Q: My husband is on disability. We are behind on property Taxes. The county is starting foreclosure. How can we stop this?

A: Dear asker,

As an attorney and member of the Oregon state bar who you have not hired I need to make you aware that the below information is the general thoughts I have on the topic without having met with your or reviewed any documents, etc. It is not specific advice and I am not your attorney and you are not entitled to rely on my advice, blame me if your situation doesn't work out or rely on my malpractice insurance to protect you.

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you have a tough situation, but it could be made far worse if you end up dealing with any unscrupulous investors. (they are all unscrupulous). Don't make any agreements with investors without calling an attorney no matter how nice they are or how much you believe you understand the documents and situation. Definitely do not transfer your interest in the home to anyone else in exchange for money to keep the property out of foreclosure without first talking to an attorney.

If you do not pay and the foreclosure process starts you have two years to "redeem" the property out of foreclosure. At that point you may have to pay the entire property tax arrears to get it out of foreclosure. I haven't reviewed the statute in a while but I think that is likely. Therefore it may be to your advantage to figure out how to pay the 1 year and keep paying a year each time to keep it out of foreclosure instead of getting into a situation where you have to pay it all off.

A chapter 13 would allow you to pay off the 13K over 5 years, but that doesn't sound any more doable than paying 4K now. Please understand that the only way an investor will ultimately be paid is by liquidating your home.

Probably the best resolution for you would be to find a friend or family member you trust and have them loan you the money to pay the property taxes and then give them a promissory note and trust deed that makes their loan secured by your property. Hopefully they would give you a lower interest rate than an investor. They would get paid whenever your property was sold or refinanced.

There may be scenarios where an investor could get you out of foreclosure and lease the property back to you for a long term, but they are going to be seeing this as an opportunity to pick up your home for the privilege of letting you live in it.

But....upon reflection this could be similar to a reverse mortgage scenario. If your husband is old enough to qualify for a reverse mortgage you could certainly look into that.

If not, a possible scenario could be that an investor loans you 15K, at 17% interest and then, rather than making payments to the investor they become entitled to 15K of the equity in your home and then they are entitled to an interest payment each month on the 15K principal. Their loan is secured by your home but is only payable upon you and your husband passing or the sale or refinance of the home. If the interest charges ultimately ate up all the equity in your home then you would have to start making payments to the lender or pay off the 15K principle or the home would be sold to pay the investor. At any time you paid off the 15K principle you would be out of the loan. This is a typical type of "hard money" style loan except normally the debtor is making an interest-only payment for 5 years and then paying off the principal once the 5 year term is up (or getting foreclosed by the lender because they can't pay off the original loan amount). Here you would not be making payment, but, rather the payments would be taken out of the equity in the house with payment being deferred until the house is sold or refinanced. I don't know if any investor would be interested in something like that. I would start by calling Janel Page with Clockwork properties. She is one of the few investors I actually trust.

Before you do that I would call Dina Schmidt with Umpqua bank and Mandi Stephens with Willamette Valley Bank. Tell them I sent you.