What to Expect During a Mortgage Foreclosure in Oklahoma
By: David W. Wulfers
The following describes the steps taken in an Oklahoma judicial mortgage foreclosure case after a mortgagee obtains a judgment foreclosing its first in priority mortgage against a debtor on that mortgage.
1. Writ of special execution. This document refers to an order to the sheriff to levy upon real estate where a judgment foreclosing a mortgage in real property has been granted. This document is prepared by counsel for the mortgagee, issued by the court clerk and delivered to the sheriff. The sheriff must return the writ within 60 days from the date issued as shown on the writ.
2. Oath of appraisers and appraisal form. After receiving the writ, the sheriff will appoint three (3) disinterested persons who will take an oath to impartially appraise the property. The three (3) appraisers return a form of the appraisal to the sheriff. The written oath and form of appraisal are prepared by counsel for the mortgagee.
3. Notice of Sale. Written notice of the sale containing certain information and prepared by counsel for mortgagee must be mailed to all the parties in the suit and anyone else known to be claiming a lien or interest in the property and whose interest is sought to be extinguished. If a claimant’s address is not known, the notice must also be published in a newspaper publishing in the county where the suit is filed by the publication for two (2) successive weeks. The date of sale must be at least ten (10) days after the date of mailing and not less than 30 days after the date of the first publication. In Tulsa County, sheriff sales in the past have been conducted on Tuesday mornings at the courthouse. We have in the past set a date on a Tuesday which is approximately 45 days after the date of first publication. An affidavit of proof of mailing and publication must be prepared by counsel for the mortgagee and filed in the case.
4. Sale. The successful bidder at the sale must bid at least 2/3s of the value of the property which is the subject of the foreclosure case, as determined by the three (3) appraisers. Counsel for mortgagee can use up to the value of mortgagee’s judgment as a credit against mortgagee’s bid. Third-party successful bidders must bid higher than mortgagee’s bid or judgment, and if they are awarded the property, they must post cash or certified funds equal to 10% of the amount bid for the property within 24 hours of the sale, and otherwise complete the sale.
5. Return of execution. After the sale, the sheriff returns the execution, together with a report of what occurred at the sale and the documents he received during the course of the execution. Counsel for mortgagee prepares this return.
6. Confirmation. After the sheriff returns the execution and documents, counsel for mortgagee prepares and files a motion to confirm the sheriff’s sale. Counsel for mortgagee also prepares and mails a notice, containing certain information including the date of the confirmation hearing, to everyone referred to in item 3 above and the successful bidder at the sale, and also must publish this notice once, if done so as part of item 3 above. The mailing and date of publication must be at least 10 days before the date of the hearing. An affidavit of proof of mailing and publication regarding this notice is prepared and filed in the case. If the court finds the sale complied with the law, the court will confirm the sale and order the sheriff to execute a deed to the successful bidder at the sale. If money was paid by the successful bidder at the sale to purchase the property, the parties in the lawsuit will seek to recover their share, based upon their lien priority as determined by the court.
7. Deficiency. At the time of filing the motion to confirm the sale or within 90 days after the sale, any party whose debt remains unsatisfied may file a motion for deficiency against the debtor(s). The motion and a notice of the hearing on the motion are to be served on the debtors. The service should be by personal delivery or as the court may otherwise direct. At the hearing the court will determine, upon evidence, the fair and reasonable market value of the property as of the date of sale or the nearest earlier date when there was market value. The deficiency judgment will be for an amount equal to the sum of the amount owing by the debtors as determined by the judgment (principal, interest, fees, costs), plus amounts owing on all prior liens and encumbrances with interest, less the market value as determined by the court or the sale price of the property, whichever is higher. The right to seek the deficiency judgment is lost if not made within the time described in this paragraph.
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