Being behind on your mortgage payments and at risk of losing your home is one of the most stressful and overwhelming feelings a person can experience. For someone in this situation, a foreclosure defense attorney can help protect your home.
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 is regulated by state law and therefore the procedural aspects of 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. Here in Oklahoma, both judicial and non-judicial are allowed.
By federal law, your lender has to wait until you are over 120 days delinquent before filing a lawsuit in court as part of a judicial foreclosure. In some cases, your lender may be able to foreclose without needing to file a lawsuit as part of a non-judicial foreclosure. Continue reading to find out more about judicial and non-judicial foreclosures.
The judicial process, 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. There 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.
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 a clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of the property to pay off the balance on a loan in the event of 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 process are outlined below under Power-of-Sale Foreclosure Guidelines.
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 process 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.
How Can I Stop Foreclosure
Don’t wait because the faster you take action the better your chances are of being able to keep your home. Your attorney can help your determine if filing for Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, or a Loan Modification is your best course of action to prevent or stop a foreclosure.
Contact The Gooding Law Firm in Oklahoma City. We will respond immediately and will show you why we are the best foreclosure defense lawyers in the business. Call us today at 405-948-1978 or toll-free 1-866-296-9179.