If you go through a judicial foreclosure in Oklahoma, but the proceeds from the foreclosure sale don't cover the amount you owe the bank on your mortgage loan, the bank can come after you for the deficiency. However, the bank must seek a deficiency judgment within a limited amount of time.
In a nonjudicial foreclosure, the bank can generally get a deficiency judgment. But it can't get one if the property is your homestead and you send the foreclosing bank a specific notice. And even if the bank has the right to a deficiency judgment, it must do so within a limited time.
What Is a Deficiency Judgment?
If a property sells at a foreclosure sale for less than the full outstanding mortgage debt, the difference is commonly called a "deficiency balance." Some states allow a foreclosing bank to get a deficiency judgment (a personal judgment) against the borrower for the amount of the deficiency balance.
Once a bank gets a deficiency judgment, it is entitled to use common collections methods to collect the deficiency from the borrower by, for example, garnishing wages or levying a bank account.
Are Deficiency Judgments After a Home Foreclosure Allowed in All the States?
Some states have anti-deficiency laws prohibiting deficiency judgments in certain circumstances.
Are Deficiency Judgments Allowed in Oklahoma?
Yes, Oklahoma law allows deficiency judgments in some circumstances.
What Is the Procedure for Deficiency Judgments in Oklahoma?
If you take out a loan to buy a home in Oklahoma, the bank will likely require you to sign a mortgage as part of the transaction. The mortgage contract gives the bank the right to sell the property at a foreclosure sale if you default on the loan payments or violate the contract in some other way.
At the foreclosure sale, the bank will typically make what’s called a “credit bid” on the property. A credit bid is when the bank, instead of paying cash, gets a credit in the amount the borrower owes. Sometimes the bank bids the full amount of the borrower's debt at the sale. However, sometimes, the bank bids less than the full amount owed. (In Oklahoma, the highest bid has to be at least two-thirds of the appraised value of the property, unless the borrower waives the appraisal.)
If the bank or a third-party buys the home at the foreclosure sale for less than the borrower owes on the loan, the difference between the sale price and the debt is the deficiency. In some circumstances, the bank may then get a personal judgment (a deficiency judgment) against the borrower for the deficiency amount.
Example of How to Calculate a Deficiency Judgment in Oklahoma
Say Owen gets a mortgage to purchase a home in Tulsa. After a few years, he falls behind in the monthly payments after getting laid off from his job and the bank forecloses. At the sale, Owen’s home sells to a new owner for $375,000. Unfortunately, he owes the bank $390,000. The deficiency is $15,000.
What Are the Legal Requirements for Deficiency Judgments in Oklahoma?
In most cases, the bank will choose the judicial foreclosure process in Oklahoma and file a lawsuit to foreclose. But if the bank chooses a nonjudicial foreclosure, you can force the bank to go through the courts instead. This option might be beneficial if you have a defense to the foreclosure.
However, one reason to let a nonjudicial foreclosure go forward is that, in some circumstances, you can prevent a deficiency judgment.
Deficiency Judgments and Judicial Foreclosures in Oklahoma
In Oklahoma, the bank can get a deficiency judgment in a judicial foreclosure, but it has to ask for the judgment:
- when making a motion for an order confirming the foreclosure sale, or
- within 90 days after the foreclosure sale. (Okla. Stat. tit. 12, § 686 (2025).)
Deficiency Judgments and Nonjudicial Foreclosures in Oklahoma
After a nonjudicial foreclosure, the bank can start an action to get a deficiency judgment within 90 days of the sale. (Okla. Stat. tit. 46, § 43 (2025).)
However, the bank can't get a deficiency judgment if the borrower sends written notice to the bank by certified mail at least ten days before the foreclosure sale that the property is the borrower’s homestead, which is defined in the Oklahoma Constitution, and that the borrower elects against a deficiency judgment. (Okla. Stat. tit. 46, § 43(A)(2)(c)).
Deficiency Judgment Limitation in Oklahoma Foreclosures
The court can limit the maximum amount for a deficiency judgment to the lesser of the difference between the total debt (including the amount of the indebtedness, interest, attorneys’ fees, as well as the costs and expenses of sale) and the property’s fair market value or the foreclosure sale price. (Okla. Stat. tit. 12, § 686, Okla. Stat. tit. 46, § 43(A)(2)(d) (2025).)
How Can I Avoid a Deficiency Judgment in Oklahoma?
A few ways to potentially avoid a deficiency judgment are:
- Negotiating a settlement of a deficiency. If you lost your home to a foreclosure sale, which resulted in a deficiency, you might be able to work out a settlement with the bank to accept less than the full deficiency amount and forgive the rest. Generally, however, the IRS considers forgiven debt as taxable income, subject to some exceptions.
- Completing a short sale or deed in lieu of foreclosure (before the sale) in which the bank waives the deficiency. If you owe more than your home is worth, the bank might be willing to let you complete a short sale or deed in lieu of foreclosure. But it’s fairly common for banks to insist borrowers pay all or some of the deficiency after one of these transactions or for the bank to reserve the right to go after you for a deficiency judgment. If you're doing a short sale or deed in lieu for the sole purpose of avoiding a deficiency judgment, make sure that the bank agrees in writing to give up its right to the deficiency. Again, there could be tax consequences if the bank forgives the deficiency.
- Filing for bankruptcy. You might be able to eliminate or reduce your liability for a deficiency if you file for bankruptcy.
Getting Help With an Oklahoma Foreclosure
If you’re facing a foreclosure in Oklahoma, consider talking to a local lawyer if you want to learn more about the process and what options you might have in your circumstances. A foreclosure attorney can help you convert a nonjudicial foreclosure to a judicial one, elect against a deficiency judgment in a nonjudicial foreclosure, or assist you in finding a way to potentially prevent a foreclosure, like with a modification, forbearance agreement, or repayment plan.
Also, consider talking to a HUD-approved housing counselor especially if you want to learn about loss mitigation options.