Two Oregon Supreme Court decisions involving the Mortgage Electronic Registration Systems put bankers in Oregon on a path back to filing non-judicial foreclosures again, said Kevin Christiansen, government affairs director for the Oregon Bankers Association.
But it’s likely to be a slow path walking back, not a highway with servicers and lenders still acting conservatively in a state where MERS’ role in the assignment process has been under attack and mandatory foreclosure mediation is delaying the default process, the OBA said.
The Oregon Supreme Court launched two decisions Thursday: Niday v. GMAC and Brandrup v. Reconstruct Co.
To the benefit of foreclosing parties, the court held Oregon’s foreclosure statute does not require the recording of assignments of the trust deed by operations of law.
This portion of the decision was generally cited as a positive for banks, with MERS saying the ruling would allow lenders to move forward with non-judicial foreclosure proceedings.
But as reported Thursday, the case is not so cut and dry. A few outliers could cause banks to tread lightly or at least wait until attorneys have a full grasp of each part of the decisions.
"I think it’s a very technical opinion, and we are still trying to dig through the decisions," Christiansen told HousingWire. "Our big concern was the Niday decision, which effectively stopped non-judicial foreclosures in our state. But again, there are some contours that our attorneys are trying to wrap their arms around," Christiansen explained.
Some of the areas of concern may relate to the Oregon Supreme Court’s determination that MERS is not a rightful beneficiary of the trust deed when analyzing its construction against the Oregon Deed Trust Act.
Still, the court gives MERS a way around this if it can show evidence of an agency relationship with the financial firms involved in the various real estate transactions.
MERS responded Thursday saying it believes it can establish this type of authority.
Christiansen said between the Niday decision, which has been pending for months, and an Oregon law requiring mandatory foreclosure mediation passed last summer, nonjudicial foreclosures have stalled in the state.
"Between the two of them, non-judicial foreclosures really dried out. We have been in a state where by and large if you are going to foreclose, it has been judicially," he added.
How quickly the Niday opinion changes that is still up for debate.