|
If you do not FULLY understand the foreclosure process outlined on this page and how it may apply to you please take advantage of our FREE consultation by clicking here.
Judicial foreclosure available: Yes
Non-Judicial foreclosure available: Yes
In Oklahoma both judicial and non-judicial foreclosures
are available. The judicial sales are governed by the age-old principles of
common-law equity, and some statutes. The non-judicial sales are governed by
the Oklahoma Power of Sale Mortgage Foreclosure Act, which was passed in
1986. However, the lender who chooses the non-judicial route will
effectively give up the right to sue for a deficiency if the foreclosure
involves homestead property. Moreover, a borrower may force the lender into
judicial foreclosure if the property involved is a homestead by recording and
then mailing a written notice to the lender 10 days before the foreclosure sale
claiming the property as homestead. At that point, only judicial foreclosure
may be used. This right is not available on other types of property.
Judicial Foreclosure
Mortgages on real estate can be foreclosed by filing a
lawsuit under principles of equity in the District Court of the county where
the land is located. If there has been a default by the borrower in meeting the
requirements of the loan, such as not paying the payments, then the court will
order a foreclosure sale. The price may be determined through a special
appraisal procedure. Unless the borrower waives the right to an appraisal in
the mortgage, the property must be appraised before it can be sold at
foreclosure. At the foreclosure sale, the property may not be sold for less
than two-thirds of the appraised value.
Judicial Execution Sale
Advertising
The impending foreclosure sale must be advertised at
least 30 days in advance of the sale.
Non-judicial Foreclosure
Mortgages that can be foreclosed out of court must
include the following statement, in bold and underlined type:
A power of sale has been granted
in this mortgage.
A power of sale may allow the
mortgagee (lender) to take the mortgaged property and sell it without going to
court in a foreclosure action upon default by the mortgagor
under this
mortgage.
A written notice of intention to foreclose by power of
sale must be sent by certified mail to the borrower at the borrower's last
known address. The notice shall describe the defaults of the borrower under the
loan, and give the borrower 35 days from the date the notice is sent to cure
the problem. If the borrower comes up with the missed payments during the 35
days, then the foreclosure can be stopped. It cannot be accelerated. However,
if there have been three defaults, then the lender need not send another notice
of intent to foreclose, and if the borrower has been in default four times in
the past 24 months, and has been notified as above, then no further notice will
be required to accelerate.
Preliminary Notices
Contents
The notice must describe in detail the nature of the
borrower's default on the loan.
Time
The lender's notice informs the borrower that if the
house is the borrower's homestead, then the borrower has ten days to elect
judicial foreclosure or else face out-of-court foreclosure under a power of
sale clause.
Advertising
The notice must be published once a day for four
consecutive weeks, but the first date must be not less than 30 days before
sale.
Recording
The notice, plus an affidavit confirming the validity of
the trustee's procedures, must be recorded within ten days after the borrower
has gone through the 35-day notice period.
Service
The borrower must be served with the papers advising the
buyer of the default. They should be served in the same manner as for court.
These papers should not only be served, but the wise lender will preserve proof
of receipt, return of service or an affidavit in lieu of personal service,
along with proof of publication. All of these affidavits and a copy of the
notice must be recorded.
Sale Procedures
Time and Place
The time and place of the sale must be specified in the
notice of foreclosure.
Manner
The property will be sold at public auction to the
highest bidder. If a purchaser at a foreclosure sale other than the borrower
fails to post cash or certified funds equal to 10 percent of the bid amount,
then the lender may proceed with the sale and accept the next highest bid.
Redemption
Once the court confirms a foreclosure sale there can be
no redemption. There is no right of redemption on power of sale foreclosures
either, although the borrower has the right to redeem until the foreclosure
sale.
Deficiency
A lender may sue judicially to obtain a deficiency
judgment. Also, under the Oklahoma Power of Sale Mortgage Foreclosure Act, any
action for a deficiency must be commenced within 90 days after the date of
sale. In such event the lender shall establish that the fair market value of
the property on the date of the foreclosure sale exceeded the foreclosure sale
price. If it did, then the higher figure must be credited against the balance
due on the loan. If the house is the borrower's homestead, and the borrower
elects judicial foreclosure, the borrower may be hit with a deficiency suit. On
the other hand, if the borrower does nothing, then the lender cannot sue for a
deficiency. |
