Effective Immediately, Senate Bill 368 Clarifies Money Awards in Foreclosures

In a suit for judicial foreclosure, a plaintiff has the option of asking the court for a money award against a debtor. After amendments to the Oregon statutes dealing with judicial foreclosure from 2003 to 2007, some circuit courts began interpreting these provisions to require a money award against the person obligated on the debt, even if contrary to other applicable law or an agreement with the debtor. This created problems in the form of inconsistent rulings and improper money awards against debtors.

Senate Bill 368 clarifies any misunderstanding in the intention of the legislature relating to money awards in judicial foreclosures. Going forward, the newly amended statutory language clearly communicates that a money award is an option a plaintiff may pursue if desired, but a court is not required to include a money award in the judgment. This clarification will allow courts to include money awards upon request of the plaintiff in judicial foreclosure cases but avoid them where the law does not allow or by agreement of the parties.

SB 368 affirms courts have leeway to craft a judgment without a money award where it is appropriate in a particular judicial foreclosure case. If you have questions about judicial foreclosures or any other bankruptcy  or creditor matter, an attorney in our Bankruptcy and Creditors’ Rights group would be happy to assist you.