It seems legal barriers and a pending court case involving the Mortgage Electronic Registration Systems has turned Oregon into a de facto judicial foreclosure state. 

For starters, the state ended up dealing with legislation last summer that mandated foreclosure mediation for borrowers.

In addition, a key court case involving MERS is still pending at the Oregon Supreme Court.

Lenders are waiting to see if the state’s supreme court holds up a lower court’s interpretation that MERS does not possess the ability to assign foreclosing authority — a set up that builds more uncertainty into the nonjudicial foreclosure process for lenders.

HousingWire previously reported that these two issues could cause a surge in judicial foreclosure filings in the state.

A new report from The Oregonian seems to support this theory.

Writer Elliot Njus writes:

Court-supervised foreclosure starts surged again in February, according to a reseller of foreclosed homes.

Oregon’s seven largest counties collectively reported legal action on 996 properties, according to Gorilla Capital, a Eugene company buys, redevelops and sells foreclosed homes. Those numbers mostly represent foreclosure cases.

That’s 65 percent more cases than seen a month earlier. And it rivals the 1,036 out-of-court foreclosure starts recorded in those counties a year earlier, before legal complications sent most foreclosures into the court system.