State Foreclosure Law Library

oregon

23 min read

Oregon — Tax & Mortgage Foreclosure

Legal information, not legal advice. Verify against the cited primary sources before acting. Last verified: 2026-06-01.

Oregon is a tax-deed-to-the-county state with no tax-lien certificates and no public investor sale at the delinquency stage. Real property becomes subject to foreclosure once three years have elapsed from the earliest delinquency (ORS 312.010). The county tax collector and district attorney bring a single in rem foreclosure proceeding against all delinquent parcels (ORS 312.050), the court enters a judgment of foreclosure (ORS 312.090), and the parcels are sold directly to the county for the taxes and interest (ORS 312.100). The former owner and other interest-holders then have a two-year redemption period running from the judgment (ORS 312.120); redemption requires the judgment amount + statutory interest (1⅓%/month under ORS 311.505(2)) + a 5% penalty + a fee. If not redeemed, the property is deeded to the county and all redemption rights terminate on execution of the deed (ORS 312.200). There is no investor; the county is the sole purchaser.

For decades Oregon let the county keep the entire property as satisfaction of a much smaller tax debt — the textbook “home-equity theft” that the U.S. Supreme Court condemned in tyler-v-hennepin-county (598 U.S. 631 (2023), decided May 25, 2023). Oregon reformed post-Tyler via HB 2089 (2025) (Enrolled HB 2089, 83rd Leg., 2025 Reg. Sess.), which added new ORS 312.500–312.560 (sections 3–6 and 8–10 of the Act, made part of ORS ch. 312 by § 12). Counties must now sell foreclosed property — primary residences listed with a real estate broker, else a public high-bid auction — and return the surplus (sale value less allowable costs) to the former owner as unclaimed property delivered to the State Treasurer. The reform is retroactive to claimants who received the one-year redemption-expiration notice (ORS 312.125) on or after May 25, 2023 (§ 13). The statute deliberately defines “claimant” to exclude creditors, other interest- holders, and assignees, and voids any assignment of a surplus claim except protective assignments (bankruptcy/POA/guardianship) — a hard bar on third-party surplus-recovery agents taking an assignment (§ 9(5)(b)).

Mortgage debt is foreclosed predominantly non-judicially by trustee’s sale under the Oregon Trust Deed Act (ORS 86.705–86.815), with a 120-day minimum notice, a reinstatement right before sale, no post-sale redemption, and no deficiency (ORS 86.797). Judicial foreclosure (ORS ch. 88) carries a 180-day post-sale redemption (ORS 88.106; ORS 18.964) but bars deficiencies on residential trust deeds (ORS 86.797(2)).

0. Identity & Classification

  • Recording unit: county (count: 36). [Source: Oregon has 36 counties — general knowledge; official count flagged in needs_verification.]
  • Tax sale type: tax deed to the county (tax_deed). No lien certificates; no investor purchase. The court orders parcels sold directly to the county (ORS 312.100); after redemption lapses the county takes a deed (ORS 312.200). [Source: oregonlegislature.gov / oregon.public.law — ORS 312.100, 312.200]
  • Tax foreclosure process: judicial in rem — a court proceeding by the tax collector and district attorney against the property itself (ORS 312.050, 312.090). [Source: oregon.public.law — ORS 312.050]
  • Mortgage foreclosure process: both — predominantly non-judicial trustee’s sale (ORS 86.705–86.815); judicial foreclosure available (ORS ch. 88).
  • Selling authority: county (the county is the foreclosure purchaser; the county tax collector runs the ORS ch. 312 process and the county disposes of property post-foreclosure under ORS 312.500–312.560); trustee (deed-of-trust sale); sheriff (judicial / execution sale).
  • Statutory home: Tax-lien foreclosure — ORS ch. 312 — https://www.oregonlegislature.gov/bills_laws/ors/ors312.html ; surplus — ORS 312.500–312.560 (HB 2089, 2025) ; property-tax collection / interest — ORS ch. 311 — https://oregon.public.law/statutes/ors_311.505 ; trust-deed foreclosure — ORS 86.705–86.815 — https://www.oregonlegislature.gov/bills_laws/ors/ors086.html ; judicial mortgage foreclosure — ORS ch. 88 — https://www.oregonlegislature.gov/bills_laws/ors/ors088.html
  • Tyler v. Hennepin compliance: reformed_post_Tyler. Pre-2025 Oregon kept the entire foreclosed property regardless of equity (home-equity theft). HB 2089 (2025) created a sale-and-surplus-return regime (ORS 312.500–312.560), returning surplus to the former owner via the State Treasurer; retroactive to one-year redemption notices on/after May 25, 2023 (the date Tyler was decided). [Source: Enrolled HB 2089 §§ 5–13; corroborated by Association of Oregon Counties and Reason.]

1. Tax Sale Mechanics

  • What is sold: a deed to the county (not a certificate, not an investor deed). The court orders the parcels “sold directly to the county” for the taxes and interest (ORS 312.100); no public investor bidding occurs at this stage. [Source: oregon.public.law — ORS 312.100]
  • Bidding method: none at foreclosure — the county is the statutory purchaser. Competitive bidding occurs only at the back-end disposition (broker listing or ORS 312.520-type public high-bid auction under HB 2089 § 6). [Source: Enrolled HB 2089 § 6]
  • Interest / penalty: delinquent property taxes accrue interest at 1⅓% per month (16% per annum) under ORS 311.505(2); this interest is carried into the foreclosure list and continues to accrue during redemption (ORS 312.110, 312.120). Redemption adds a 5% penalty on the judgment amount (ORS 312.120(2)). [Source: oregon.public.law — ORS 311.505; ORS 312.120]
  • Minimum bid composition (post-foreclosure disposition, HB 2089 § 6): at the high-bid auction, the bid must exceed the outstanding taxes and other allowable costs, with a minimum starting bid of two-thirds of fair market value (§ 6(3)(c)(C)); if that fails, a second auction may start at the outstanding taxes/costs (§ 6(4)). [Source: Enrolled HB 2089 § 6]
  • Sale frequency / typical month: annual foreclosure cycle. The foreclosure list is published and the application for judgment filed on the first publication date (counties commonly publish in mid-August); judgment ~30 days later. [Source: oregon.public.law — ORS 312.060; county procedure — Jackson County: list published Aug. 16, judgment ~30 days after]
  • Venue / platforms: county tax-collector office (foreclosure); post-foreclosure disposition via licensed real estate broker (primary residences) or public high-bid auction that “may include an online bidding process” (HB 2089 § 6(3)(e)). [Source: Enrolled HB 2089 § 6]
  • Registration & deposit: set by each county’s auction terms (no statewide lien auction). [County-level detail flagged.]
  • Subsequent taxes (“subs”): not applicable in the lien-certificate sense; the county holds the parcel through redemption, and taxes that would have been due during the redemption period are added as an allowable cost deducted before surplus (HB 2089 § 8(4)(b)). [Source: Enrolled HB 2089 § 8]

2. Right of Redemption → see right-of-redemption

  • Pre-sale right: the owner may pay the delinquent taxes at any time before judgment to avoid foreclosure; once a parcel is on the list, paying the oldest delinquent year (and prior years) halts proceedings as to that parcel. [Source: county procedure — Jackson County; ORS 312.010]
  • Post-sale period: two years from the date of the judgment of foreclosure, unless sooner redeemed (ORS 312.120(1)). Reduced to 30 days after a county waste/abandonment determination (ORS 312.122). [Source: oregon.public.law — ORS 312.120, ORS 312.122]
  • Who may redeem: “any person having an interest in the property at the date of the judgment of foreclosure, or any heir or devisee of such person, or any person holding a lien of record on the property, or any municipal corporation having a lien on the property” (ORS 312.120(2)). [Source: oregon.public.law — ORS 312.120(2)]
  • Amount formula: full judgment amount + interest as provided by law (1⅓%/month, ORS 311.505(2)) + a 5% penalty of the total judgment amount + a fee (50 or actual title-search/expense costs after notice) (ORS 312.120(2),(5)). [Source: oregon.public.law — ORS 312.120]
  • Premium to certificate holder: N/A — Oregon has no certificate holder; the 5% penalty and statutory interest run to the county.
  • Procedure: redemptioner pays the county tax collector (cash, cashier’s check, or money order; no partial payments) within the two-year window. At least one year before redemption expires, the tax collector must mail the ORS 312.125 notice (certified + first-class) to owners and lienholders of record, warning of forfeiture and of the right to claim a surplus (ORS 312.125, as amended by HB 2089 § 2). [Source: oregon.public.law — ORS 312.125; Enrolled HB 2089 § 2]
  • Extinguishment: all rights of redemption terminate on execution of the deed to the county (ORS 312.200); no confirmation of the deed is required. [Source: oregon.public.law — ORS 312.200]
  • Special tolling: persons under disability per ORS 12.160 are excepted from the conclusive-notice presumption (ORS 312.216); SCRA and bankruptcy operate as federal overlays. See bankruptcy-automatic-stay, scra-protections.

3. Surplus / Excess Proceeds → see surplus-funds, third-party-recovery-rules

  • Belongs to: the former owner (the owner of the property as of the date it was sold to the county on foreclosure), or that owner’s estate/heirs/devisees/successor (HB 2089 § 5(1) “claimant”; § 5(2) “former owner”). Creditors, other interest- holders, and assignees are expressly NOT claimants (§ 5(1)(b)). [Source: Enrolled HB 2089 § 5]
  • Claim waterfall:
    1. County deducts allowable costs (HB 2089 § 8(4)): the ORS 312.090 judgment amount + post-judgment interest; taxes/interest that would have accrued during redemption; ORS 275.275(1)(a)–(c) costs; municipal-corporation lien claims (ORS 275.130); ORS 312.990 penalties or nuisance-abatement costs; and reasonable foreclosure/disposition fees (legal, notice, staff time, court filing, appraisal, real-estate commission, auction fees) in lieu of the ORS 312.120 penalty/fee.
    2. Surplus = sale value − allowable costs (HB 2089 § 8(1)) goes to the former owner / claimant.
    3. A non-claimant (e.g., a lienholder) “may claim the surplus based upon a valid lien against the property or a debt of the claimant” (§ 9(5)(a)) — i.e., lienholders recover through the unclaimed-property process, not as the primary claimant. [Source: Enrolled HB 2089 §§ 8, 9]
  • Filing venue: a claim “must be made with the State Treasurer” in the manner of ORS 98.392 and 98.396 (Unclaimed Property / Estates Administration Program) (HB 2089 § 9(2)). The county delivers the surplus to the State Treasurer for deposit as unclaimed property (§ 10). Claims are filed at the Oregon State Treasury Unclaimed Property program (unclaimed.oregon.gov). [Source: Enrolled HB 2089 §§ 9, 10]
  • Claim deadline: the surplus is unclaimed property under ORS 98.302–98.436 (HB 2089 § 10), so it is reclaimable by the former owner indefinitely under the Uniform Unclaimed Property framework; there is no hard claim cutoff that forfeits the money to the state. The county must file the report and deliver the surplus within 30 days after the surplus is determined (§ 10(2)(b)); the surplus amount is itself determined within 60 days of depositing gross sale proceeds (§ 8(2)). Separately, the former owner may seek a writ of review of the county’s surplus determination in circuit court under ORS 34.010–34.100 (§ 3(2)(b)(D)). [Source: Enrolled HB 2089 §§ 3, 8, 10]
  • Escheat: surplus enters the Unclaimed Property and Estates Fund held by the State Treasurer (ORS 98.352, as amended by HB 2089 § 11); under Oregon’s unclaimed-property regime the owner’s claim is not time-barred, so there is no true escheat that forfeits the equity. [Source: Enrolled HB 2089 § 11]
  • Documentation required: for a deceased former owner whose estate is not probated, the claim must include the death certificate, will (if any), a statement no probate / small-estate affidavit is being filed, identity and share of each beneficiary, and signatures of all beneficiaries (HB 2089 § 9(3)(b)). An heir who occupied the property as a primary residence >1 year is presumed authorized to receive the surplus for all heirs absent objection (§ 9(3)(c)). [Source: Enrolled HB 2089 § 9]
  • Third-party recovery (governs whether a surplus-recovery agent may operate):
    • fee_cap_pct: effectively 0% for assignment-based recovery — “any purported assignment of a claim to the surplus is void” except protective assignments (bankruptcy, POA, custodianship/guardianship) (HB 2089 § 9(5)(b)). Separately, where a private party operates the disposition auction, its fee is capped at 3% of the surplus (§ 6(3)(c)(B)) — but that is a county-engaged auction operator, not a claim-recovery agent.
    • licensing_required: N/A in the recovery-agent sense — the model is foreclosed by the assignment bar and the narrow “claimant” definition rather than by licensing a finder. Claims go through the State Treasury unclaimed-property process directly.
    • assignment_of_claim_allowed: No — void by statute except protective assignments (§ 9(5)(b)).
    • cooling_off_period: N/A (no assignment-based recovery is permitted).
    • contract_disclosure_rules: N/A under ch. 312; a finder agreement assigning the claim is void regardless of disclosures.
    • prohibited_practices: taking an assignment of a surplus claim; a non-owner creditor/assignee posing as the “claimant”; collecting a contingency on the surplus via assignment. [Source: Enrolled HB 2089 §§ 5, 9]
    • citation: HB 2089 (2025) §§ 5, 6(3)(c)(B), 9(5)(a)–(b) (codified ORS 312.500–312.560); ORS 98.392, 98.396.
  • Notice to former owner required? Yes — (1) the ORS 312.125 redemption- expiration notice now warns of the surplus right (HB 2089 § 2); and (2) within 60 days after a surplus could arise, the county must mail a surplus notice to the claimant, the Treasury Estates Administration Program, DOR, DOJ, and any municipality (HB 2089 § 3). [Source: Enrolled HB 2089 §§ 2, 3]

4. Mortgage Foreclosure

  • Process: both. Most residential loans use a trust deed foreclosed non-judicially by trustee’s sale (“foreclosure by advertisement and sale,” ORS 86.705–86.815); traditional mortgages and elected actions use judicial foreclosure (ORS ch. 88). [Source: oregon.public.law — ORS 86.797; nolo.com summary]
  • Timeline (non-judicial trustee’s sale):
    • Notice of default recorded and the sale date set not less than 120 days after notice (ORS 86.756/86.764; nolo summary “no less than 120 days”). [Source: nolo.com; statute section flagged for direct pull]
    • Service/mailing of the notice of sale to the grantor and interested parties; publication; the sale is a public auction by the trustee.
  • Reinstatement right: Yes — the grantor (or others entitled) may cure the default and reinstate at any time before the trustee’s sale by paying the arrears, costs, and fees (ORS 86.778). [Source: nolo.com summary citing ORS 86.778; statute pull flagged.]
  • Redemption after sale:
    • Non-judicial trustee’s sale: none — Oregon provides no post-sale redemption after a trustee’s sale. [Source: nolo.com; oregonrealtors.org]
    • Judicial foreclosure / execution sale: 180 days post-sale (ORS 88.106; ORS 18.964(2)); a lien claimant’s redemption window is 60 days (ORS 18.964(3)). [Source: oregon.public.law — ORS 18.964; ORS 88.106]
  • Deficiency judgment: barred after a trustee’s sale (“an action for a deficiency may not be brought after a trustee’s sale”) and after judicial foreclosure of a residential trust deed (ORS 86.797(2)); limited exceptions for guarantors and non-residential collateral (ORS 86.797(4)). [Source: oregon.public.law — ORS 86.797]
  • Surplus distribution (mortgage): trustee’s-sale proceeds pay sale costs, the beneficiary’s debt, then junior lienholders by priority, then the grantor (general rule; ORS 86.797/86.764 disposition-of-proceeds). [Exact disposition section flagged for direct pull.]
  • Sale officer: trustee (non-judicial); sheriff (judicial / execution sale).

5. Sale Procedure Playbooks

County tax-foreclosure procedure → see treasurer-sale

  1. Taxes go three years delinquent (ORS 312.010); tax collector lists the parcel.
  2. Within set dates the collector publishes the foreclosure list in a county newspaper and mails notice (certified + first-class) to owners of record (ORS 312.040, as amended by HB 2089 § 1), and files the application for judgment (ORS 312.060).
  3. Court enters the judgment of foreclosure (ORS 312.090) and orders the parcels sold to the county (ORS 312.100); the two-year redemption period begins.
  4. ≥1 year before redemption expires, the collector mails the ORS 312.125 notice (now including the surplus right) (HB 2089 § 2); the county also notifies DOR/DOJ/municipality (§ 4).
  5. If unredeemed, the property is deeded to the county (ORS 312.200); all redemption rights end on execution of the deed. Title vests free of liens except municipal local-improvement assessments (ORS 312.270).
  6. Disposition (HB 2089 § 6): the county may retain for public use / transfer to a nonprofit; primary residences are listed with a real estate broker at a price = highest reasonably expected; otherwise a public high-bid auction (min. bid ⅔ FMV) is held after three failed broker attempts or a 12-month listing.
  7. Surplus is determined within 60 days, costs deducted (§ 8), and the surplus delivered to the State Treasurer within 30 days as unclaimed property (§ 10).

Sheriff / judicial mortgage sale → see sheriff-sale

  1. Lender files a judicial foreclosure complaint (ORS ch. 88).
  2. Decree of foreclosure; sheriff conducts the execution sale.
  3. 180-day redemption runs post-sale (ORS 18.964); 60-day window for lien claimants; deficiency barred on residential trust deeds (ORS 86.797).
  • Notice requirements: tax foreclosure — newspaper publication + certified and first-class mail to owners of record (ORS 312.040, HB 2089 § 1); due diligence to locate owners (ORS 312.040(2)); ORS 312.125 redemption-expiration notice ≥1 year out. Trustee’s sale — recorded notice + 120-day notice + publication + service. [Source: oregon.public.law — ORS 312.040, 312.125; Enrolled HB 2089 §§ 1–2]
  • Upset bid / confirmation: tax deed to county requires no confirmation (ORS 312.200). Judicial sales follow ORS ch. 88 / execution-sale confirmation.
  • Payment terms: redemption — cash/cashier’s check/money order, no partial payments (county practice). Auction — county auction terms.
  • Deed issued: county tax deed (vests title free of liens except municipal local-improvement assessments, ORS 312.270); a bona fide purchaser then buys from the county by deed reciting consideration (HB 2089 § 8(3)(b)); trustee’s deed (non-judicial); sheriff’s deed (judicial). [Source: oregon.public.law — ORS 312.270; Enrolled HB 2089 § 8]

6. Due Process & Notice → see due-process-notice

  • Standard: Oregon’s in-rem scheme combines a conclusive presumption of notice (every owner “conclusively shall be deemed to have taken notice” of assessment, due dates, liens, and the in-rem foreclosure process, and has a continuing duty to investigate) (ORS 312.216) with a declared public policy of title stability (ORS 312.214). At the same time, ORS 312.040 / 312.125 require mailed (certified + first-class) notice to owners and lienholders of record plus publication and due diligence to locate owners — aligning with mullane-v-central-hanover (“reasonably calculated”) and mennonite-v-adams (mailed notice to record lienholders). [Source: oregon.public.law — ORS 312.216, 312.214, 312.040, 312.125]
  • Required attempts: publication + certified and regular first-class mail to each owner of record (ORS 312.040(1)); due-diligence record/database search (ORS 312.040(2)); for lienholders/corporations, mail to the address shown in records or the registered agent (ORS 312.125(4)–(6)). [Source: Enrolled HB 2089 §§ 1–2]
  • Consequence of defective notice: voidable, narrowed by statute. A tax deed is not void for “irregularities, omissions or defects” unless the record owner was actually misled to the owner’s injury, and challenges are time-barred after two years (ORS 312.230). For a city treasurer’s failure to give a requested mortgagee/lienholder notice, the deed is void until notice is given and for 30 days thereafter (ORS 312.216-related city provision). [Source: oregon.public.law — ORS 312.230; search snippet on city-treasurer void rule — flagged for exact section.]
  • Leading cases: otto-and-harkson-v-josephine-county (statutory bar / void-deed challenge), tyler-v-hennepin-county (surplus takings). Additional notice-specific Oregon appellate cases flagged in needs_verification.

7. Title & Marketability

  • Deed warranty level: the county tax deed conveys title free from all liens and encumbrances except municipal local-improvement assessments (ORS 312.270); the subsequent county-to-purchaser deed is a statutory conveyance reciting consideration (HB 2089 § 8(3)(b)). [Source: oregon.public.law — ORS 312.270]
  • Marketable immediately? Largely yes by statute — ORS 312.214 declares a policy of “utmost stability” for county tax-foreclosure title, and ORS 312.230 bars most challenges after two years; in practice title insurers may still require curative steps. [Source: oregon.public.law — ORS 312.214, 312.230]
  • Quiet title required? Generally not required to vest title (no confirmation needed, ORS 312.200), but a quiet-title action may be used to clear specific clouds; ORS 312.230 itself functions as a statute of prescription. [Source: oregon.public.law — ORS 312.200, 312.230]
  • SOL to challenge deed: two years from the judgment of foreclosure and sale to the county (ORS 312.230); a challenger must pay into court the judgment amount + taxes/penalties (or judgment + 6% if claiming against a county grantee) with the first pleading. [Source: oregon.public.law / search snippet — ORS 312.230]
  • Title insurance availability: generally available given the statutory title-stability policy and two-year bar, sometimes after a curative period. [Industry practice — flagged.]
  • Common defects: defective ORS 312.040 / 312.125 notice where the owner was actually misled (ORS 312.230); missed lienholder/mortgagee notice; chain-of-title gaps; municipal local-improvement assessments surviving the deed (ORS 312.270).

8. Case Law (real, verified)

CaseYearTopicHolding (plain English)Source
tyler-v-hennepin-county2023surplus, due_processA county may not keep the surplus equity above the tax debt when it forecloses and sells a home; retention is an unconstitutional taking under the Fifth Amendment (598 U.S. 631). This is the constitutional basis for Oregon’s HB 2089 (2025) surplus-return reform.https://supreme.justia.com/cases/federal/us/598/22-166/
otto-and-harkson-v-josephine-county1956sale_procedure, due_process, redemptionOregon Supreme Court tax-foreclosure decision (207 Or. 199); owner sought to void a county tax deed for missing publication/proof-of-notice and to redeem, but the statutory limitations/curative scheme (now ORS 312.230) governed the validity of the foreclosure deed. Illustrates Oregon’s strong title-stability bar.https://law.justia.com/cases/oregon/supreme-court/1956/207-or-199-3.html

Topic-coverage note: redemption, due_process, sale_procedure, and surplus are each touched by the two verified cases above (Tyler = surplus/due_process; Otto & Harkson = sale_procedure/redemption/due_process). Additional Oregon-specific verified cases for each tag are an open gap (see Module 11); the statutory citations carry the doctrinal load in the meantime.

9. Edge Cases (state-specific notes)

  • bankruptcy-automatic-stay — A bankruptcy filing stays the ch. 312 foreclosure / deeding and can cure delinquent taxes through a plan; the two-year ORS 312.120 period is tolled by the automatic stay (federal overlay; statute silent). HB 2089 expressly permits an assignment of a surplus claim “in a bankruptcy proceeding” (§ 9(5)(b)).
  • federal-tax-lien-redemption — The IRS holds a 120-day redemption right after a sale that discharges a federal tax lien (26 U.S.C. § 7425) — federal overlay.
  • heirs-property — Heirs/devisees of the former owner are “claimants” for surplus (HB 2089 § 5(1)(a)(B)); an heir who occupied the home >1 year is presumed authorized to receive surplus for all heirs absent objection (§ 9(3)(c)).
  • scra-protections — SCRA may toll redemption / postpone sale for active-duty servicemembers (federal overlay).
  • Waste / abandonment (reduced redemption) — a county may shorten redemption to 30 days after a noticed hearing where the property is subject to waste, or unoccupied ≥6 months with substantial depreciation (ORS 312.122).
  • Municipal local-improvement assessments — these survive the county tax deed (ORS 312.270), unlike other liens which are extinguished.
  • Void vs. voidable — Oregon treats most tax-deed defects as non-fatal unless the owner was actually misled (ORS 312.230); contrast strict-compliance states. See void-vs-voidable.
  • Assignment bar (third-party recovery) — surplus-claim assignments are void except protective ones (HB 2089 § 9(5)(b)); see third-party-recovery-rules.

10. Operations

11. Meta

Legal information, not legal advice. This page summarizes Oregon statutes and case law for research purposes. Statutes and local county procedures change; verify against the cited primary sources and consult a licensed Oregon attorney before acting. Last verified: 2026-06-01.

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