 Oklahoma Loan Modification Guidelines
When you develop a definite plan of action with well-timed, well-informed
steps, you can stop the foreclosure process and save your home. We have
outlined the foreclosure process for the state of Oklahoma.
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.
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