Foreclosure Avoidance
Program.
In a judicial foreclosure, the servicer or a repre-
sentative acting on its behalf takes you to court to
recover the money you owe by selling the house. In a
real estate judicial foreclosure, there are some restric-
tions about the amount of money you can be sued for.
If you receive a Notice of Hearing or any notice to
appear in court regarding the sale of your property,
immediately contact an attorney. See the resources
section for contact information for the Lawyer Referral
Service. Before you receive this Notice of Hearing, your
servicer may send you a notification informing you of
its intention to start the foreclosure process.
The judicial process starts when the servicer or
its representative requests the circuit court authorize
the sheriff to conduct the sale of the house. To allow
the sale, the court must first give the homeowner
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the opportunity to be present at the hearing.
After the request to the court, the homeowner will be
served with a new notification at least 10 days before
the hearing with a “NOTICE OF HEARING ON SHERIFF’S
SALE OF YOUR PROPERTY.”
The notice, or summons, will also be sent by first-
class mail to the property address. The notice will include
the name of the servicer asking for the property’s sale,
the property address, the reason for the request, and the
time and location of the hearing. The judge will decide if
the servicer is entitled to have the house sold.
One important difference in a judicial foreclosure,
after the sale of the property, is the right of the former
homeowner to repurchase the house within 180 days,
known as the redemption period. The redemption rights
do not give the former homeowner the right to continue
living in the house, unless there is a mutual agreement
to do so. To redeem the house within this period, the
former homeowner, following a formal notification
process, must notify the new owner of that intention. The
former homeowner must pay the new owner, whether
a person or the financial institution, the amount paid at
the sheriff’s sale to purchase the house, including appli-
cable interest. The total amount to redeem the property
may also include payments made by the purchaser for
property taxes, insurance, and other expenses to main-
tain the house in good condition.
In the nonjudicial process, in which the document
securing the loan is also a Deed of Trust, with a power
of sale given to the trustee, the parties involved are
the “beneficiary,” which is the financial institution or
investor you owe the money to; the “trustee,” which is
the neutral third party to whom you conveyed or “trans-
ferred” temporarily the title of your house to be held in
trust until your loan is paid off; and you as a borrower or
“grantor.” This process applies to owner-occupied, one-
to-four unit, single-family dwellings.
A nonjudicial process of foreclosure by “advertise-
ment and sale” commonly starts if you are in default
by not making your mortgage payments as agreed
and they have been continuously late. After trying to
contact you to bring your mortgage payments current,
the financial institution collecting your payments will
give instructions to the trustee to start the foreclosure
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process or, in lending jargon, “accelerate” the loan.
After complying with the requirements before starting
the foreclosure process, the trustee will file a Notice
of Default in the county records where the house is
located. When the notice of default is recorded, the fore-
closure process becomes public information and takes
approximately 120 to 180 days until the house is sold or
transferred. Immediately after the filing of the notice of
default, the trustee will send a Notice of Trustee’s Sale
or Trustee’s Notice of Sale to you and all parties with an
interest in the property.
You have the right to reinstate your loan by bringing
your loan current, in addition to paying the late fees and
the expenses to foreclose. Do this no later than five days
before the house’s sale (auction date) if the process is
nonjudicial. If, after exhausting all your options, you were
not able to reach an agreement with the servicer to save
your house and unless the servicer decides to postpone
the sale, the trustee will conduct a trustee’s sale at the
place and time noted on the Trustee’s Notice of Sale.
Oregon law allows a postponement of the sale for up
to 180 days.
Oregon law requires trustees to provide home-
owners additional notifications. One is the “NOTICE:
YOU ARE IN DANGER OF LOSING YOUR PROPERTY IF
YOU DO NOT TAKE ACTION IMMEDIATELY.”
Trustees must provide this notification to the
homeowner at the same time or before the required
notification that the house is in pre-foreclosure.
The purpose of this notice is to promptly and clearly
notify homeowners who occupy the property as their
primary residence about the risk of losing their home
and, if possible, what they can do to try to save their
home. The notification also must include a toll-free
number homeowners can call to get information about
approved nonprofit providers of foreclosure prevention
counseling programs. The notice also includes contact
information for the Oregon State Bar’s Lawyer Referral
Service if you decide to hire a lawyer. There are programs
available for low income homeowners.
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Making Home Affordable Program
The federal Making Home Affordable Program
includes programs for homeowners who occupy their
houses and use them as their primary residence. The
Home Affordable Modification Program (HAMP), the
Home Affordable Refinance Program (HARP), the
Home Affordable Foreclosure Alternative (HAFA),
and other relief programs have other conditions
homeowners must meet to qualify.
Note: Except for the HARP option, scheduled to
expire in September, 2017, this program will be discon-
tinued at the end of 2016. Servicers will still be able to
offer other foreclosure avoidance programs, following
investors’ guidelines.
Other options
For homeowners age 62 or older, another option
may be a loan program called reverse mortgage.
The most common is the Home Equity Conversion
Mortgage (HECM), administered by the Federal
Housing Administration. This type of loan, unlike a
regular mortgage, does not have to be paid back
unless the house is no longer occupied as the primary
residence or is sold. Seek counseling from a govern-
ment-approved counselor to help you decide if this is
the right loan for you before you talk to a reverse mort-
gage lender. See the resources section about how to
find a HUD-approved nonprofit organization near you
that offers counseling on a reverse mortgage.
Beware of foreclosure scams
Scammers can cause you to lose your home and
the equity you have built and damage your credit. At
a minimum, find out if these companies or individuals
are either registered or licensed to offer their services
in Oregon if they are in-state or out-of-state compa-
nies or individuals. See the resources section to find
out about companies licensed to operate in Oregon.
Many scammers contact homeowners offering to
“save” their house. Information about your property is
public record and accessible by anyone. In addition to
the information recorded with the county when you
bought your house, notifications of default filed by the
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servicer or a lien holder, or if the house is subject to
an auction or to be foreclosed, are all public record.
Scammers can use this information to take advantage
of homeowners in distress.
Some homeowners facing foreclosure may
respond to ads offering to pay cash immediately for
houses. Although this sounds like a quick solution, it
may not be the right option if your ultimate goal is to
keep your home. Be careful; many of these offers may
also be scams.
The scams vary depending on what the scammer
is trying to obtain. For example:
• Scammers advertise their services to negotiate
with the servicer on behalf of the homeowner to
save the house. They often collect high upfront
fees, which are illegal in Oregon, and tell the
homeowner not to contact the servicer so the
negotiation process will not be “disrupted.” Most
scammers do little or nothing to help home-
owners, and they often disappear with the
money or no longer can be contacted. The most
common abuse to homeowners is when they are
seeking help to apply for loan modifications. The
scammers claim they have “secret techniques” or
“strategies” to convince the servicer to modify a
loan. The scammers may ask to be paid in cash or
other form of payment, which includes access to
your financial information, and then they disap-
pear or no longer respond to phone calls.
• In other cases, scammers convince the home-
owner to convey or give up the house’s title with
the promise to return the house after it has been
taken out of the foreclosure process. Scammers
commonly pay the homeowner an amount signif-
icantly less than the home’s real value. In some
cases, the deal includes a rental agreement in
which the homeowner pays rent that can be more
than the original mortgage payment. The home-
owner is still responsible for the payment of taxes,
insurance, and other obligations as if nothing has
changed, except for the ownership of the house.
The scammer can evict the homeowner if he or
she does not pay the rent.
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• Some scammers claim to help homeowners save
their house by refinancing the loan in default. They
ask the homeowner to sign papers that appear to
be refinancing or lease-to-buy agreements. But, in
most cases, the documents give the scammer the
title of the house.
• Other scammers ask for the mortgage payments
to be sent to them instead of the servicer. They do
not send the payments to the servicer and disap-
pear with the money collected.
Remember, if you are a victim of a scammer, you
may not be only paying them high upfront fees, but
also exposing your financial information, including
Social Security numbers, bank accounts, and other
sensitive information, which can lead to identity theft.
After verifying Oregon licensing requirements,
carefully review all documents before signing them.
Contents Resources Glossary
19
Resources*
Loan Estimate (LE) and Closing
Disclosure (CD) samples:
LE: http://les.consumernance.gov/f/201403_cfpb_
loan-estimate_xed-rate-loan-sample-H24B.pdf
CD: http://les.consumernance.gov/f/201403_
cfpb_closing-disclosure_cover-H25B.pdf
Property tax deferral programs:
Department of Revenue – 503-378-4988
http://www.oregon.gov/DOR/programs/property/
Pages/deferral.aspx
Real property foreclosure
(unpaid property taxes):
https://www.oregon.gov/DOR/forms/Forms-
Pubs/310-671.pdf
CFPB’s Help for Struggling Borrowers:
http://les.consumernance.gov/f/201312_cfpb_
mortgages_help-for-struggling-borrowers.pdf
Construction or “mechanic’s” liens:
Construction Contractors Board – 503-378-4621
https://www.oregon.gov/CCB/Documents/pdf/con-
structionlienspamplet.pdf
Federal tax liens:
IRS – 888-297-8685
www.irs.gov/businesses/small/
article/0,,id=108339,00.html#Notice
Mortgage servicing information:
For FHA loans
Department of Housing and Urban Development
(HUD) National Servicing Center – 888-297-8685
http://portal.hud.gov/hudportal/HUD?src=/pro-
gram_oces/housing/sfh/nsc
* We make every effort to ensure these external links are accurate.
Please refer to the provider entity if you find a link that is no longer active.
Contents Resources Glossary
20
Servicing Information from the Consumer Financial
Protection Bureau
http://www.consumernance.gov/askcfpb/198/
whats-the-dierence-between-a-mortgage-lender-
and-a-servicer.html
If your loan is handled by a servicer within the MERS
system
https://www.mers-servicerid.org
Fair Debt Collection Practices
https://www.consumer.ftc.gov/articles/0149-debt-
collection
CFPB servicing sample letters:
To correct errors:
http://les.consumernance.gov/f/201401_cfpb_
mortgage_request-error-resolution.pdf
To request information about the servicing of your
loan:
http://les.consumernance.gov/f/201401_cfpb_
mortgage_request-information-servicer.pdf
Private Mortgage Insurance:
http://www.consumernance.gov/askcfpb/122/
what-is-private-mortgage-insurance.html
Oregon Foreclosure Avoidance Program:
Oregon Department of Justice
www.foreclosuremediationor.org
Nonprot Foreclosure Prevention
counseling agencies:
http://www.oregon.gov/DCBS/foreclosure/Pages/
counselors.aspx
2-1-1
www.211info.org
National foreclosure hotline
888-995-HOPE, 888-995-4673
HOPE Loan Portal
http://www.hopenow.com
Contents Resources Glossary
21
Other housing services:
Oregon Housing and Community Services Agency
http://www.oregon.gov/ohcs/Pages/housing-assis-
tance-in-oregon.aspx
Lawyer Referral Services:
Oregon State Bar Association – 800-452-7636
http://www.osbar.org/public/ris/ris.html#referral
Legal Aid Services of Oregon
http://www.lawhelp.org/program/694/index.cfm
Oregon Law Center
http://www.oregonlawcenter.org
Licensing and registration:
Registered debt management service providers
Oregon Division of Financial Regulation
http://www4.cbs.state.or.us/ex/all/mylicsearch/
index.cfm?fuseaction=main.show_main&group_
id=20&profession_id=22&profession_sub_id=22003
Licensed mortgage companies and loan originators
www.NMLSconsumeraccess.org
Your rights when hiring for-prot companies
Federal Trade Commission
http://www.ftc.gov/opa/2010/11/mars.shtm
Filing complaints:
Debt management companies, Oregon-licensed
loan originators, and state-chartered nancial
institutions
Oregon Division of Financial Regulation
866-814-9710
http://www4.cbs.state.or.us/ex/dfcs/complaint/in-
dex.cfm?fuseaction=home.english
Consumer Financial Protection Bureau:
http://www.consumernance.gov/complaint
National banks:
Oce of the Comptroller of the
Currency – 800-613-6743
www.helpwithmybank.gov
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22
Federal credit unions:
National Credit Union Administration
http://www.mycreditunion.gov/consumer-assis-
tance-center/Pages/default.aspx
Federal Trade Commission:
https://www.ftccomplaintassistant.gov
Bank members of the Federal Reserve System:
Federal Reserve Board – 888-851-1920
http://www.federalreserveconsumerhelp.gov/
Federally insured state banks not members of the
Federal Reserve System – 877-275-3342
https://www2.fdic.gov/starsmail/index.asp
Assistance programs:
Making Home Aordable Program (scheduled to be
discontinued on December, 2016)
http://www.makinghomeaordable.gov
Oregon Homeownership Stabilization Program
http://www.oregonhomeownerhelp.org/
Reverse mortgages
FHA Home Equity Conversion Mortgage (HECM)
http://portal.hud.gov/hudportal/HUD?src=/pro-
gram_oces/housing/sfh/hecm/rmtopten
Oregon foreclosure laws and bills:
http://www.oregon.gov/DCBS/foreclosure/Pages/
laws.aspx?wb48617274=5DFE92FC
Judgments: ORS Chapter 18
Mortgages, trust deeds: ORS Chapter 86
Statutory liens: ORS Chapter 87
Foreclosure of mortgages and other liens:
ORS Chapter 88
Foreclosure of property tax liens:
ORS Chapter 312
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23
Glossary
Deed of trust: In Oregon, a home loan debt is often
secured by a deed of trust rather than a mortgage,
which means there is a neutral third party called a
trustee. If the borrower does not make the mortgage
payments, the servicer will instruct the trustee to sell the
property, thru a nonjudicial process, to pay off the debt.
This document is also known as the security instrument.
(ORS 86.705)
Default: In the foreclosure process, a default is a failure
to meet one or more of the contract terms from when
the mortgage loan was obtained.
Deficiency judgment or deficiency claim: If a
home is sold through foreclosure or a short-sale trans-
action for less than the amount the borrower owes,
the balance is the deficiency. In some cases, servicers
may pursue borrowers to collect the deficiency. Under
certain circumstances affecting the lien or liens, Oregon
law does not allow deficiency judgments if the house
or dwelling was intended to be occupied as a primary
residence when the lien was recorded. (ORS 86.797)
Escrow account: A type of account administered by
the lender/servicer into which the borrower’s funds
are deposited to pay for property taxes, insurance
premiums, and, in some cases, homeowners’ associa-
tion dues. Oregon law allows servicers to collect enough
funds for property tax reserves for two months more
than the actual amount needed. (ORS 86.240)
Forbearance: A forbearance is an agreement by which
the servicers will either temporarily suspend or reduce
payments. Forbearances are generally used to address
situations that are short term in nature. Servicers may be
willing to work with you on a payment plan, which can
temporarily help you until you are in a better financial
situation in the near future. This could include expected
settlements or tax returns. Your new structured payments
maybe higher enough to pay the amount in arrears.
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24
Investor: Mortgage loans are usually sold to private
investors as soon as they are funded; the lender from
whom you got your loan to buy your house no longer
owns it. The most common buyers of mortgage loans
are companies such as Fannie Mae and Freddie Mac.
Investors create conditions about how and when they
may accept loss-mitigation programs for the loans they
buy. An investor is different from a servicer.
Judicial vs. nonjudicial foreclosure: A judicial fore-
closure is the process of taking the house by going to a
judge as a lawsuit against the homeowner (ORS 88.010).
A nonjudicial foreclosure does not go to court and is
not heard by a judge. If your “deed of trust” document
has a power-of-sale clause, the trustee representing the
servicer can initiate a nonjudicial process in a foreclosure
by advertisement and sale process. (ORS 86.752)
Lien: A hold or a claim placed on a property to secure the
payment of a debt or other obligation. (ORS Chapter 87)
Loan Estimate: This required loan disclosure will be
provided to you by your lender within three days after
applying for a mortgage loan. In addition to informa-
tion about the terms of your loan, it will inform you
whether your loan will be sold or transferred to another
company. The transferring of your loan will not alter the
original loan terms.
Loss mitigation: Most lenders and servicers have a
department in charge of mitigating losses to the investor
when the borrower does not make the loan payment as
agreed or incur in other default under the note. Your loan
documents (Deed of Trust/mortgage and Note) include
information about defaulting on your loan and available
remedies.
Mechanic’s or construction lien: This type of lien can
be placed by anyone who made an improvement or
provided materials for your house if they have not been
paid for their work. Subcontractors or laborers can place
a lien on your house as well. Contact the Construction
Contractors Board to learn about your rights. oregon.
gov/CCB/homeowner/Pages/liens.aspx
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25
Note or promissory note: This document has the
details and conditions under which you borrowed
the money to buy your house. The note includes the
amount of money you borrowed, the interest rate, the
amount of your payments, when they are due, the grace
period, late fees and if the servicer would accept partial
payments, and how these would be credited against
your account.
Notice of Default: In a nonjudicial foreclosure, a noti-
fication filed by the trustee in the county or counties
where the house is located, following instructions from
the lender/servicer after unsuccessfully trying to collect
the monthly mortgage payments. (ORS 86.752)
Notice of Hearing: Oregon law requires the servicer or
its representative to notify the homeowner of a hearing
about the sale of the house to satisfy the debt. (ORS
18.908) and (ORCP 7)
Notice of Trustee Sale: Also known as Trustee’s Notice
of Sale, it is the official notification to the homeowner
that the servicer chose to start the foreclosure process.
Oregon requires more forms to be sent to warn of the
risk of losing the home. (ORS 86.771)
Private mortgage insurance: This insurance covers
the lender against loses in case you do not make your
monthly payments or do not comply with other clause
in your loan agreement.
Qualified Written Request: Section 6 of the Real
Estate Procedures Act (RESPA) gives borrowers the
right to send to the servicer a written request to ask
about the servicing of a loan or to request the correc-
tion of errors. Servicers must acknowledge receipt of
written requests within five days (not counting Satur-
days, Sundays, or legal holidays) and respond with the
investigation results within 30 to 45 days after receiving
written requests.
Redemption and redemption period: Home-
owners whose house was sold by the sheriff under the
court’s authorization have the right to repurchase within
180 days. (ORS 18.960)
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26
Servicer: A lender, mortgage company, or similar finan-
cial institution in charge of collecting and recording
mortgage payments, negotiate possible solutions to
foreclosure, or supervise a foreclosure process in case
the borrower defaults on the loan or loans secured by
the property. A small servicer is a company that services
no more than 5,000 qualified loans, which were origi-
nated by the same company or through its subsidiaries.
A housing finance agency is also considered a small
servicer and exempted from some of the servicing rules.
Suspense account: A noninterest-bearing account
established temporarily to deposit the loan payments
while these are subject to analysis because of discrepan-
cies, usually because of the amount received from the
borrower.
Trial period: If you are eligible for a foreclosure
avoidance plan, you will be put on a trial period to
demonstrate that you are able to make your monthly
payments. If you meet the conditional period, you
maybe approved for a permanent payment plan, such
as a loan modification.
Trustee’s sale: The trustee, following instructions from
the lender/servicer, conducts the auction of the prop-
erty as noted in the Trustee’s Notice of Sale. If the prop-
erty is sold to a bidder or transferred back to the bank,
the trustee delivers the title to its new owner within 10
days after the sale date. The new owner is entitled to
take possession of the property on the 10th day after
the sale date. (ORS 86.782)
Writ of execution: A court order to authorize the
sheriff to take possession of a house and sell it to recover
the money owed to the creditor. (ORS 18.860)
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27
Do’s
; Do establish an emergency fund.
; Do make sure your payments are credited/posted
properly. Review your statements when you
receive them.
; Do contact your servicer as soon as you foresee
difficulties in making your loan payments.
; Do seek the help of an approved counselor or an
attorney as soon as possible if you receive notifica-
tions your house is or will be in foreclosure.
; Do make sure any for-profit company or individual
you are seeking help from is registered or licensed
in Oregon.
; Do talk to a tax adviser if your servicer forecloses
on your house. The foreclosure may affect your tax
filings if the house sells for less than the amount
you owe on your mortgage.
; Do open your servicer’s notices immediately and,
if required, send the requested information in a
timely manner.
; Do keep your records and be sure to provide the
information to your servicer if you are responsible
for paying your taxes and insurance.
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Don’ts
; Don’t overuse your equity to consolidate other
debt.
; Don’t ignore late payment notifications from your
servicer.
; Don’t respond to offers in the mail or media
offering good deals to refinance or to modify your
loan.
; Don’t give direct access to your bank accounts or
give your personal identification number.
; Don’t sign any documents you don’t understand
and don’t pay money in advance.
; Don’t respond to offers to “save” your house.
; Don’t give away the title of your house without
first consulting with an attorney.
Contents Resources Glossary
Notes
