Oregon Real Estate laws changed again recently, on July 19th, 2013, when Oregon Governor Kitzhaber signed a new law, HB 3389, which gives lenders more power to recover deficiency claims that they may have with their borrowers.
Is HB 3389 a good thing for Oregon homeowners and lenders or a bad thing?
Before we get started with talking about HB 3389 lets cover exactly what a deficiency means and how it affects the lender and the borrower.
A loan deficiency occurs when there is a difference in the amount that the lender is owed on the borrower’s mortgage loan and the actual amount that the lender gets when a home is sold via short sale or foreclosure.
Example: if a home sells for $150,000 and the actual amount of the loan is $200,000; there is a $50,000 deficiency and the lender has the right to seek recovery of the deficiency from the borrower by suing them over the debt that’s owed.
Understanding HB 3389
With HB 3389; what was called a residential trust deed in the past is still called a trust deed, on a property as before, especially if there are four or less residential units; especially if one of the units belongs to the “grantors” dependent, spouse or child who might be living at the residence.
Essentially HB 3389 only affects trust deeds in Oregon that don’t have any foreclosure that is judicial or non-judicial against it.
Borrowers in Oregon, who have home loans, may be shocked if they have a deficiency claim processed against them and they should consult with their Realtor or attorney to learn more about how HB 3389 affects them.
To learn more about HB 3389, or to view the latest Bend Oregon home for sale, contact me today by calling (541) 383-1426.