- December 01, 1989
- All Oregon Agents
- Purchase Money Mortgages/Deficiency Judgments
The Oregon Supreme Court has ruled that the statute which precludes a purchase money mortgagee from seeking a deficiency judgment after foreclosure does not bar recovery from a guarantor of the underlying debt. Sumner v. Enercon Development Company , 307 Or. 579, 771 P.2d 619 (1989).
ORS 88.070 provides that a purchase money mortgagee "shall not be entitled to a deficiency judgment on account of the mortgage or note or obligation secured by the same". It also defines a deficiency judgment as "a personal judgment against a mortgagor for the mortgage debt remaining unsatisfied out of the proceeds of the sale of the mortgaged property".
The supreme court held that this statute does not protect a guarantor of the underlying debt from a judgment by the mortgagee in the event that the debt is not satisfied by a sale of the property.
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