Attorneys and pro se homeowners appearing in judicial foreclosure cases in Multnomah County should take note of the Consensus of Judges on Multnomah County Foreclosure Panel. The Consensus is a non-binding set of “rulings” of the foreclosure panel that represent the consensus view of the judges who serve on the panel. The Consensus is intended to provide guidance to parties in foreclosure cases, but judges are not bound to follow the Consensus in any particular case.
Among the hot button issues addressed in the Consensus:
Multnomah County has joined the growing statewide judicial ban on in rem foreclosures and the practice of requiring lenders to obtain personal money judgments against homeowners even if the homeowner’s personal liability for the debt was discharged in bankruptcy, even if the lender agreed not to seek judgment pursuant to a deed-in-lieu without merger, even if the parties agree otherwise, and in any case in which the anti-deficiency statute in ORS 86.770 applies. Judgments for foreclosures of purchase money mortgages and trust deeds must include a money award for total amount owing on the note–again, without any stated exception for grantors whose personal liability was discharged in bankruptcy.
The ability to collect on the judgment will expire after, and only after, the sale. [Arguably, the Consensus impliedly takes the position that the doctrine of election of remedies does not apply in judicial foreclosures. The lender will have a judgment on the note and a judgment of foreclosure and sale and may execute on either remedy unless and until the sale is complete, making it all the more inexplicable how a personal judgment could be entered against a borrower on the note when the borrower’s personal liability was extinguished in bankruptcy.]
No limited judgments are permitted against a junior lienholder because such a judgment would “not be legally coherent and can cause mischief.”
Unless the plaintiff proves that the note was accidentally lost or destroyed, the original note must be produced when entry of judgment is sought. Curiously, only some judges require production of the original note before granting a motion for summary judgment in favor of a foreclosing plaintiff.
The Consensus describes the requirements for serving and defaulting or dismissing defendants named in the complaint as “all other occupants” or similar designations.
Most judges on the panel will not abate a pending judicial foreclosure to allow the litigants to attempt to negotiate a trial period plan.
Judges are allowing as “costs” under ORCP 68 expenses related to foreclosure that are “specifically allowed” in the trust deed.
The court has denied a motion to substitute a new plaintiff where the plaintiff discovered after filing the complaint that another party held the note. The Consensus states that the proper procedure is to dismiss the case and have the proper party refile.
The full Consensus is available on the Oregon Courts website here.