Lincoln Loan Co. v. Estate of George Geppert

Under ORS 88.120(c), foreclosure of a mortgage is allowed if no lien or right of a third party has attached to the property after the expiration of the 10-year period.

Lincoln Loan prevailed in a previous action which foreclosed one of four mortgages, and property was sold at a sheriff’s sale. Alston purchased the property and recorded the certificate of sale, and after a period allowed for redemption, recorded the sheriff's deed. Lincoln Loan assigned error to the trial court’s finding that after the ORS 88.110 period to enforce both mortgages ran, but before Lincoln Loan commenced the action, Alston’s rights attached because he was the purchaser at sheriff’s sale, thus, the ORS 88.110 exception was negated. Lincoln Loan argued that Alston’s interest in the property under the sheriff’s certificate of sale was “inchoate and defeasible.” Under ORS 88.120(c), foreclosure of a mortgage is allowed if no lien or right of a third party has attached to the property after the expiration of the 10-year period. The Court held that the rights of a third party attached to the property for purposes of 88.120(c) if a property was purchased and recorded after a sheriff’s sale, even if the sheriff’s deed had not yet been recorded. Although title did not transfer until the end of the redemption period, Alston’s third party rights acquired on purchase included the right of possession, rent, and a lien on crops and attached to the property, which made 88.120(c) moot, and effectively banned foreclosure. Affirmed.