In Oklahoma how do I respond to a Notice of Default so I can stop foreclosure?
Full Question:
Answer:
Oklahoma is primarily a non-judicial foreclosure state which a lender does not have to go to court to obtain title to the property (for default on a mortgage loan). This in turn means that the foreclosure can proceed more quickly.
Most home loans in non-judicial foreclosure states involve two crucial documents at the tiem of purchase or re-finance: a promissory note and a deed of trust. The deed of trust turns the promissory note into a debt secured by a lien (legal claim) on your home. The deed of trust authorizes the lender to foreclose on the property if you default.
An Oklahoma homeowner may request a judicial foreclosure however. The judicial sales are governed by the age-old principles of common-law equity, and some statutes. The non-judicial sales are governed by the Oklahoma Power of Sale Mortgage Foreclosure Act, which was passed in 1986. However, the lender who chooses the non-judicial route will effectively give up the right to sue for a deficiency if the foreclosure involves homestead property. Moreover, a borrower may force the lender into judicial foreclosure if the property involved is a homestead by recording and then mailing a written notice to the lender 10 days before the foreclosure sale claiming the property as homestead. At that point, only judicial foreclosure may be used. This right is not available on other types of property.
The first official step in the process is the sending of a Notice of Default. The notice will spell out how the lender believes you have defaulted on the agreement to lend you the money for the property. If you fail to "cure" the default which usually means "pay all the money that is past due", then the lender can proceed with a court action.
If you believe there were violations of the Federal Truth in Lending Act when the loan was initiated, you may be able to raise this as a defense. It may also be possible to renegotiate the loan.
It would be recommended that you consult with local counsel who can review the specific facts involved.
