Foreclosure is the legal process effected through the court system in which a mortgagee (lender—often a bank) terminates a mortgagor’s (borrower’s) interest in the real property in which the mortgagor gave the mortgagee a security interest (a lien) as collateral for the loan used to purchase the property.

Foreclosure generally occurs when a homeowner defaults and fails to make mortgage payments as required by the loan agreement (promissory note).

Foreclosure allows the lender to seize the property, remove the homeowner, and sell the home—all of which are legal remedies the mortgagor and mortgagee agreed to in the mortgage contract.

In Oregon, foreclosure is a legal process that allows a lender to terminate a borrower's interest in a property due to the borrower's failure to make the required mortgage payments. Oregon law permits both judicial and non-judicial foreclosures. In a judicial foreclosure, the lender must file a lawsuit and obtain a court order to foreclose on the property. This process involves the court system and can take a significant amount of time. Non-judicial foreclosure, on the other hand, does not require court intervention if the mortgage contains a power of sale clause. This process is typically faster than judicial foreclosure. In both cases, the property can be sold at a public auction, and the proceeds are used to pay off the mortgage debt. If the sale does not cover the full amount owed, the lender may be able to seek a deficiency judgment against the borrower for the remaining balance, depending on the terms of the mortgage and state statutes. It is important for homeowners facing foreclosure to seek advice from an attorney to understand their rights and any potential defenses they may have.