What happens to the homeowner's equity in a foreclosure?

In Oklahoma, when a homeowner is facing foreclosure, their equity in the home is affected. Equity is the difference between the value of the property and any outstanding loans secured against it. When a home is foreclosed upon, the lender is able to take ownership of the home and any equity that the homeowner had in it. This means that if the homeowner had any excess funds paid into the property above and beyond their mortgage payments, that money will be forfeited to the lender. Typically, the lender will resell the property to recoup the money that they loaned the homeowner and to cover the costs of the foreclosure itself. If there is any money left over after the sale, the lender must return it to the homeowner. This is known as the surplus amount. Ultimately, the homeowner’s equity in the home is reduced to zero in a foreclosure. They no longer have any ownership in the property or any of the money that they put into it. However, the homeowner may still be able to receive a small portion of their equity in the form of the surplus amount.

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