Tom defaulted on his trust deed loan in Ashland, Oregon. The trustee completed the non-judicial foreclosure and the property sold at the trustee's sale for $280,000. Tom's outstanding loan balance at the time of sale was $320,000, leaving a $40,000 deficiency. Under Oregon law, what is the lender's ability to pursue a deficiency judgment against Tom following a non-judicial trustee's sale?
Correct Answer
D) Oregon law prohibits deficiency judgments following a non-judicial trustee's sale.
Under Oregon law, lenders are prohibited from obtaining deficiency judgments following a non-judicial trustee's sale. This is an important anti-deficiency protection for Oregon borrowers. When a lender chooses the non-judicial foreclosure process under the Trust Deed Act, it gives up the right to pursue the borrower for any remaining loan balance after the sale. This trade-off — speed and no court involvement in exchange for no deficiency judgment — is a fundamental feature of Oregon's trust deed foreclosure system.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. It is originated and funded by private lenders and may be conforming or non-conforming.
The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
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