Editor: David Reiss
Brooklyn Law School

July 16, 2013

Oregon Court Rejects Plaintiff’s Argument That the Trust Deed Can Only be Foreclosed if a Single Entity Holds Both the Note and Deed

By Ebube Okoli

After receiving a Notice of Default and Election to Sell, the plaintiff in Spencer v. Guaranty Bank et al., No. 10CV0515ST, Deschutes Co. Circuit (May 5, 2011) sought an injunction barring MERS, as well as the other defendants, from bringing a foreclosure action. The court granted the defendants’ Motion to Dismiss with prejudice.

In addition to the court granting the motion to dismiss, the court also noted that the plaintiff “made no claim that she was not in default nor that any requirement of ORS 86.735 were not satisfied,” the court held that MERS satisfied the statutory definition of “beneficiary” under ORS 86.705. Specifically, the court identified that it was “not persuaded that Mortgage Electronic Registration Systems couldn’t act in that capacity, even if it is not the holder of the note.”

Moreover, the court also rejected the plaintiff’s argument that the trust deed can only be foreclosed if a single person or entity holds both the note and deed, noting that ORS 86.770(2) protects the plaintiff from a lawsuit seeking enforcement of the note after the non-judicial sale. “The bottom line is that plaintiff sought to retain ownership, apparently forever, of a property for which she has not paid nor even alleges that she intends to pay for. She has not stated a claim.”

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