By David Koen

The Oregon Court of Appeals has decided that a borrower who has actual notice that her property is being sold at a trustee’s sale under the Oregon Trust Deed Act (OTDA) is not barred from later challenging the sale on the grounds that the entity that executed the sale was neither a validly appointed successor trustee nor the agent of a trustee. Wolf v. GMAC Mortgage, LLC, 276 Or App 541, 543 (2016).

The court rejected GMAC’s argument that “the legislative history [of the OTDA] emphasizes certainty and finality in foreclosure proceedings as the major public policy consideration and that allowing post-sale challenges like Wolf’s challenge here ‘would gut the purpose of the OTDA.’” Id. at 548. Rather, the court reaffirmed its holding in Staffordshire Investments, Inc. v. Cal-Western, 209 Or App 528, 542, 149, P3d 150 (2006), rev den, 342 Or 727 (2007), that “‘there is nothing * * * in the Act, to indicate that the legislature intended the auction to be final in the absence of legal authority to sell the property.’ . . . (emphasis in original).”

The Court of Appeals found unpersuasive Mikityuk v. Northwest Trustee Services, Inc., 952 F Supp2d 958, 962-70 (D Or 2013), which “predicted that the Oregon appellate courts would conclude that a borrower who received pre-sale notice of a trustee’s sale cannot mount a post-sale challenge to the validity of the sale.” 276 Or App at 549 n4. Mikityuk had been cited favorably no fewer than 19 times by courts including the U.S. Ninth Circuit Court of Appeals, Angels Alliance Grp., LLC v. ReconTrust Co., NA, 617 Fed Appx 740, 742 (2015), and the U.S. District Court for the District of Oregon, e.g., Hayes v. Wells Fargo Bank, N.A., 2015 US Dist LEXIS 130075, at *4-5 (Aug 26, 2015) (pro se plaintiff). The Court of Appeals decision also contrasts with that of the Multnomah County Circuit Court in Offenbacher-Afolau v. ReconTrust, Case No 1202-02429, at 2 (Jan. 16, 2013) (pro se plaintiff; “As Defendants assert in their briefing, plaintiff is statutorily barred under [former] ORS 86.770 [(renumbered as ORS 86.797)] from challenging a completed foreclosure sale of which she had no notice.”).

David Koen is a staff attorney with  Legal Aid Services of Oregon and represents homeowners and tenants under the Legal Aid Foreclosure Help program.