A homeowner in Portland, Oregon defaults on a trust deed loan with an outstanding principal balance of $320,000. The lender initiates a non-judicial (trustee's sale) foreclosure. Under Oregon's Trust Deed Act (ORS Chapter 86), the borrower has the statutory right to reinstate the loan by paying all past-due amounts, fees, and costs. The borrower's monthly payment is $2,000, and they have missed 4 consecutive payments. The lender's attorney fees and foreclosure costs total $4,800. What is the minimum total amount the borrower must pay to reinstate the loan and stop the trustee's sale?
Correct Answer
A) $12,800
Under Oregon's Trust Deed Act (ORS Chapter 86), reinstatement requires the borrower to cure the default by paying all past-due payments plus allowable fees and costs — NOT the full loan balance. The calculation is: 4 missed payments × $2,000 = $8,000 in arrears, plus $4,800 in lender attorney fees and foreclosure costs, for a total reinstatement amount of $12,800. Oregon law grants the right to reinstate up to five days before the scheduled trustee's sale date. Reinstatement restores the loan to its original terms without requiring full payoff.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
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