Oklahoma Foreclosure Laws
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Oklahoma is generally referred to as a title theory state wherein the property’s title stays in security until the payment of the loan on the property is taken care off in full. Following this theory, foreclosures are a non-judicial option. A mortgage is the document that keeps the title of the property secure. Mortgages, in accordance to Oklahoma law, are permitted to act as liens on property and can be used to pursue judicial foreclosures through courts.
The provision of a power of sale within a mortgage speeds up the foreclosure process and is thereby the main process used to foreclose quickly. In the absence of power of sale language in the mortgage, judicial foreclosures are generally followed and this brings into effect some rights for redemption.
A non-judicial foreclosure is the most commonly used process followed to foreclose on a property in Oklahoma. In this process, no court-action is needed, but a notice of intention to foreclose through power of sale is required. For selling a property to take care of the loan that has been defaulted on, an attorney, on the mortgagees’ behalf, can use the power of sale clause which is typically inserted in the trust deed at the initial signing period.
An attorney is designated to act as the lender’s representative and bring about the sale which characteristically takes place as an auction. This being a non-judicial process, some very strict requirements for notices are in place, and a power of sale clause has to be present in the legal loan documents for this process to be followed.
A written notice containing the intent to foreclose through power of sale must be sent to the borrower by the lender before starting foreclosure proceedings. The mortgage can be reinstated if the borrower, within a period of thirty five days after getting the notice, fixes the default. In cases where borrowers have defaulted thrice within the last twenty four months, no rights to further notices are required. In cases of homestead properties, if borrowers have defaulted in excess of four times within the last twenty four months, no further notices are required to speed up the process. A generally circulated newspaper has to be used to publish the notice of sale within the county where the property is situated. The notice has to be published for a minimum of four successive weeks, and must be published a minimum of thirty days prior to the scheduled sale.
The borrower needs to be served personally with the notice of sale at least thirty days before the sale date. Within the passing of ten days of the thirty five day notice-period for curing the default, the notice of sale has to be recorded.
The foreclosure sale takes place at a public-auction as per the place, time and date mentioned in the notice of sale. The sale takes place between 09:00am and 08:00pm. The mortgagees’ representative then auctions the property and it goes to the highest bid placer. If the notice of default’s original receiver gets a minimum of a ten day notice in writing, the sale can be postponed. At least 10% of what has been the winning bid needs to be posted by the party who has made the bid; else, the property can be sold to the party with the next highest bid.
Lenders in Oklahoma can also opt for a judicial foreclosure process through a court, and it is the court that makes the final decision on the foreclosure. The property then sells at a publicly notified sale. A complaint, along with a lis pendens (a legal document that is used to provide notice to the public about the property in foreclosure) needs to be filed in court.
In commercial transactions, the document is referred to as a security agreement, and it is otherwise referred to as a mortgage. At times, they are both merged together. The filing of a mortgage can be made to verify the debt in question and its payment terms which are part of the note.
It generally takes around 90 days to bring into effect a foreclosure that is not contested; this does depend on the time the various notices require. If the process is contested in court by the borrower, and if a delay or an adjournment of the sale is sought; or if bankruptcy is filed for, the process can be stalled.
No statutory right of redemption post sale exists in Oklahoma for non-judicial foreclosures where a foreclosed property can be reclaimed.
If a property is sold for lesser than the amount which the said loan secures at the public-sale, the lender can obtain a deficiency judgment. Post the sale of the foreclosure property, ninety days are available for deficiency actions to be brought about. The deficiency judgment cannot be in excess of the difference involving the property’s fair market value and the debt amount. The fees and costs incurred for the deficiency’s filing can be recovered too.
Foreclosures in Oklahoma are governed by laws that are part of Title 46 Oklahoma Statutes (Oklahoma Power of sale Mortgage Foreclosure Act) Chapter 2A §43.
