Court-supervised foreclosures level off in May

June 18,2013

Foreclosures in Oregon’s court system leveled off in May, but legal changes will likely upset the pattern again in coming months.

Filings that indicate a lawsuit over real estate — these days, typically a foreclosure — fell about 2 percent in May in the state’s seven largest counties, according to numbers compiled by the Eugene foreclosure reseller Gorilla Capital. They peaked in March with about 1,200 filings in Multnomah, Washington, Clackamas, Lane, Marion, Jackson and Deschutes counties.

In-court, or judicial foreclosures, are lawsuits filed to collect on a delinquent mortgage. They offer homeowners some additional protections, but they’re unfamiliar to most because out of-court, or nonjudicial, foreclosures had been the standard for years.

Foreclosure-related filings overall — indicating both court-supervised and out-of-court foreclosures — have fallen by nearly 38 percent in those counties from a year ago.

Foreclosures mostly moved to the court system last July, when a appellate court ruled most lenders had been improperly foreclosing without filing complete ownership records in county records.

But the Oregon Supreme Court, while invalidating some lending industry practices, drew a narrower recording standard this month in a pair of rulings. Banks say that change will likely allow them to return to their preferred out-of-court foreclosure system.

Meanwhile, a state foreclosure mediation program that had previously applied only to out-of-court foreclosures was expanded to include those pursued in court. That program, too, had pushed banks to change their practices.

— Elliot Njus

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