Understanding the foreclosure process in Norman, OK is an important part of navigating your own home foreclosure.
Before we dive in…
Understanding the Foreclosure Process in Norman, Oklahoma
What is foreclosure anyway?
Foreclosure is the legal process that lenders use to take back property securing a loan, generally, after the borrower stops making payments.
Foreclosure is no fun. But just know that it’s not the end of the world.
When you know how foreclosure in Oklahoma works… it arms you with the knowledge to make sure you navigate it well and come out the other end as well as possible.
The Basic Stages of A Foreclosure
There are a few stages that are important to any foreclosure process.
Foreclosure works differently in different states around the country.
The two ways different states use to foreclose upon a property are: judicial sale or power of sale.
In either scenario, foreclosure typically doesn’t go to court until 3-6 months of missed payments have elapsed. Usually (but not always), a lender will send out many notices that you are in arrears – overdue or behind in your payment.
Under Judicial Foreclosure: Oklahoma is a Judicial Foreclosure State
- Your mortgage lender must file suit in the court system.
- You’ll get a letter from the court demanding payment.
- Assuming the loan is valid, you’ll have 30 days to bring payment to court to avoid foreclosure (and sometimes that can be extended).
- If you don’t pay during the payment period, a judgment will be entered and the lender can request the sale of your property – usually through an auction.
- Once the property is sold, the sheriff serves an eviction notice and forces you to immediately vacate the property.
Under Power of Sale (or Non-Judicial Foreclosure): Rare in Oklahoma
- The mortgage lender serves you with papers demanding payment, and the courts are not required – although the process may be subject to judicial review.
- After the established waiting period has elapsed, a deed of trust is drawn up and control of your property is transferred to a trustee.
- The trustee can then sell your property to the lender at a public auction (notice must be given).
Anyone who has an interest in the property must be notified during either type of foreclosure.
For example, any contractors or banks with liens against a foreclosed property are entitled to collect from the proceedings of an auction.
Reinstating the Mortgage Loan Before the Foreclosure Sale in Oklahoma
“Reinstating” is when the borrower brings the loan current by paying the missed payments of principal and interest, plus fees and costs. Completing a reinstatement will stop the foreclosure.
Right to Reinstate in a Judicial Foreclosure
Oklahoma law doesn’t give a borrower the right to reinstate in a judicial foreclosure. But 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 lender might allow you to do so anyway.
Right to Reinstate in a Nonjudicial 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. But not more than four times in 24 months if the property is a homestead, otherwise three times. (Okla. Stat. tit. 46, § 44).
Also, many mortgages have a provision that permits the borrower to reinstate for a limited amount of time.
What Happens After A Foreclosure Auction?
After a foreclosure is complete, the loan amount is paid off with the sale proceeds.
Sometimes, if the sale of the property at auction isn’t enough to pay off the loan, a deficiency judgment can be issued against the borrower.
A deficiency judgment is where the bank gets a judgment against you, the borrower, for the remaining funds owed to the bank on the loan amount after the foreclosure sale.
Some states limit the amount owed in a deficiency judgment to the fair value of the property at the time of sale, while other states will allow the full loan amount to be assessed against the borrower.
Here’s a great resource for Oklahoma deficiency judgment laws,
Generally, it’s best to avoid a foreclosure auction. Instead, call up the bank, or work with a reputable real estate firm like us at Metro Cash Offer to help you negotiate discounts off the amount owed to avoid having to carry out a foreclosure.
Experienced investors can help you by negotiating directly with banks to lower the amount you owe in a sale – or even eliminate it, even if your home is worth less than you owe.
If you need to sell a property near Norman, OK or across the state of Oklahoma, we can help you.
We buy houses in Norman, OK like yours from people who need to sell fast.
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Another Foreclosure Resource For Oklahoma HomeOwners: