If you miss enough payments on your home, your lender can sell the house on your behalf in order to cover your debts. This process is known as foreclosure, and it usually works in one of two ways, depending on your state.Lenders can foreclose via the court system in some states (called judicial foreclosure), and in other states they can use specific procedures outside of the courts (called nonjudicial foreclosure). The state of Oklahoma is unique in that its laws provide for both judicial and nonjudicial foreclosures. What does that mean for homeowners in Oklahoma? Here's an overview of the details.
Generally speaking, nonjudicial foreclosure is handled entirely outside of the courtroom. The process is used when your mortgage or deed of trust includes a clause called the “power of sale” clause. The clause provides your authorization, as the borrower and homeowner, for the sale of your property in case you should default on the home loan. That means if you miss payments, the lender or their representative has the power to sell your home to cover the debt.
About the Power of Sale Clause
Your power of sale clause may specify a certain time, place, and terms for the sale of your property. If it does, your nonjudicial foreclosure will follow those procedures. Without specific terms, the foreclosure will follow a specific process outlined by Oklahoma law. The process involves a set of rules, including the following:
- The lender must give you written notice of their intention to foreclose by power of sale.
- The notice must describe the defaults on your loan (or information about the missed payments).
- Once the notice is sent, you'll have 35 days to correct the problem and make payments.
- If you “cure” the default and make your payments, the foreclosure will stop.
You and the lender must also observe certain rules about the filing process, the number of defaults before a notice is not required the sale of your house at public auction, and others. Make sure you completely understand the details of your foreclosure under Oklahoma law.
If there is no “power of sale” clause in your mortgage or deed of trust, the lenders must file a lawsuit to receive a court order of foreclosure. In this situation, you can expect to be served with a complaint and summons. You'll have the chance to formally respond within a certain time frame. If you don't respond at all, or if you can't provide a valid defense for your case, the court will rule in favor of the lender and allow the foreclosure. The lender will be required to notify you at least ten days before the home is put up for auction.
Forcing the Judicial Process
In some cases, your contract will have a power of sale clause but you may prefer to go through the court process anyway. You can force a judicial foreclosure by taking certain steps at least ten days before the foreclosure sale is scheduled to take place. You'll first need to mail a notice to the lender (the foreclosing party) to let them know that the home is your primary residence, and that you are electing judicial foreclosure. You'll then record a copy of that same notice in the county clerk's office.
When you're facing the prospect of foreclosure, you should only take action with knowledgeable and experienced legal counsel at your side. At the Law Offices of B. David Sisson, we have years of experience in defending homeowners against foreclosure. Contact us for a skilled and strategic approach to foreclosure law in Oklahoma.