Up to 500,000 US Homeowners Possibly Facing Foreclosure in 2021…Understanding the foreclosure process in Oklahoma is an important part of navigating your situation if you are facing your own home foreclosure.
Before we dive in…
What is foreclosure anyway?
Foreclosure is the legal process that lenders use to take back the property securing a loan, typically after the borrower has fallen behind and stops making their payments.
Foreclosure is definitely no fun. But just know that it’s not the end of the world, and thousands of homeowners go through it every year.
When you have a better understanding of how foreclosure in Oklahoma works… it will better prepare you with the knowledge to be able to make sure you navigate it well and come out the other end as well as possible can be.
The Basic Stages of A Foreclosure in Oklahoma
There’s a few key stages that are important to any Oklahoma 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 at least 3-6 months of missed payments have elapsed. Usually (but not always), the financial institution will send out many late notices that you are in “arrears” – overdue or behind in your payments.
Under Judicial Foreclosure:
- 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 sometimes known as a sheriffs sale.
- 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):
- 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 for 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.
What Happens After A Foreclosure Auction?
After a foreclosure is complete, the loan amount is paid off with the sale proceeds.
Many times, when 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 judgement is where the bank gets a judgement 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 that lists the state by state deficiency judgement laws, since every state is different.
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 Oklahoma Cash Home Buyer to help you negotiate discounts off the amount owed to avoid having to carry out a foreclosure. We deal with banks all the time, and know the process.
Sometimes, experienced investors like us 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 Tulsa, we can help you by making you a cash offer today, and close fast before a foreclosure goes to court.
We buy houses in Tulsa and throughout Okalahoma all the time from people who need to sell fast.
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Other Foreclosure Resources For Tulsa Oklahoma HomeOwners: