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  • Resources Oregon Home Equity Theft Laws
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  • Appendix: The Data

Oregon

How It Works

Oregon counties place tax liens on delinquent properties and may seek judicial foreclosure after three years of nonpayment. Owners have two years after foreclosure to redeem these properties. After the redemption period expires, the county may keep a property or sell it. The counties retain any windfall profits.

The Impact

Homeowners caught up in this process lose, on average, 93% of their equity. For the 146 homes in our dataset, homeowners lost a total of $28 million.

Why It Matters

In Oregon:

  • 75% of homes were forcibly seized for tax debts less than the price of a 10-year-old Ford F-150.
  • On average, homeowners lost $237,000 in savings beyond the debt owed—or four years’ worth of income.
  • Governments were able to keep $11 million more than what was owed to them.

When Brande Johnson passed away in December 2007, her five- or six-year-old daughter, Tarresa, inherited a 50% interest in a plot of land in Deschutes County, Oregon.

Over the next several years, no one paid the property tax bills. Most children are not aware of such obligations and do not have the means to pay them. Tarresa, barely a teenager, ended up owing the county $2,101.43 by 2012, when Deschutes County filed for tax foreclosure over the delinquent debt. After the redemption period ended on October 2, 2014, the county received a tax deed for Tarresa’s property.1

In May 2019, the county sold the property at auction for $89,000. Tarresa’s bill for delinquent taxes and fees had grown to $4,172.54 by then. The county collected $84,827.46 more than the tax debt from selling the property. However, rather than returning this surplus amount to the owners after subtracting its selling expenses, Deschutes County used the windfall to fund public projects.2

Oregon law allows counties to seize real estate for unpaid taxes, sell it, and keep all the proceeds—no matter how small the owner’s tax liability. Property owners can lose a lifetime of equity savings over a very small debt.

Oregon allows this home equity theft even though the Fifth Amendment of the U.S. Constitution prohibits it. While the government reserves the right to collect what citizens owe in property taxes, it should never keep more than what is due. Deschutes County should not have pocketed a profit. It should have returned the excess proceeds from selling the estate to Tarresa and the other owner after settling their debts.

Unfortunately, Tarresa is not alone in her plight. From 2014 through 2021, Oregon’s local governments seized and sold 146 homes in counties where 64% of the state’s population resides. On average, homeowners lost 93% of their homes’ value—a loss of $236,000.
 
While it is indisputable that property taxes must be paid, nobody deserves to lose all the equity in their property over a significantly smaller tax debt. Oregon’s lawmakers must act now to end the unethical and immoral practice of home equity theft in the state.

1 Complaint, Tarresa Hutchinson and Timothy Waterman v. Baker County et al., Circuit Court of the State of Oregon for Deschutes County, June 23, 2020.

2 Complaint, Tarresa Hutchinson and Timothy Waterman v. Baker County et al., Circuit Court of the State of Oregon for Deschutes County, June 23, 2020.

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