Detailed Answer
Quick overview: When a property in Oregon sells at a foreclosure sale for more than the outstanding debts and costs, the extra money (the surplus) does not automatically go to someone who says they are entitled to it. You must prove you have a legal right to the funds and ask the court to award them to you. If the owner died before or after the sale, the surplus usually belongs to the owner’s estate and you will need to establish your status as an heir or personal representative before the court will release the money.
1. Confirm there is a surplus and who holds it
First, make sure a surplus exists. Obtain the trustee’s or sheriff’s sale record and the sale accounting from the trustee, the foreclosing entity, or the county recorder’s office. For nonjudicial trust deed foreclosures, look at the trustee’s deed recorded after the sale. The foreclosure statutes and procedures are in ORS chapter 86; you can review that chapter here: ORS chapter 86.
2. Determine who is likely entitled
Common categories of potential claimants:
- The deceased owner’s estate (if the owner died and the estate is open or must be opened).
- Named heirs or beneficiaries who can prove they inherit under the decedent’s will or under intestacy rules.
- Junior lienholders (mortgage or judgment creditors) that weren’t paid in full by the sale.
If your mom died and her estate was not administered before the sale, the surplus most likely belongs to her estate—not directly to a child—until a court recognizes the heirs or personal representative.
3. Decide whether you need probate or a small‑estate process
If the owner died, you will usually need to either open a probate case or use Oregon’s procedures for small estates (if eligible) to establish authority to collect estate assets. The Oregon Judicial Department explains probate procedures and forms; see their probate information here: OJD Probate & Estate Administration.
4. Where to file a motion or petition
If the foreclosure was judicial, you will file a motion in that court case. If the foreclosure was nonjudicial (trustee’s sale), you typically file a petition in the Circuit Court for the county where the property was located asking the court to determine the right to any surplus proceeds and to order payment to the rightful claimant (often the personal representative or heirs). Court filing and local practice vary by county, so contact the clerk of circuit court in the property’s county for specific filing location and local rules.
5. What to include in your motion/petition
Typical contents:
- A clear caption (court name and county) and a short title (e.g., Petition to Determine Right to Surplus Proceeds).
- A statement of facts: when the owner died (if applicable), property address, date of foreclosure sale, amount of sale, amount of debts and costs paid, and the amount of surplus you claim exists.
- The legal basis for your claim (heir, beneficiary, personal representative, lienholder), with citations to any authority (e.g., that you are the decedent’s child and the estate has not been administered).
- Evidence and attachments: death certificate, will (if any), letters testamentary or letters of administration (if already issued), recorded trustee’s deed or sheriff’s deed, sale accounting showing surplus, title search or mortgage payoff statements, and any correspondence with the trustee.
- A proposed order for the judge and a proposed distribution plan (for example, pay surplus to the personal representative to be distributed through probate).
- Affidavits verifying your statements and a declaration of service showing who you served and how.
6. Service and notice requirements
Oregon courts require that interested parties receive notice. Serve the trustee or foreclosing party, any junior lienholders listed in the sale record, and known heirs or interested persons. Check local rules for methods and timing of service. If you are unsure of all interested parties, the court may require notice by publication in some cases.
7. Court hearing and possible outcomes
The court will schedule a hearing. At the hearing the judge will decide who has the legal right to the surplus. Typical outcomes:
- The court awards surplus to the estate’s personal representative, who must then distribute it under probate rules.
- The court finds a junior lienholder has a valid claim and orders distribution to that creditor.
- The court dismisses the claim if the filer lacks standing or the statute of limitations has run.
8. Timing and statute of limitations
Act quickly. Deadlines apply to asserting claims after foreclosure sales, and rights relating to estate assets can be time‑limited. If you wait too long you may lose the right to pursue the funds. Because timing and deadlines vary with the facts, consult the court clerk or an attorney as soon as possible.
9. If you cannot locate probate or title documents
Order certified copies from the county clerk or recorder (trustee’s deed, recorded notices). Get a certified death certificate. If you need proof of heirship and there is no will or probate, the court may require a sworn heirship affidavit or a formal probate proceeding.
10. Consider getting legal help
Filing a petition to determine rights to surplus proceeds often involves probate and property law issues. If possible, consult a licensed Oregon attorney or a legal aid organization. If funds are substantial, an attorney can help ensure correct procedures, timely service, and proper presentation to the court.