Oregon Foreclosure Moratorium: What Property Owners Need to Know
Chances are, if you’re a homeowner living in the Portland area, you’ve heard of the Oregon Foreclosure Moratorium. The state legislature recently approved an extension to the moratorium from June 30th, 2021 to September 30th, 2021.
But what exactly is it and what should you as a property owner know? Let’s take a closer look.
What is the Oregon Foreclosure Moratorium?
House Bill 2009, otherwise known as the Oregon Foreclosure Moratorium, provides relief for homeowners who are struggling to make their mortgage payments thanks to loss of income due to COVID-19. Cleared by the state legislature in April of this year, the moratorium allows homeowners to make an agreement with their mortgage lenders to temporarily halt or reduce mortgage payments.
The moratorium ends on September 30th, 2021.
Why is there a foreclosure moratorium in Oregon?
A survey in March showed that approximately 65,000 homeowners in Oregon were behind on their mortgage payments.
While many mortgages are federally and therefore protected under the Coronavirus Aid Relief and Economic Security (CARES) act, not all mortgages are federally backed. The Oregon Foreclosure Moratorium protects Oregon homeowners who’s mortgages aren’t federally insured — which accounts for about 30% of single family mortgages.
Other good things to know
- The Oregon Foreclosure Moratorium begins retroactively on December 31st, 2020.
- Unlike previous versions of this bill, the September 30th extension requires the homeowner to contact their lender and tell them they are unable to keep up with payments due to a COVID-19 related loss of income.
- The moratorium is limited to:
- Individual homeowners
- A business that is owned by an individual owning four or fewer residential properties.
- The moratorium does not apply to commercial properties or apartment complexes.
- Homeowners have the right to put their homes into forbearance while the moratorium is in effect.
What is forbearance?
A forbearance is an agreement made between you and your mortgage lender to delay a foreclosure. It may allow you as a homeowner to do any of the following:
- Pause your mortgage payments for a set period of time
- Reduce the mortgage payment for a set period of time
- Reduce the interest rate on your mortgage for a set period of time
Forbearance is meant to provide temporary aid to homeowners struggling to make payment — meaning any payments not made during this time period will still need to be repaid down the line. The type of forbearance approved by the lender will vary depending on each person’s individual circumstances.
What happens when you’re late on your mortgage payments?
After a homeowner becomes more than 120 days late on their mortgage payment, their lender has the ability to take possession of the home and sell it — usually to the bank — to recover as much as the money on the loan as possible. This process is called foreclosure.
- Damage your credit score. Foreclosure stays on a credit report for seven years and on average drops the credit score more than 150 points.
- Make it harder to get a mortgage in the future. A foreclosure is a major negative credit event. It will be noted by most lenders, and while it depends on the lender, some won’t consider working with someone who has foreclosure on their record.
However, you can likely still sell your home if you’re behind on your mortgage payments. If the fair market value of your home is greater than what you owe on your mortgage, you can sell your home and use the money to pay back your mortgage. If it isn’t, we recommend asking your bank about the possibility of a short sale to avoid foreclosure.
Sell your home for cash in Portland
House prices are still rising across the country and mortgage rates remain the lowest they have been in years. While this is great for people looking to buy a house or for those wanting to sell their home in a desirable neighborhood, it does prompt some challenges for homeowners with:
- Homes in less desirable locations
- Homes in need of large repairs
- Homes that are uninsurable
- Homes considered “high-risk” due to age, condition, or location
If your home falls into one of these categories and you’re growing more nervous about starting to make mortgage payments again as the moratorium deadline of September 30th approaches, there’s another option available to you besides selling your home the traditional way — selling your home for cash.
Not only do cash sales close faster, but they are also more flexible and oftentimes don’t require an inspection.
A few benefits of selling a home for cash to Columbia Redevelopment include:
- Receive a cash offer within 24 hours of us visiting your home
- The transaction can close in 2-3 days rather than weeks or even months
- We will deposit $10,000 of earnest money into your account, releasing the funds after we’ve reviewed and approved the preliminary title report
- Sell your home as-is without any inspections or any repairs needed
- No real estate fees or commission you need to pay
Contact Columbia Redevelopment Today
Whether you’re behind on your mortgage payments, your home is in foreclosure, your home needs extensive repairs, or you’re simply ready to sell it in a fast, easy, and efficient manner, Columbia Redevelopment can help.
Over the past 13 years, our team has helped hundreds of Portland-area homeowners sell their homes for cash.
Contact us today online or at (503) 406-9874 for your free, no-obligation offer.