In Oklahoma, most homeowners who stop making their mortgage payments will face a judicial foreclosure. However, under certain circumstances, the foreclosing party—the bank—can choose to avoid the litigation process and foreclose nonjudicially. If the bank opts for a nonjudicial foreclosure, you can force it to go through the courts instead. Converting a nonjudicial foreclosure to a judicial one is generally a good idea, especially if you have a defense that might allow you to keep the house.
In this article, you’ll get details about how Oklahoma foreclosures work, as well as learn about both federal and state laws that protect homeowners during the process. Because most foreclosures in Oklahoma are judicial, this article focuses on that process. Though, you'll also get some information about nonjudicial foreclosures as well. (To learn what to do, and what not do, if you’re facing a foreclosure, see Foreclosure Do’s and Don’ts.)
Federal law usually prevents the servicer from initiating a foreclosure until the borrower is more than 120 days delinquent on the loan. (To learn more about the federal law that delays the beginning of a foreclosure for 120 days, see How Soon Can Foreclosure Begin?)
Also under federal law, servicers are supposed to work with borrowers who are having trouble making monthly payments in a “loss mitigation” process. (“Loss mitigation” is what the mortgage servicing industry calls the process of working with the borrower to avoid a foreclosure.) (To learn more about federal mortgage servicing laws, see Federal Laws That Protect Homeowners During Foreclosure.)
After the bank files a lawsuit to start a judicial foreclosure, you get 20 days to respond. If you don’t answer the suit, the bank will get a default judgment allowing it to hold a foreclosure sale. (To learn generally what happens if you do file an answer to the suit, see Fighting Your Foreclosure in Court.)
After the court issues a foreclosure judgment, the bank must serve you a notice of sale by mail and publish notice of sale in a newspaper at least 30 days before the sale. (Okla. Stat. tit. 12, § 764).
In Oklahoma, a foreclosure can take place without court supervision if the mortgage contract includes a provision known as a "power of sale" clause. But, you can force the lender to foreclose judicially by taking specific steps at least ten days before the date of the foreclosure sale. You must:
If the mortgage contract doesn't contain a power of sale clause, or if you complete the steps described above, the lender must file a lawsuit to foreclose. If you want to convert a nonjudicial foreclosure into a judicial one, you should consult with a lawyer to make sure you complete all steps properly.
Although Oklahoma law doesn't give the homeowner the right to reinstate in a judicial foreclosure, the terms of the mortgage usually allow for it. If you want to do so, check your loan documents.
In some states, the borrower can redeem (repurchase) the property within a specified time period after the foreclosure sale.
As part of an Oklahoma foreclosure, the court must confirm (approve) the sale as part of a judicial foreclosure. You can redeem the property up until confirmation happens. (Okla. Stat. tit. 42, § 18, Okla. Stat. tit. 46, § 43(B)).
In Oklahoma, the bank may request a deficiency judgment simultaneously when making a motion for an order confirming the sale or within 90 days following the sale. The deficiency judgment is limited by the market value of the property on the date of sale. (Okla. Stat. tit. 12, § 686).
(If you let a nonjudicial foreclosure proceed and give timely notice at least ten days before the sale that the property is your homestead and that you elect against a deficiency judgment, then the bank can't get a deficiency judgment.) (Okla. Stat. tit. 46, § 43).
You can find Oklahoma’s foreclosure laws in the Oklahoma Statutes, Title 12 §§ 686, 764 through 765, 773 and Title 46 §§ 41 through 49. Statutes change, so checking them is always a good idea. (To learn how to look up foreclosure laws, see How to Find the Foreclosure Laws in Your State.)
How courts and agencies interpret and apply the law can also change. And some rules can even vary within a state. These are just some of the reasons to consider consulting a lawyer if you’re facing a foreclosure.
If you're facing a judicial or nonjudicial foreclosure in Oklahoma and want to learn more about the process, including your rights and whether you have any defenses to the foreclosure, consider talking to a foreclosure attorney. To get information about loss mitigation options, speak to a HUD-approved housing counselor.