Foreclosure in Salem, Oregon

“A foreclosure is a legal process by which a lender attempts to recover the amount owed on a defaulted loan by taking ownership of and selling the mortgaged property. Typically, default is triggered when a borrower misses a specific number of monthly payments. Still, it can also happen when the borrower fails to meet other terms in the mortgage document.” Investopedia

Home Loan Default

A home loan default occurs when a homeowner falls on making home mortgage payments.

Negative Equity

The vast majority of foreclosures are caused by negative equity from price declines. Negative equity occurs when a home’s value falls, causing the homeowner to owe more on the mortgage than what the home is worth. When negative equity happens, a homeowner’s best options are usually to refinance, if possible, or sell.

Rising Interest Rates

Some foreclosures can be attributed to subprime mortgages, which initially see low introductory interest rates, only for those rates to reset at incredibly high values a few years later. This can easily make it difficult for homeowners to keep up with mortgage payments. Homeowners with lower credit scores also become the primary recipients of subprime mortgages, further complicating things.

The Five D’s

Several personal scenarios can ultimately lead to foreclosure as well. Five of these scenarios are commonly referred to as “the five D’s.

Death: A death in the family is a leading cause of foreclosure, mainly when it happens to be the head and primary breadwinner of the household who passes.

Divorce: Frequently, divorce means that one person is designated as responsible for making the mortgage payments. This can put financial stress on the person making the mortgage payments, especially if there are late spousal support payments. The pressure of the divorce process (both emotional and financial) and poor communication can also mean late mortgage payments.

Drugs: Substance dependence and addiction affect people from all walks of life. If the problem gets bad enough, drug and alcohol financing can easily prioritize mortgage payments.

Disease: Unexpected medical bills are the leading cause of bankruptcy in the US, so it makes sense that they also lead to foreclosure. Chronic illnesses, catastrophic emergencies, and inadequate health insurance can create financial stress that ultimately means defaulting on your mortgage.

Denial: Finally, there is the denial. A variety of factors can come together to put a person under financial stress, and rejection can prevent that person from acknowledging that their current lifestyle is not compatible with keeping up with mortgage payments.

Foreclosures are surging now that Covid mortgage bailouts are ending

Foreclosures are beginning to rise as government and private sector programs designed to help homeowners cope with the economic consequences of the Covid-19 pandemic have started to expire.

Mortgage lenders began the foreclosure process on 25,209 properties in the third quarter, a 32% increase from the second quarter. On a year-over-year basis, it’s a 67% increase from the third quarter of 2020, according to ATTOM, a mortgage data firm.

Sell your house Fast Portland

While the increases in foreclosures are dramatic, they come from the extreme lows created by the forbearance programs. New foreclosures, also known as startups, generally number about 40,000 per month. They fell to just 3,000 to 4,000 in the first year of the pandemic, when leniency programs were in full effect.

Government and private sector aid programs allowed distressed borrowers to delay their monthly payments for up to 18 months. Late payments could be added at the end of the loan period or be paid when the home was sold, or the mortgage was refinanced.

September foreclosure actions were almost 70% lower than they were pre-pandemic. Total foreclosure activity is also still 60% lower than it was a year ago.

 Salem, OR Home Value

There are currently 60,237 real estate properties in Salem, Oregon, with an Automated Valuation Model (AVM) median price of $ 368,000.00. 

What is an AVM? It is a smart computer program that analyzes and predicts the approximate value of a home, property, or land in Salem, Oregon, based on current market trends, comparable nearby real estate sales, historical data, and of course, characteristics of the property, among other variables. 

These automated home estimates are often beneficial as they give buyers and sellers a better idea of ​​a home’s value before the negotiation process. 

For example, the median home price in Salem, Oregon, is $ 393,564.00, with the most expensive home in Salem, Oregon, topping $ 17,824,700.00 and the cheapest home in Salem, Oregon, at $ 64,400.00. In other words, there is something for every potential home buyer or savvy investor in Salem, Oregon.

Sell your house Fast Portland

How To Save Your Home From Foreclosure?

Understanding what causes house foreclosures can help homeowners avoid these scenarios and ultimately help save their homes.

There are a few options available to homeowners who are at risk of defaulting on their loans. 

Options After a Notice of Default

When the lender files a Notice of Default, your options are limited. This is why it is best to call your lender before falling behind on your payments, as lenders are often reluctant to set payment schedules once foreclosure proceedings have begun.

You will be given a specific time to update payments, pay foreclosure filing costs, and stop foreclosure. This is called reinstating your loan. If you can’t get back, your late-payments and the lender won’t work with you. There are other options to stop foreclosure:

Consider bankruptcy: Legal action like bankruptcy can stop all foreclosure actions. Call an attorney who specializes in filing for bankruptcy and ask for a detailed explanation of all your options, costs, and the time frame involved. It won’t permanently stop foreclosure, but it can postpone it.

Refinancing can provide a lower interest rate that the homeowner may be able to afford long-term. 

Short sell the property. Short selling, or selling for less than the amount owed to the lender, is still damaging to a homeowner’s credit but has less impact on the credit score than a foreclosure. With a short sale, a person may also have the ability to buy a house sooner in the future.

Sell your home: One way to avoid foreclosure is to sell your home and get enough to pay off everything you owe the lender, including back mortgage payments, penalties, and fees. You won’t own your house anymore, but you won’t have the home foreclosed upon, which would do severe damage to your credit.

In order to have a better picture, Interview a real estate agent to get an opinion of your home market value and average days on the market to sell your home. Make the numbers that may represent the money out from your pocket to comply with the real estate agent’s requirements and the time and expenses while your house is listed.

You can sell your home up until it is sold at auction or the bank takes possession of it. During this time, the house is considered in “pre-foreclosure,” and you can settle your debts with your lender.

Selling A Foreclosed Home 

If you decide to sell, tell your lender that you plan to list the property for sale to pay off the mortgage. Ask the lender to postpone a foreclosure auction or sale and give you a chance to find a buyer.

Of course, deciding to sell sooner rather than later will take some pressure off the deal and give you more time to get the best price for the property. 

Be sure to ask your lender how long they have before the property goes up for auction. It all depends on the state where you live. In some states, lenders can auction property in less than a month; in others, lenders cannot auction home for more than one year.

In Oregon, a Foreclosure may be in court or out of court, depending on the loan agreement terms. Federal laws and state laws grant rights and responsibilities to both parties, debtors, and creditors.

The Oregon foreclosure process could take nine months to a year, depending on the bank and how backed up the courthouse is in the county you reside in. 

Some lenders are very quick with processing foreclosures because they have had so many recently, and they know they should make it happen fast. The average foreclosure process takes approximately 6 months from when the borrower misses the payment until the home auction sells.

Judicial process and non-judicial process.

In the judicial process, the lender has to file a lawsuit in court. The debtor receives a notice from the court to take the necessary steps to avoid opening a trial. If the court determines the lender can act on the property, a judgment is issued to sell the house so that the credit institution can recover the home value.

Non-judicial process. In Portland and the state of Oregon, many residential foreclosures are conducted out of court; this is because a “Power to Sale right to sell” clause is included in the loan agreement. The Power of Sale clause authorizes a lender to sell a property in the event of default. Thus the lender has the opportunity to recover the value of the credited debt.

The truth is that the indebted owner also has rights and possibilities to get out of the problem without affecting his credit history and acquiring loans in the future.

The City of Portland website has information that guides homeowners to avoid foreclosure. Similar information is found on the Oregon state page

Oregon has legal aid programs for people with low income or who have lost their income, especially now, when we are experiencing the effects of the coronavirus.

In Portland, law firms specializing in real estate matters have valuable information on avoiding a Foreclosure too.

The coronavirus pandemic has caused significant economic damage. Many people are unemployed in Salem and across the state. Still, statistics show that until July  2021, the unemployment rate in Oregon remained at 5.2%

We Buy Your Property!

We can help you quickly get out of the possibility of a foreclosure process, losing your house, fines, interests, taxes, and lowering your credit score due to a judgment.

As we say at the beginning of this publication, it is necessary to act quickly. Information is vital to find out all the possible alternatives to avoid a Foreclosure.

An intelligent alternative to avoid a judicial process is selling the property. Suppose you are already facing foreclosure or simply have a few months behind with your mortgage payments. Selling your property will give you the chance to get back on your feet quickly.

Take the bull by the horns. Selling may be the right option for you to prevent foreclosure and all its negative consequences. 

Sell your house Fast Portland

Typically, our home buying process is  1,2 and 3 steps,

  • Step one, knowing where your property is located and scheduling a visit to see it physically.
  • Step two, we will evaluate the property and present you with an offer for your house.
  • Step three, we will close in about seven days. You receive money for your house.


There are multiple reasons why a property enters a legal process that authorizes its forced sale. Also, there are numerous reasons why a person or a company stops paying for a property. But every problem indeed has a solution. 

Although the pandemic, the Salem real estate market is “hot,” properties are selling faster than usual and at higher prices than the listing price. Home equity had reached over 20% and higher in many cases.

However, not all people who need to sell their properties right away can take advantage of Salem’s seller market. Many homeowners in need of selling don’t have the money to perform home repairs, advertising, expenses, and time to showings.

The negative aspect of today’s economy is that many people cannot recover soon. Some homeowners would not be able to get their mortgage loan current and eventually will face foreclosure. 

There are options to cope with and minimize the damage that personal or financial distress can cause. For homeowners facing foreclosure or those in a pre-foreclosure process, selling the property will allow them to begin their recovery sooner rather than later.

We will help you avoid foreclosure, reduce the negative impact on your credit report, and give you a hand you need to get back on your feet.

Feel free to contact us at any time. We will help you.


Hi, I'm Scott Dalinger a real estate investor in Portland, Oregon. I focus on helping homeowners and rental property owners out of negative situations by offering cash for their property. I research and write about real estate on my business website.

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