OR Operations Summary

WFG Entity Licensed in Oregon

WFG National Title Insurance Company

Title Insurance in Oregon Generally

Regulation:

Title insurers and their agents are regulated by the Oregon Insurance Commissioner under the provisions of the Oregon Insurance Code (ORS chapters 731–750).

OTIRO:

The policy and endorsement forms used and the rates charged for title insurance are reviewed and proposed first by the Oregon Title Insurance Rating Organization (“OTIRO”) and must be approved by the Oregon Insurance Commissioner. See ORS 742.003, ORS 737.205–737.560.

Forms and Rates:

Oregon is a filing state. This means that all policy, endorsement, and guarantee forms must be approved by the Insurance Commissioner before issuance. ORS 732.825, ORS 742.003. Proposed rates are tested under ORS 737.310 and the practice of paying rebates, discounts, or commissions is prohibited. ORS 746.055.

As a result of these stringent regulations, Oregon insurers offer fewer endorsements and have less flexibility than states in which company policy determines permitted coverage and the regulatory agency need only be notified.

In addition, since all of the title companies doing business in Oregon are members of OTIRO, the policy and endorsement forms used and the rates charged are the same. There is no difference in coverage and fees among Oregon title insurers.

A comprehensive and current listing of policies, endorsements, and other products available in Oregon can be found in the Oregon Rating Manual, published by OTIRO and located at http://oregonlandtitle.com/files/otiroratemanual.pdf.

Preliminary Title Reports and Title Commitments:

In response to a request for a title policy, Oregon title insurers can issue either a preliminary title report (“PTR”) or a title commitment. In the vast majority of cases a PTR is requested and issued.

Escrow Issues:

Who May Act as Escrow Agent:

Oregon law prohibits persons not licensed as escrow agents from carrying on escrow business or acting in the capacity of an escrow agent. ORS 696.511(1). In addition to the statutory scheme, the Oregon Real Estate Agency adopts rules and regulations governing escrows and escrow agents, which are set forth in OAR 863-050-0000 to 863-050-0150.

Acceptance and Disbursal of Funds:

An escrow agent may not accept funds, property, or documents in any escrow transaction without dated, written escrow instructions from the principals to the transaction, or a dated, executed, written agreement between the principals. ORS 696.581(1).

An escrow agent may not close an escrow or disburse funds without separate written instructions from the principals adequate to administer and close the transaction or disburse funds. ORS 696.581(3). However, an escrow agent may accept client funds that are in excess of earnest money required in the transaction, as individual funds of the principal who paid them. Those funds may be disbursed with only the separate written instructions of the principal who deposited the funds. Similarly, an escrow agent may open a one-sided escrow and disburse those funds with only the separate written instruc¬tions of the principal who deposited the funds. ORS 696.581(6)–(7).

Typical Cost Allocation:

The seller is generally responsible for the cost of the owner’s or purchaser’s policy of title insurance, one-half of the escrow fee, the cost of clearing encumbrances against title (including recording the releases or satisfactions of liens), and the commission for the sale of the property. The seller is generally responsible for taxes and utilities to the closing date (utilities are frequently handled outside of escrow). The buyer is generally responsible for one-half of the escrow fee, the cost of recording the mortgage or deed of trust on the property, any fees in connection with the loan, the cost of the lender’s policy of title insurance, and taxes and utilities after the closing date. The buyer is responsible for insurance from the closing date, which is usually handled by obtaining an insurance binder. Of course, the parties are free to agree to other allocations.

Oregon Tax Reporting:

An escrow agent must withhold and remit tax to the Oregon Department of Revenue (“ODR”) in connection with gains on sales of property by certain nonresidents, and forward the Form WC (Written Affirmation for Withholding on an Oregon Real Property Con¬veyance) to the ODR.

Accounting Practices:

An escrow agent may not draw, execute, or date a check before the account has sufficient monies to pay the check. An escrow agent may not withdraw or transfer money from any individual escrow account or escrow trust unless such account has sufficient monies for such payment or transfer.

An escrow agent may not withdraw escrow fees from a closing escrow account until (a) the escrow is cancelled; or (b) the escrow is closed with the exception of customary post-closing procedures as contained in the escrow instructions of the principals to the escrow transaction.

An escrow agent may deposit only the funds received as part of an escrow transaction or as trustee of a trust deed in an account established under ORS 696.578.

All funds deposited in an escrow trust account established under ORS 696.578 may be withdrawn, paid out, or transferred to other accounts only as specified in the written escrow instructions of the principals to the escrow transaction directed to the escrow agent or pursuant to order of a court of competent jurisdiction.

An escrow agent must deposit all checks or cash received in escrow into the agent’s escrow trust account established under ORS 696.578 no later than the close of business of the banking day the day after the agent receives the checks or cash. This requirement does not apply to checks received from a lender who requires that the checks not be deposited until an escrow is ready to close.

Recording/Document Requirements and Process

Recording Statute:

Oregon’s recording law is a race-notice law, is set forth in ORS 93.640, and protects (i) a subsequent purchaser, (ii) in good faith, (iii) for valuable consideration, (iv) who records first.

Recording Duties:

Under ORS chapter 205, the county clerk has the recording duties associated with documents affecting title to real property situated in that county. In performing these duties, the county clerk bears the non¬-statutory but commonly used designation of county recorder.

Recording Requirements:

County recording officers can refuse to record a document if it is not legible, ORS 205.130(2), and proper notarial acknowledgments are required for recorded documents. ORS 205.130(2)(a). If the notary block complies with Oregon law or the law of the state in which the notary is taken, it will be sufficient for recording in Oregon. Oregon acknowledgment forms are set forth in ORS 194.285.

All instruments must be typed, written, or printed in 8-point type or larger on paper that is not larger than 14 inches long and 8-1/2 inches wide and which paper is of sufficient quality for recording photographically.

The first page of each instrument must contain a description of the transaction to be recorded; the names and addresses of the grantor and grantee; and the name of the person and address to whom the instrument will be delivered after recording.

For instruments conveying or contracting to convey fee title to any real estate and all memoranda of such instruments, the true and actual consideration paid for such transfer must be stated, unless the actual consideration consists of or includes other property or other value given or promised, in which event it must only be noted on the face of the instrument that other property or value was either part or the whole consideration.

For instruments conveying or contracting to convey fee title to real estate, a statement must be included that “until a change is requested, all tax statements shall be sent to the following address:” and then listing the address.

Recording Fees, Registration, Filing Fees, Recording Taxes:

Oregon does not require a mortgage registration or filing tax or fee for filing of a mortgage or deed of trust, aside from the standard county recording fee (which varies for each county) to record documents.

However, Washington County imposes a transfer tax on each transfer of real property (e.g. conveyance of the property) located within Washington County, unless an exemption applies; no other county in Oregon imposes such tax. This tax is not applicable to recording mortgages, trust deeds, or other security interests. After Washington County adopted the transfer tax, the Oregon legislature adopted ORS 306.815, which now prohibits any other counties from taking the same action.

Recording Process:

Documents may be recorded with the county recorder’s office in person, via mail, or electronically using a recording service such as Simplefile. Documents are typically recorded prior to disbursement of transaction funds.

Land Use Disclaimer:

Except for owner’s sale agreements or earnest money receipts, the following warning must appear in the body of any instrument “trans¬ferring or contracting to transfer fee title to real property.” ORS 93.040.

BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON TRANSFERRING 
FEE TITLE SHOULD INQUIRE ABOUT THE PERSON’S RIGHTS, IF ANY, UNDER ORS 
195.300, 195.301 AND 195.305 TO 195.336 AND SECTIONS 5 TO 11, CHAPTER 424, 
OREGON LAWS 2007, SECTIONS 2 TO 9 AND 17, CHAPTER 855, OREGON LAWS 2009, 
AND SECTIONS 2 TO 7, CHAPTER 8, OREGON LAWS 2010. THIS INSTRUMENT DOES 
NOT ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION 
OF APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE SIGNING OR 
ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE 
PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING 
DEPARTMENT TO VERIFY THAT THE UNIT OF LAND BEING TRANSFERRED IS A 
LAWFULLY ESTABLISHED LOT OR PARCEL, AS DEFINED IN ORS 92.010 OR 215.010, TO 
VERIFY THE APPROVED USES OF THE LOT OR PARCEL, TO DETERMINE ANY LIMITS 
ON LAWSUITS AGAINST FARMING OR FOREST PRACTICES, AS DEFINED IN ORS 
30.930, AND TO INQUIRE ABOUT THE RIGHTS OF NEIGHBORING PROPERTY OWNERS, 
IF ANY, UNDER ORS 195.300, 195.301 AND 195.305 TO 195.336 AND SECTIONS 5 TO 11, 
CHAPTER 424, OREGON LAWS 2007, SECTIONS 2 TO 9 AND 17, CHAPTER 855, 
OREGON LAWS 2009, AND SECTIONS 2 TO 7, CHAPTER 8, OREGON LAWS 2010. 
ORS 93.040(1).

A similar warning must appear in owner’s sale agreements or earnest-money receipts:

THE PROPERTY DESCRIBED IN THIS INSTRUMENT MAY NOT BE WITHIN A FIRE 
PROTECTION DISTRICT PROTECTING STRUCTURES. THE PROPERTY IS SUBJECT TO 
LAND USE LAWS AND REGULATIONS THAT, IN FARM OR FOREST ZONES, MAY NOT 
AUTHORIZE CONSTRUCTION OR SITING OF A RESIDENCE AND THAT LIMIT LAWSUITS 
AGAINST FARMING OR FOREST PRACTICES, AS DEFINED IN ORS 30.930, IN ALL 
ZONES. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON 
TRANSFERRING FEE TITLE SHOULD INQUIRE ABOUT THE PERSON’S RIGHTS, IF ANY, 
UNDER ORS 195.300, 195.301 AND 195.305 TO 195.336 AND SECTIONS 5 TO 11, 
CHAPTER 424, OREGON LAWS 2007, SECTIONS 2 TO 9 AND 17, CHAPTER 855, 
OREGON LAWS 2009, AND SECTIONS 2 TO 7, CHAPTER 8, OREGON LAWS 2010. 
BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE 
TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY 
PLANNING DEPARTMENT TO VERIFY THAT THE UNIT OF LAND BEING TRANSFERRED 
IS A LAWFULLY ESTABLISHED LOT OR PARCEL, AS DEFINED IN ORS 92.010 OR 
215.010, TO VERIFY THE APPROVED USES OF THE LOT OR PARCEL, TO VERIFY THE 
EXISTENCE OF FIRE PROTECTION FOR STRUCTURES AND TO INQUIRE ABOUT THE 
RIGHTS OF NEIGHBORING PROPERTY OWNERS, IF ANY, UNDER ORS 195.300, 195.301 
AND 195.305 TO 195.336 AND SECTIONS 5 TO 11, CHAPTER 424, OREGON LAWS 2007, 
SECTIONS 2 TO 9 AND 17, CHAPTER 855, OREGON LAWS 2009, AND SECTIONS 2 TO 7, 
CHAPTER 8, OREGON LAWS 2010.
ORS 93.040(2).

A second warning is required for an owner’s sale agreement or earnest-money receipt that covers property specially assessed as historic property: “THE PROPERTY DESCRIBED IN THIS INSTRUMENT IS SUBJECT TO SPECIAL ASSESSMENT UNDER ORS 358.505.” ORS 93.040(3). This warning may be included in the body of the sale agree¬ment or by addendum.

Conveyancing Documents, Security Instruments, and Reconveyances

Conveyances:

ORS 93.850 to 93.870 provide statutory deed forms with legislatively-defined terms, effects, and covenants. These statutes establish statutory forms for warranty deeds, special warranty deeds, bargain-and-sale deeds, and quit¬claim deeds. Furthermore, each statutory deed form sets forth the legal effects of the statutory language. ORS 93.870 and ORS 93.975 make clear that the use of the statu¬tory deed forms is permissive and not mandatory, but if another form is used, the parties may not be able to rely on the statute.

In 2012 Oregon adopted the Uniform Real Property Transfer on Death Act (“URPTDA”) ORS 93.948–93.979. The URPTDA provides a will substitute and a means for probate avoidance with respect to real property. Under the URPTDA, an individual may, by recording a transfer-on-death deed, designate a beneficiary or beneficiaries who will acquire title to specified real property on the individual’s death. ORS 93.949(6), ORS 93.953. The transfer-on-death deed has no effect on title to real property during the lifetime of the transferor, and does not create an interest in the designated beneficiary during the lifetime of the transferor. ORS 93.967.

Security Instruments:

The security instrument of choice in Oregon is the Deed of Trust, although Mortgages are available but rarely used. In addition, there is a third form of security instrument in real property that can be used to secure the unpaid portion of the purchase price of real property - the land sale contract.

Reconveyances:

Within 30 days after performance of the obligation that is secured by the trust deed, the beneficiary must deliver a written request to the trustee to reconvey the real property described in the trust deed to the grantor. ORS 86.720(1). Within 30 days after the beneficiary delivers the request to reconvey to the trustee, the trustee must reconvey the real property to the grantor. ORS 86.720(1). The deed of reconveyance is recorded in mortgage records. ORS 86.720(5). The trustee may assess a reasonable charge for executing this instrument. ORS 86.720(1).

If a full reconveyance of a trust deed is not executed and recorded within 60 calendar days after satisfaction of the obligation secured by the trust deed, the grantor may request that the title insurance company or insurance producer prepare and record a release of trust deed. ORS 86.720(2), (5). Before issuing and recording a release, the title insurance company or insurance producer must “give notice of the intention to record a release of trust deed to the beneficiary of record and, if different, the party to whom the full satisfaction payment was made.” ORS 86.720(3). A properly executed and recorded release of trust deed “shall be deemed to be the equivalent of a reconveyance of a trust deed.” ORS 86.720(5). The trustee, title insurance company, or insurance producer may charge a reasonable fee for preparing, executing, and recording the release of trust deed. ORS 86.720(7).

Estates in Real Property

Every conveyance or devise of real property to two or more persons in Oregon creates a tenancy in common unless (i) a clear intention to take with the right of survivorship is expressed in the conveyance or devise, (ii) the grantees are spouses, or (iii) the grantees are identified as trustees or personal representatives. See ORS 93.180.

If the conveyance or devise to two or more individuals includes a declaration of a right of survivorship, the resulting interests are a “tenancy in common in the life estate with cross-contingent remainders in the fee simple.” ORS 93.180(2).

When the grantees are identified as trustees or personal representatives, the law presumes a joint tenancy unless expressly declared otherwise. ORS 93.180(1)(c). Joint-tenancy in Oregon is reserved only for trustees, personal representatives, and executors. ORS 93.190.

The law presumes a tenancy in common, despite use of words such as joint tenants, joint tenancy, or similar language, if the conveyance or devise does not contain any other expression or indication of intent to create a right of survivorship. ORS 93.180(3).

If grantees or devisees are spouses, the law presumes a tenancy by the entirety unless the conveyance or devise “clearly and expressly declares otherwise.” ORS 93.180(1)(b). The statutory language presumes a tenancy by the entirety if the conveyance or devise is to spouses married to each other. ORS 93.180(1)(b). This presumption applies to all spouses, whether “husband and wife” or persons of the same sex who are married to each other.

Oregon is not a community property state.

Oregon recognizes life estates. A life estate is alienable; however, the grantee receives only the grantor’s life estate. ORS 93.150. When the measuring life ends, the grantee’s interest in the property ends. The same cotenant rules that apply to fee-simple cotenants apply when the life estate is held by two or more persons.

With respect to homesteads, ORS 18.395 provides that “a homestead shall be exempt from sale on execution, from the lien of every judgment and from liability in any form for the debts of the owner to the amount in value of $40,000, except as otherwise provided by law. The exemption shall be effective without the necessity of a claim thereof by the judgment debtor. When two or more members of a household are debtors whose interests in the homestead are subject to sale on execution, the lien of a judgment or liability in any form, their combined exemptions . . . shall not exceed $50,000 …”.

A court may decline to allow all or part of a claimed homestead exemption if the proceeding is based on a judgment for child support. ORS 18.398(2). In addition, the homestead exemption does not apply “to construction liens for work, labor or material done or furnished exclusively for the improvement of the homestead property, to purchase money liens, to mortgages lawfully executed, or to the enforcement of a seller’s rights under a land sale contract…”. ORS 18.406.

Oregon Real Estate Taxes

Under Oregon law, real estate taxes become delinquent if not paid in full by May 15 of the tax year. The tax year is July 1 through June 30. Taxes can be paid with a discount on November 15.

Otherwise, taxes are paid in three equal installments - on November 15, February 15, and May 15.

If taxes become delinquent, they are subject to foreclosure by the county tax collector on the third (3rd) anniversary of such delinquency.

Foreclosure in Oregon

Non-judicial Foreclosure:

Non-judicial foreclosure (foreclosure by publication and sale) is available in Oregon and may be completed, absent complications, in as few as 120 days, although 180 days is a more typical timeframe. If contested, a non-judicial foreclosure can take over one year. There is no redemption period following a non-judicial foreclosure, but the borrower has until five (5) days prior to the foreclosure sale to reinstate the loan.

The timeline is generally as follows for deeds of trust: First, a notice of default must be recorded in the county where the property is located and the borrower and/or occupant of the property must be served with a copy of the notice at least 120 days before the scheduled foreclosure sale date. Second, a copy of the notice must be published once a week for four (4) successive weeks, with the last notice being published at least twenty (20) days prior to the foreclosure sale. The borrower may cure the default at any time prior to five (5) days before the sale by paying all past due amounts, plus costs. The sale must be at auction to the highest bidder for cash. Any person, except the trustee, may bid at the sale, which must take place between 9:00 am and 4:00 pm at the location stated in the notice of record. The sale may be postponed for up to 180 days from the original sale date by the trustee or the trustee’s attorney or agent.

Judicial Foreclosure:

Judicial foreclosure is available in Oregon and can take as little as 90 days (if uncontested and a default judgment is obtained) to more than eighteen (18) months to complete. Deficiency judgments are available as part of a judicial foreclosure. For the mortgagor, there is a 180-day redemption period following judicial sale and this redemption period may not be waived. For junior lienors, there is a 60-day redemption period following judicial sale. Unlike non-judicial foreclosure, there is no right to reinstate the loan once the judicial foreclosure has been filed.