Oklahoma Foreclosure Laws and Procedures

Learn about Oklahoma's foreclosure laws and how the Oklahoma foreclosure process works.

By , Attorney (University of Denver Sturm College of Law)

Before the foreclosure crisis, federal and state laws regulating mortgage servicers and foreclosure procedures were relatively limited and tended to favor foreclosing lenders. However, many federal and state laws now give protections to borrowers. Servicers generally must provide borrowers with loss mitigation opportunities, account for each foreclosure step, and carefully comply with foreclosure laws.

Also, most people who take out a loan to buy a residential property in Oklahoma sign a promissory note and mortgage. These documents usually give homeowners certain contractual rights after a home loan default.

So, don't get caught off guard if you're a homeowner behind in mortgage payments. Learn about foreclosure laws in Oklahoma and how the Oklahoma foreclosure process works, from missing your first payment to a foreclosure sale.

What Are My Rights During Foreclosure in Oklahoma?

In an Oklahoma foreclosure, you'll most likely get the right to:

  • apply for loss mitigation
  • convert a nonjudicial foreclosure into a judicial one
  • get notice of the foreclosure
  • receive special protections if you're in the military
  • pay off the loan to prevent a foreclosure sale
  • redeem the property for a short time after the sale, and
  • get any excess money after a foreclosure sale.

Once you understand the Oklahoma foreclosure process and your rights, you can make the most of your situation and, hopefully, work out a way to save your home or at least get through the process with as little anxiety as possible.

What Is Preforeclosure?

The period after you fall behind in payments, but before a foreclosure officially starts, is generally called the "preforeclosure" stage. (Sometimes, people refer to the period before a foreclosure sale happens as "preforeclosure," too.)

During the preforeclosure period, the servicer can charge you various fees. Also, in most cases, federal law requires the servicer to let you know how to avoid foreclosure, and most mortgage contracts require the servicer to send you a breach letter.

When Can Foreclosure Start in Oklahoma?

Under federal law, the servicer usually can't officially begin a foreclosure until you're more than 120 days past due on payments, subject to a few exceptions. (12 C.F.R. § 1024.41). This 120-day period provides most homeowners ample opportunity to submit a loss mitigation application to the servicer.

How Does the Foreclosure Process Work in Oklahoma?

In Oklahoma, most homeowners who stop making mortgage payments will face a judicial foreclosure. However, the lender can avoid litigation and foreclose nonjudicially under certain circumstances.

If the lender 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 to the foreclosure.

Converting a Nonjudicial Foreclosure Into a Judicial Foreclosure in Oklahoma

In Oklahoma, a foreclosure can happen 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 foreclosure sale. Also, the lender can't use this process to foreclose a lien for an extension of credit primarily for agricultural purposes. (Okla. Stat. tit. 46, § 41).

To convert a nonjudicial foreclosure into a judicial process, you must:

  • notify the foreclosing party by certified mail that the property to be sold is your homestead and that you elect judicial foreclosure, and
  • record a copy of the notice, which contains a legal description of the property, in the county clerk's office. (Okla. Stat. tit. 46, § 43).

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, consult a lawyer to ensure you complete all steps correctly.

If you don't convert the nonjudicial proceeding to a judicial foreclosure, different laws and procedures will apply than the ones discussed in this article. Talk to a lawyer for more information about nonjudicial foreclosure procedures in Oklahoma and get information relevant to your particular situation.

How Judicial Foreclosures Work in Oklahoma

A judicial foreclosure begins when the lender files a lawsuit asking a court for an order allowing a foreclosure sale. The lender gives notice of the suit by serving you a summons and complaint. You get 20 days to respond. If you don't respond to the suit, the lender will ask the court for, and probably receive, a default judgment, allowing it to hold a foreclosure sale.

But if you choose to defend the foreclosure lawsuit, the case will go through the litigation process. The lender might then ask the court to grant summary judgment. A summary judgment motion asks that the court grant judgment in favor of the lender because there's no dispute about the critical aspects of the case. If the court grants summary judgment for the lender—or you lose at trial—the judge will enter a judgment.

After the court issues a foreclosure judgment, the lender must serve you a notice of sale by mail and publish a notice of sale in a newspaper at least 30 days before the sale. (Okla. Stat. tit. 12, § 764). At the sale, the lender usually makes a credit bid. The lender can bid up to the total amount owed, including fees and costs, or it may bid less. In some states, including Oklahoma, when the lender is the high bidder at the sale but bids less than the total debt, it can get a deficiency judgment against the borrower, subject to some limitations (see below).

The property becomes "Real Estate Owned" (REO) if the lender is the highest bidder. But if a bidder, say a third party, is the highest bidder and offers more than you owe, and the sale results in excess proceeds—that is, money over and above what's needed to pay off all the liens on your property—you're entitled to that surplus money.

How Long Do You Have to Move Out After Foreclosure in Oklahoma?

If you, the foreclosed homeowner, 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 a writ of assistance, and the sheriff will remove you from the property.

What Are the Options Available for Borrowers During Foreclosure in Oklahoma?

A few potential ways to stop a foreclosure and keep your home include reinstating the loan, redeeming the property before the sale (or for a short period after the sale), or filing for bankruptcy. Working out a loss mitigation option, like a loan modification, will also stop a foreclosure.

Or you might be able to work out a short sale or deed in lieu of foreclosure and avoid foreclosure. (But you'll have to give up your home with a short sale or deed in lieu of foreclosure transaction.)

Reinstating the Loan

Oklahoma law doesn't give the borrower the right to reinstate the loan.

But your loan paperwork might allow for reinstatement. Check your mortgage to see if you get the right to complete a reinstatement. If not, the lender might agree to let you reinstate your loan.

What Is the Right of Redemption for Foreclosure in Oklahoma?

One way to stop a foreclosure is by "redeeming" the property. To redeem, you have to pay off the full amount of the loan before the foreclosure sale.

Some states also provide foreclosed borrowers a redemption period after the foreclosure sale, during which they can buy back the home. The court must confirm (approve) the sale as part of an Oklahoma judicial foreclosure. You can redeem the property up until confirmation happens. (Okla. Stat. tit. 42, § 18 to § 20).

Filing for Bankruptcy

If you're facing a foreclosure, filing for bankruptcy might help. In fact, if a foreclosure sale is scheduled to occur in the next day or so, the best way to stop the sale immediately is by filing for bankruptcy.

Once you file for bankruptcy, something called an "automatic stay" happens. The stay functions as an injunction prohibiting the lender from foreclosing on your home or trying to collect its debt, at least temporarily.

In many cases, filing for Chapter 7 bankruptcy can delay the foreclosure by a matter of months. Or, if you want to save your home, filing for Chapter 13 bankruptcy might be the answer. To find out the options available, speak with a local bankruptcy attorney.

Foreclosure Protections and Military Servicemembers

The federal Servicemembers Civil Relief Act provides legal protections to military personnel facing foreclosure.

Also, Oklahoma state law extends the federal Servicemembers Civil Relief Act protections to members of state military forces under some circumstances. (Okla. Stat. tit. 44, § 208.1).

Are Deficiency Judgments Allowed in Oklahoma?

In a foreclosure, the borrower's total mortgage debt sometimes exceeds the foreclosure sale price. The difference between the total debt and the sale price is called a "deficiency." For example, say the total debt owed is $400,000, but the home sells for $350,000 at the foreclosure sale. The deficiency is $50,000.

In some states, the lender can seek a personal judgment against the debtor to recover the deficiency. Generally, once the lender gets a deficiency judgment, the lender may collect this amount—in our example, $50,000—from the borrower.

Oklahoma law permits deficiency judgments subject to some limitations.

Oklahoma Deficiency Judgment Laws

In Oklahoma, the lender may request a deficiency judgment simultaneously when making a motion for an order confirming the sale or within 90 days following the sale. The maximum amount allowed for a deficiency judgment is the lesser of:

  • the difference between the total debt and the fair market value of the property, or
  • the difference between the total debt and the foreclosure sale price. (Okla. Stat. tit. 12, § 686).

What Are the Potential Consequences of Foreclosure?

A foreclosure could result in serious consequences, like lower credit scores, a deficiency judgment (as discussed above), or tax consequences.

More Foreclosure Information

For more information on federal mortgage servicing laws and foreclosure relief options, go to the Consumer Financial Protection Bureau (CFPB) website.

Read More Articles

Get tips on what to do—and what not to do—if you're facing a foreclosure.

Find out if foreclosures are on the rise.

Getting Help

If you have questions about Oklahoma's foreclosure process or want to learn about potential defenses to a foreclosure and possibly fight the foreclosure in court, consider talking to a foreclosure attorney. Talking to a HUD-approved housing counselor about different loss mitigation options is also a good idea.

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