Multnomah County has agreed to pay millions to settle a class action lawsuit that accused it and other Oregon counties of keeping money from former owners, heirs or valid lienholders who were entitled to a portion of proceeds from sales on their foreclosed homes.
The lawsuit, filed in 2023, sought to compel Oregon counties to compensate homeowners for the “surplus funds” they were owed after their properties were foreclosed on. Surplus funds include any money remaining after all unpaid taxes, fees and other costs have been covered.
All told, Multnomah County will shell out $3.5 million, which includes all surplus proceeds collected since 2017, plus interest, into a settlement fund to pay former owners and others entitled to those dollars within the county.
This settlement will not apply to other Oregon counties named in the lawsuit, which include Lane and Yamhill counties, records show. The legal action against those counties remains ongoing.
Three Oregon homeowners first filed the lawsuit in October 2023 after the U.S. Supreme Court ruled that counties could not collect the total proceeds in sales of foreclosed homes.
Martin Lynch, the lead filer in the case, sued on behalf of his deceased wife, who had accrued nearly $32,000 in unpaid taxes on her Springfield home. Lane County foreclosed on the property and sold the home for around $118,500 — nearly $87,000 more than what Lynch’s wife owed in taxes.
Multnomah County spokesperson Julie Sullivan-Springhetti said the county was following existing Oregon law at the time when it kept the surplus funds. The county agreed to the settlement July 25, and budgeted for the expense in its 2025 budget, Sullivan-Springhetti said.
The settlement is awaiting court approval. Notices will be sent to those who are potentially entitled to funds.
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