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Short Sale FAQ
Utah Foreclosure Laws
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If you are currently behind on your mortgage or facing foreclosure, it is important to
understand the foreclosure laws in Utah. Utah recognizes both judicial and non-judicial foreclosure
processes. The main security instrument used in Utah is the Deed of Trust. Even though the term
mortgage is used most often, the chances are if you have financed your home in Utah you have a Deed
of Trust. With a Deed of Trust, the non-judicial foreclosure process is used. Below I have
described, generally, how the mortgage default and non-judicial foreclosure process works.
Mortgage Default
When you
originate a mortgage, you agree to make monthly installments to pay back the loan over a specified
amount of time. A date is specified as to when the monthly payment is due. Most Utah mortgage
lenders give borrowers a 10-15 day grace period in which the borrower has to make the payment. If
payment has not been received within 30 days you will probably receive a call from your lender
reminding you that your payment is late and that a late charge will be assessed to your account.
After 45 days most lenders will start a formal collection process and the phone calls will start to
roll in. Between 60 and 90 days if payment has not been made, your lender will assume that you have
defaulted on your loan and will turn your account over to an attorney to begin formal foreclosure
proceedings. If you reach this stage, it's essential that you understand Utah foreclosure law.
The Foreclosure
Process
The formal foreclosure proceedings begin when
your lender instructs a trustee (usually an attorney) to record a Notice of Default with the
county recorders office. From the time that the notice is recorded you have a 90-day
reinstatement period. During this time, you still have the ability to bring the loan current
by paying all the back payments along with late charges, interest, attorney's fees etc. This
is known as reinstatement. After the 90-day reinstatement period the trustee will usually
record a Notice of Trustees Sale. This starts the final right of redemption period, which
lasts three weeks. During this time, notice is placed on the property and in a regularly
circulating newspaper for three consecutive weeks, giving the time, date and location of the
trustees' sale. After the final right of redemption period the property is sold at auction to
the highest bidder.
Lenders do not want to foreclose. They are in the business of lending money not owning property.
Due to costs of the foreclosure process it is usually in the lenders best interest to consider
options to help you become current or allow you the time and ability to sell your home prior to
foreclosure. Learn more about foreclosure prevention options.
Research Utah Foreclosure
Law
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Short
Sale FAQ