Foreclosures

Foreclosures In Tulsa, OK

A foreclosure is a legal process initiated by a lender to seek ownership and control of the real property to mitigate losses under a defaulted loan. The goal of the lender is to seize the real property from the borrower’s ownership. The property will then be sold by the lender with the proceeds used to satisfy the mortgage.

This article will give a brief overview of the foreclosure process. The process can be technical, and each State has different technicalities. However, the basic premise of a foreclosure action is constant.

The Foreclosure Stages

The first step is a foreclosure process is the filing of a Notice of Default on behalf of the lender. This is a public notice filed in the County records where the real property is located. The purpose of this notice is to advise the defaulting borrower of the impending foreclosure and to give notice to the public of a pending claim against the property.

If the defaulted loan is not brought current within the time period specified by the jurisdiction or in the loan documents and the legal process is complete, then a foreclosure sale date is set. The defaulting borrower will receive a Notice of Sale. This notice is also recorded in the County records and published in the local newspaper.

This public sale typically occurs at the County courthouse steps. The property is sold to the highest bidder. This is an all-cash sale with a cash deposit required immediately at the close of the sale. The remainder of the bid price needs to be paid within 24 hours of the deposit.

The highest bidder becomes the owner of the property by virtue of a trustee’s deed given by the lender. The property will be free and clear of the mortgage. Should there be a deficiency, meaning the bid price did not fully satisfy the mortgage, then the defaulting borrower remains liable for the shortfall until the lender is made whole.

The Auction

The opening bid is established by the lender. This bid covers the remaining principal balance of the mortgage, plus accrued interest, fees and costs. If there are no bids higher than the opening bid, then the lender becomes the highest bidder and obtains ownership of the property.

This situation is what is known as an “REO,” or Real Estate Owned by a lender resulting from a foreclosure sale. Often, lenders obtain REOs because the opening bid is more than the market value of the property.

As stated above, properties purchased at a foreclosure auction will be free and clear of all liens and mortgages. These liens are “wiped clean” from the title, with the exception of any unpaid property taxes.

This article is a very general overview of the foreclosure process. The process will vary from State to State, as will the terminology, but the concept is the same.

A foreclosure is a legal process a lender must undergo to gain title to the property securing the loan. It is the proceeds from the sale of the property that will mitigate the losses experienced by the lender from the defaulted loan.

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