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CALawyer
CALawyer, Lawyer
Category: Real Estate Law
Satisfied Customers: 1655
Experience:  Practicing Real Estate Attorney
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How much savings can you have in the bank while going through

Resolved Question:

How much savings can you have in the bank while going through a foreclosure or short sales? I lost my job, my husband has income (not enough) and we have some savings but we can no longer pay our mortgage. Do we have to spend all our cash towards our payments? It is being saved for a collage education for our nefew.
Submitted: 4 years ago.
Category: Real Estate Law
Expert:  CALawyer replied 4 years ago.
What state is the property in?

Is the foreclosure from a first mortgage, second mortgage?

Was it a purchase money loan (ie. was the house bought with it)?
Customer: replied 4 years ago.
oregon is the state
first mortgage only
yes it was a purchase money loan
Expert:  CALawyer replied 4 years ago.
Oregon has an anti-deficiency statute. That means that when a lender no a residential home forecloses, all they get is the house. They can't go after the owner for anything else.

Here is the text of the statute:

86.770 Effect of sale. (1) A sale made by a trustee under ORS 86.705 to 86.795 shall foreclose and terminate all interest in the property covered by the trust deed of all persons to whom notice is given under ORS 86.740 and 86.750 and of any other person claiming by, through or under such persons, and such persons shall have no right to redeem the property from the purchaser at the trustee’s sale. The failure to give notice to any of these persons shall not affect the validity of the sale as to persons so notified.
(2) Except as provided in subsection (4) of this section, no other or further action shall be brought, nor judgment entered for any deficiency, against the grantor, or the grantor’s successor in interest, if any, on the note, bond, or other obligation secured by the trust deed or against any other person obligated on such note, bond or other obligation after a sale is made:
(a) By a trustee under ORS 86.705 to 86.795; or
(b) Under a judicial foreclosure of a residential trust deed.
(3) Notwithstanding ORS 88.070, when there is a judicial foreclosure of a trust deed that is not a residential trust deed, the judgment shall provide that if the sale proceeds are insufficient to satisfy the judgment, execution may issue for any amount by which the unpaid balance of the obligation secured by the trust deed exceeds the net sale proceeds payable to the beneficiary.
(4) Nothing in this section shall preclude an action judicially or nonjudicially foreclosing the same trust deed as to any other property covered thereby, or any other trust deeds, mortgages, security agreements, or other consensual or nonconsensual security interest or liens covering any other real or personal property security for the note, bond or other obligation secured by the trust deed under which a sale has been made or an action against a guarantor to the extent of any remaining deficiency following judicial foreclosure. A guarantor of an obligation secured by a residential trust deed shall not have the right to recover any deficiency from the grantor or any successor in interest of the grantor. [1959 c.625 §§12, 13; 1965 c.457 §9; 1981 c.811 §1; 1983 c.719 §8; 1985 c.817 §7; 1989 c.190 §6; 1997 c.786 §1; 2007 c.166 §16]



A creditor can't take money out of a bank account without first getting a judgment from a Court. A lender who forecloses against a residential property in Oregon can't get a deficiency judgment. The money is of no concern of theirs.

If the bank account is with the same bank as the mortgage, it might be a good idea to move the funds so they don't try to take it, however.


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Remember, this is for entertainment and educational discussion only and is not intended as legal advice and that no attorney client relationship is formed.
Customer: replied 4 years ago.
The money is not in a citibank account. Would I be safer to take the money out all together? Does the lender ever have the right to request your bank statements at all to see what money you have and what you have been doing with it?
I know you may have already answered me but I just want to make sure I ask the question in the right way.
Expert:  CALawyer replied 4 years ago.
The lender has no right to bank accounts without obtaining a money judgment, which they can't.

If they did a judicial foreclosure, they could probably subpoena bank account records, but they don't have any right to anything. Also, the bank account records might not even be relevant.

If someone chooses not to pay and it is a residential mortgage they can foreclose... that is all.


If this information was helpful, please click ACCEPT to give me credit for answering. Bonuses and positive feedback are appreciated if deserved. If you have any related follow up questions or need clarification, just ask!

Remember, this is for entertainment and educational discussion only and is not intended as legal advice and that no attorney client relationship is formed.
CALawyer, Lawyer
Category: Real Estate Law
Satisfied Customers: 1655
Experience: Practicing Real Estate Attorney
CALawyer and 4 other Real Estate Law Specialists are ready to help you

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