Foreclosure is the legal process by which a lender forces the sale of real property in order to be repaid the money it has loaned the buyer of the real property.
The process of foreclosure is regulated by state law and therefore the procedural aspects of foreclosure will vary from state-to-state. Some states require “judicial foreclosure” while other states allow “non-judicial foreclosure” and there are even states that allow both methods of foreclosure.
Here in Oklahoma, both judicial and non-judicial foreclosures are allowed.
Non-Judicial Foreclosure
If a mortgage or deed of trust contains a “power-of-sale clause,” the lender may foreclose without having to file a lawsuit. A power-of-sale clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default.
In deeds of trust or mortgages where a power-of-sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the “Power-of-Sale Foreclosure Guidelines”.
Judicial Foreclosure
The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no “power-of-sale” clause is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.
However, 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.
A lender may sue to obtain a deficiency judgment, but the action must be taken within ninety (90) days after the date of sale. There can be no redemption once the court confirms the foreclosure sale.
Power-of-Sale Foreclosure Guidelines
If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:
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 must describe the defaults of the borrower under the loan, and give the borrower thirty five (35) days from the date the notice is sent to cure the problem. If the borrower cures the default within the thirty five (35) days, then the foreclosure can be stopped. However, if there have been three (3) defaults, then the lender need not send another notice of intent to foreclose, and if the borrower has been in default four (4) times in the past twenty four (24) months, and has been notified as above, then no further notice will be required.
- The notice must be recorded in the county where the property is located within ten (10) days after the borrower has gone through the thirty five (35) day notice period.
- The notice must appear in a newspaper in the county where the property is located once a week for four (4) consecutive weeks, with the first publishing being not less than thirty (30) days before the sale.
- Said notice must state the names of the borrower and lender, describe the property (including the street address) and state the time and place of sale.
- The property must be sold at public auction to the highest bidder at the time and on the date specified in the notice. If the highest bidder at the sale is anyone other than the borrower, they must post cash or certified funds equal to ten (10) percent of the bid amount. If the highest bidder is unable to do so, then the lender may proceed with the sale and accept the next highest bid.
If you’re facing home foreclosure in Oklahoma and would like to know more about how bankruptcy may be able to help you, contact me today to schedule a FREE initial consultation. Just fill out the Contact Dan form on the far right side of the page and click the Submit button and I’ll get back with you right away. Or just pick up the phone and call me at 918-615-8260. I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.
{ 2 comments… read them below or add one }
I have been getting further behind on my mortgage for two years. At first we could not make the regular payments and would pay about two out of three payments. I was put into a “modification” program. I would send in the information they requested and I assume they lost it because they would ask for the same information three months later. They then switched me from an “in house modification” to a “government modification”. Every time I called to find out what I needed to do I would get transferred about five or six times. It would take over an hour on the phone and I would end up with someone saying they were going to send me a packaged to fill out and send to them.
I was told at end of 2010 I should not make any payments until the modification went through. Last month I was told this was not true; I should continue to make what payments I can. He told me he was assigned as my “customer relationship manager” and he would be handling my account. He said I would get a package to fill out and return. Today I got a letter saying there is a new “customer relationship manager”.
I feel as if they don’t have there stuff together and we are so far behind that forclosure will eventually happen. I do not know if there is anything I can do. I do not know anything about bankruptcy, but I would like to know where I stand and if a lawyer can help.
Thank you,
Bill
Bill,
I will email you today regarding scheduling an initial consultation so that we can discuss your situation in more detail and then I can advise you on available bankruptcy options.
Dan Nunley