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ENB-12.06 - Foreclosure Administrative Rules

FORECLOSURE ADMINISTRATIVE RULES
Administrative Rule Adopted by Auditor's Office Pursuant to Rulemaking Authority
ARB-ENB-12.06
 
Section 1.0 - Purpose
 
The City of Portland provides a wide range of services to property owners, and recovers the costs of such services through special assessments. There are a variety of special assessments such as: sewer, street improvement, sidewalk repairs, nuisance abatement, demolition, civil penalties and code violations. The City of Portland secures these special assessments by placing liens against the property.
 
According to provisions set forth by City Code, the collection process of the special assessments is the responsibility of the City Auditor’s Office.
 
With the introduction of new assessment programs the Auditor’s Office has seen a dramatic increase in the number of delinquent assessments.
 
To curtail this increasing delinquency problem, the Auditor’s Office proposed an aggressive collection process with the reintroduction of the sale of assessed properties (Foreclosure) as a tool to collect delinquent assessments.
 
This collection process begins with a systematic and progressive collection approach to newly delinquent accounts, and terminates with foreclosure on severely delinquent accounts.
 
The actual collection process will be complete as accounts fall into 121 to 150 days of delinquency. At this point, there will be a revision of the file for completeness to ensure that all steps in the collection process have been followed. Individual files will be forwarded to Foreclosure staff and automatic billing of accounts will continue. The account is now placed into foreclosure.
 
These rules implement Portland City Code Chapter 5.30.

 
Section 1.1 – Notification of Collection
 
1. Foreclosure Manager advises property owner to contact the City Auditor’s Office. The notification will emphasize the gravity of the situation and the ramifications of inaction.
 
2. The notice specifies that the property will be placed on the foreclosure list unless the property owner elects to pay the delinquent lien under the payment plan or brings the account current.
 
3. If there is no response from property owner within 7 to10 days, Foreclosure Manager will attempt to communicate with property owner by phone.

 
Section 1.2 – Case File
 
1. An individual case file will be developed by the Auditor’s Office for each delinquent lien. The file will contain documented information related to each step taken by the Auditor’s Office to solve the delinquency.
 
2. Case file will include log notes describing attempts made by the City to contact property owner, copies of correspondences, number of billing statements mailed out and a brief summary of the lien’s chronological history.
 
3. The Foreclosure Manager will review each file taking into consideration the individual circumstance and may evaluate individual delinquent open liens to develop recommendations on revising the payment amount of the lien and the payment terms.
 
4. The recommendations will be submitted to the Collections Committee.

 
Section 1.3 – Collections Committee
 
1. The Collections Committee is a four member body consisting of a representative from two members of the City Council, one representative from the Bureau of Development Services and one representative from the Bureau of Management and Finance.
 
2. The Collections Committee determination shall be based upon the factors listed in Subsection 5.30.060 D of Portland City Code.
 
3. The Collections Committee makes written recommendation accepting, revising or rejecting the Auditor’s recommendations on adjusting the delinquent open lien payment amount and terms.
 
4. The Collections Committee determination shall be based upon the factors listed in Subsection 5.30.060.D.
 
5. The Collections Committee submits its final determination to the Auditor’s Office.

 
Section 1.4 – Notification of Collections Committee final determination
 
1. The Auditor’s Office will notify the property owner in writing of the Collections Committee’s determination.
 
2. If the property owner accepts the Collection Committee’s determination, the property owner will pay the amount owed in full or will sign a payment agreement containing the payment amount and terms.
 
3. If the property owner rejects the Collections Committee’s determination, the property owner may appeal the determination on adjusting the delinquent open lien amount and payment terms to the Code Hearings Officer as provided for in Chapter 22.10.
 
4. If the property owner has previously appealed the lien or the related code violation to the Code Hearings Office, there shall be no right of appeal.
 

 
Section 1.5 – Payment Agreements to repay delinquent liens
 
1. There are 2 types of payment agreements devised to assist property owners in need of financial assistance to repay their delinquent liens. The Catch-up Payment Plan and the Hardship Payment Plan.
 
2. The Catch-up Payment Program allows the property owner to bring a delinquent lien current or pay in full by the end of an established period not to exceed 36 months as defined in PCC 5.30.070.
 
3. Hardship Payment Program allows the property owner to pay interest and billing charges only for a period not to exceed 12 months as defined in PCC 5.30.080.

 
Section 1.6 – Delinquent Payment Agreement
 
1. As Catch-up/Hardship Payment Plan Agreements become over 60 days delinquent, the Auditor’s Office will notify the property owner of Payment Plan Agreement cancellation/termination. There will be a Delinquent Catch-up/Hardship Payment Plan Agreement Collection Charge of $25.00. The Collection charge can be waived at the discretion of the Foreclosure Manager once a year up to 3 times. The Collection charge is subject to change.
 
2. The notification will specify that if payment is not made within 14 days of the date of the notification the Payment Plan Agreement will be cancelled/terminated and the property included in the foreclosure list to be submitted to council in accordance with City Code 5.30.

 
Section 1.7 – Cancelled Payment Agreement
 
1. If a Catch-up/Hardship Payment Plan Agreement has been cancelled/terminated as a result of failure, refusal, or neglect to make timely payments, as provided in the agreement, and the property owner requests to have the payment plan reinstated, there will be a one time reinstatement opportunity. The reinstatement is subject to a $25.00 charge payable through cash, check or money order at the time of the request for reinstatement. After the payment agreement has been in default for two consecutive times there will be no more opportunity for reinstatement.

 
Section 1.8 – Deferral of Special Assessments
 
1. Oregon homeowners 62 or older may defer payments on certain special assessments against their property. Special Assessments include paved streets, sidewalks, and sewer.

 
Section 1.9 – Appeal to Hearings Officer
 
1. The Auditor’s Office will notify the property owner in writing of the Collections Committee’s determination within three business days and provide a copy of the "APPEALS PROCESS OUTLINE" in conjunction with the form "APPEAL TO THE CITY OF PORTLAND HEARINGS OFFICER".
 
2. Hearings Officer makes final determination related to the amount and terms of payment.
 
3. If property owner accepts the Hearings Officer determination, the property owner will pay the amount owed in full or will sign a payment agreement containing the payment amount and terms.
 
4. If the property owner rejects the Hearings Officer determination the delinquent lien will be included in the Foreclosure List.

 
Section 2.0 – Preparation of Foreclosure List
 
1. The Auditor shall be responsible for preparing the proposed foreclosure list and prioritizing which delinquent liens to include on the proposed foreclosure list in accordance with Subsection 5.30.100.B.
 
2. The current property owner has been determined.
 
3. The Auditor submits the proposed foreclosure list to the Council for Council action 95 days prior to sale.
 
4. Auditor makes recommendation to Council of properties to be purchased by the City to implement City policies and programs.

 
Section 2.1 – Council Determination on Foreclosure List.
 
1. The Council shall decide which properties to include on the foreclosure list and which properties the City should purchase. Council shall act by ordinance.
 
2. The Council Clerk shall transmit the final foreclosure list to the Auditor.
 
3. After the list is submitted to the Auditor, the only payment option is to pay the account in full.

 
Section 2.2 – Foreclosure Sale – Auditor’s Procedures.
 
1. The Auditor shall prepare rules governing the conduct of the sale. The rules shall be available at least 60 days prior to the sale.
 
2. Each property shall be sold separately. The sales price shall be the amount owing on the principal, interest, penalties, collection costs and sales costs.
 
3. The interest charged during the redemption period shall be set by ordinance. The interest rate shall be set at a level, which attracts bidders.
 
4. The penalty charged during the redemption period shall be set by ordinance at a rate that encourages payment by delinquent property owners.
 
5. In instances where there are two or more bids, the successful bidder shall be determined by lot.
 
6. Property, which is not sold, may again be offered for sale in accordance with City Code 5.30.
 
7. In the event there is more than one bidder and the successful bidder fails to pay, the property shall be sold to the other bidder or in the event there were more than two bidders, the successful bidder shall be determined by lot.

 
Section 2.3 – Foreclosure Sale – Treasury Procedures.
 
1. 90 Days prior to sale - The City Treasurer or designee shall record a notice of foreclosure sale for each property listed on the foreclosure list in the County records. (In accordance with 5.30.130.A)
 
60 Days prior to sale - The City Treasurer or designee to notify property owners by registered or certified mail of foreclosure sale date. This notification (letter) will specify the name of the property owner, the assessed value of the property (in accordance with County’s assessed value), principal amount of the lien, accrued interest, penalty, collection costs, publication costs, legal description of the property, property address, and the date, time and place of sale. Notice will also be sent to all persons with an interest or lien of record and anyone who has requested notice.
The City Treasurer or designee, to begin preparation of publication notice to newspapers.
 
50 Days prior to sale - Publication notice sent to Attorney’s Office for review.
 
45 Days prior to sale - Publication notice sent to newspapers. Order publication to begin 40 days prior to sale.
 
40 Days prior to sale - First newspaper publication. Post copy of newspaper ad in City Hall bulletin board, County Courthouse and Multnomah County Bulletin Board.
 
Mail by registered or certified mail a copy of the first of the four published newspaper notices to property owner and occupant of the property.
 
Post a copy of the lien foreclosure sale notice on each of the properties being foreclosed.
 
32 Days prior to sale - Second newspaper publication.
 
24 Days prior to sale - Third newspaper publication.
 
16 Days prior to sale - Fourth and last newspaper publication.
 
1 Day prior to sale - Last day when delinquent lien may be removed from the foreclosure list by paying in full the amount of the delinquent lien with penalties, interest, collection costs and sales cost incurred to date. Rules for conduct of Foreclosure Sale prepared for distribution at sale.
 
DAY OF SALE - Sale to be held in City Chambers at 10:00 a.m. Each purchaser to be issued a receipt and a Certificate of Sale at the time of sale.
 
5 Days after the sale - Notice to property owner by registered or certified mail advising of sale, purchaser, purchase price, and terms of redemption. (In accordance with 5.30.190.B)
 
11 Months after sale - If certificate of redemption has not been redeemed, owner is notified by registered or certified mail that in 30 days a deed will be delivered to the purchaser of the Certificate.
 
Contact Attorney’s Office to prepare Deed and have it ready for delivery by the end of the redemption period.
 
12 Months after sale - Deed prepared, recorded, and delivered to purchaser.

 
Section 2.4 – Rules for Conduct of Foreclosure Sale.
 
The City Treasurer or designee will conduct the sale in accordance with provisions of State Law, City Charter, City Code and these rules.
 
A City representative calling for bids at the announced foreclosure sale price; open to the public will conduct the lien foreclosure sale. The sale will begin at 10:00 a.m. on __________, 200X in the City Council Chambers at 1221 SW 4th Avenue, 2nd Floor. Each property will be sold separately.
 
Prior to the sale any person with a recorded interest in the property will be permitted to remove the property from the sale by tendering to the City the full amount of the City lien(s), including interest to date, penalties, collection costs and sales costs. The only acceptable form of payment shall be United States legal currency or cashier’s check.
 
When the sale commences, the purchase price for each property shall be for the full amount of the unpaid lien, plus interest, penalties, collection costs and foreclosure costs. Where there is more than one acceptable bid for any particular property, the successful bidder will be determined by a drawing of random lots.
 
Any questions or inquiries regarding purchasing the property at the sale may be directed to the Foreclosure Manager, at City Hall, 1221 SW Fourth Avenue, room 140, Portland, Oregon 97204, phone (503) 823-2037.
 
All sales at foreclosure shall be final. Full payment shall be made to the "City of Portland, Oregon" at the time of sale. All payments shall be made by United States legal currency or cashier’s check and are subject to the cashier’s check clearing.
 
Following the foreclosure sale each purchaser will receive a receipt and a Certificate of Sale to the property on which the purchaser has successfully bid. These documents do not give the purchaser ownership rights or possessory interest in the property prior to the completion of the redemption period. Portland City Code Chapter 5.30 governs redemption. Copies of the City Code are available by contacting the Portland City Auditor’s Office at 1221 SW 4th Ave. Room 140 – Portland, Oregon 97204-1987 to obtain a hard copy. The Portland City Code may be viewed in electronic format on the City of Portland’s website: www.portlandonline.com/auditor .
 
If the legal owner or other interested party has not redeemed the property within the redemption period specified under Portland City Code 5.30.020 the City will issue a Deed conveying the foreclosed property upon presentation of the Certificate of Sale to the City Treasurer or designee. The Deed will be conveyed in accordance with Portland City Code 5.30.220. The Deed conveys legal and equitable title in fee simple excepting only the liens of the City or of other persons or entities, which were not included in the foreclosure sale or other liens as provided by state law. The City makes no representations regarding the title to the property, or as to the property’s condition. No warranties of as to title or lack of encumbrances are given, express or implied. The City bears no responsibilities or liabilities for damage or waste to the property or to any structures or fixtures during the redemption period. The purchaser assumes all risk of such damage or waste. Any improvements to, or maintenance of, the property by the purchaser during the redemption period must occur under a contractual agreement with the owner. The contract must specifically state the amount owing and the rate of interest, if any. In the event the property becomes a public nuisance during the redemption period; the City may enforce any applicable nuisance abatement regulations. Nuisance abatement may result in additional assessments against the property, which may become the liability of the purchaser. Upon presentation of the Certificate of Sale and delivery of the Deed to the holder of the Certificate of Sale, the holder will be entitled to immediate possession.
 
HISTORY
Filed for inclusion in PPD September 30, 2004.