If you’re behind on your mortgage payments and you live in Oklahoma, you might be wondering what happens during a foreclosure in your state. In most cases, the foreclosing bank files a lawsuit in court. This process is called a "judicial foreclosure." The bank may avoid litigation by foreclosing nonjudicially—although this rarely happens. And if the bank chooses a nonjudicial foreclosure, you can force it to go through the courts instead.
In this article, you’ll learn about Oklahoma foreclosure procedures and get information about your rights under federal and state law, as well as learn how to covert a nonjudicial foreclosure into a judicial one.
This preforeclosure period is an excellent time to submit an application to your servicer asking for an alternative to foreclosure. You might be able to stay in your home by working out a repayment plan or modification, for example, or give it up without going through a foreclosure in a short sale or deed in lieu of foreclosure.
Federal law also provides some other protections to homeowners facing a foreclosure.
Again, foreclosures in Oklahoma are typically judicial. The bank could instead choose to foreclose outside of the court system (nonjudicially) if the mortgage contract includes a provision known as a power of sale clause. But this doesn’t happen very often.
If the bank does choose to use a nonjudicial process, you can compel the bank to foreclose judicially. You must take the following steps at least ten days before the date of the foreclosure sale:
Oklahoma law requires the following notices in a foreclosure.
In a judicial foreclosure, the bank officially starts the action by filing a lawsuit in court. You'll get a summons and a complaint notifying you about the suit. If you fail to respond to the suit or don't have any valid defenses, the court will grant judgment in favor of the bank. After the judge issues a judgment of foreclosure, the property will be sold to satisfy the mortgage debt.
The bank must mail a notice of sale to the borrower at least ten days before the sale date, as well as publish the notice of sale for two consecutive weeks in a newspaper. (Okla. Stat. tit. 12, § 764).
In a nonjudicial foreclosure, the bank has to deliver two notices to the borrower: a notice of intention to foreclose and a notice of sale.
Notice of intention. Before it can start a nonjudicial foreclosure, the bank must mail a notice of intention to foreclose to the borrower. The notice must give 35 days from the date the notice is sent to cure the default by paying past-due amounts. However, the bank doesn't have to send this notice if you've defaulted on the mortgage more than four times in 24 months and it previously sent such notices. (Okla. Stat. tit. 46, § 44).
Notice of sale. If the borrower doesn’t cure the default, the bank must personally serve a notice of sale on the borrower at least 30 days before the sale date. The notice must also be published in a newspaper at least once a week for four consecutive weeks and recorded in the county clerk’s office. (Okla. Stat. tit. 46, § 45).
“Reinstating” is when you catch up on the defaulted mortgage's missed payments, plus fees and costs, to stop a foreclosure. In a nonjudicial foreclosure, the borrower has the right to cure any default and reinstate the mortgage for 35 days from the date the notice of intention to foreclose is sent, as discussed above. (Okla. Stat. tit. 46, § 44). Also, most mortgages contain a provision that permits the borrower to reinstate for a certain amount of time.
Although Oklahoma law doesn’t give a borrower the right to reinstate in a judicial foreclosure, again, most mortgages allow the borrower to bring the loan current by a particular deadline. Check your mortgage for details. And, if you don't otherwise have a right to reinstate, your bank might allow you to do so anyway.
Some states allow the borrower to redeem the home within a specific period after a foreclosure.
As part of the foreclosure process, the court must confirm (approve) the sale after it takes place. The borrower can redeem the home up until the court confirms the sale. (Okla. Stat. tit. 42 §§ 18 to 20).
The borrower has the right to redeem the property up to the completion of the sale. (Okla. Stat. tit. 46, §§ 43, 45, 47). (To get details on redemption rights in Oklahoma, see Nolo’s article If I lose my home to foreclosure in Oklahoma, can I get it back?)
When the total mortgage debt exceeds the foreclosure sale price, the difference is called a deficiency. Some states allow the bank to seek a personal judgment—called a deficiency judgment—against the borrower for this amount. Other states prohibit deficiency judgments with anti-deficiency laws.
In a judicial foreclosure, the bank can request a deficiency judgment at the same time it makes a motion for an order confirming the foreclosure sale or within 90 days after the foreclosure sale. (Okla. Stat. tit. 12, § 686).
With a nonjudicial foreclosure, the bank generally can get a deficiency judgment by filing a lawsuit for the deficiency within 90 days after the foreclosure sale. But the bank cannot get a deficiency judgment if, at least ten days before the foreclosure sale, the borrower sends written notice to the foreclosing party by certified mail saying that:
With both types of foreclosure, the court can limit the amount of the deficiency judgment to:
If the foreclosed homeowners don’t leave the home after a judicial foreclosure, the court may (in the order confirming the sale) order the clerk of the court to issue of a writ of assistance to the sheriff to give the purchaser possession of the home. In a nonjudicial foreclosure, the purchaser may seek a writ of assistance by application to a court. (Okla. Stat. tit. 12, § 686, Okla. Stat. tit. 46, § 43).
If you want to learn more about the foreclosure process in Oklahoma or want to find out if you have any potential defenses to a foreclosure, consider talking to a lawyer.
It’s also a good idea to make an appointment to speak to a HUD-approved housing counselor, especially if you want to learn about different alternatives to foreclosure.