Understanding the foreclosure process in Utah is an important part of navigating your own home foreclosure situation and try to mitigate its consequences.
This process has different steps that Gary will guide you in each one, since this situation is not complex but boring and bureaucratical.
Before we dive into the foreclosure process in Utah…
What is foreclosure anyway?
Foreclosure is the legal process that lenders use to take back property securing a loan, generally after the borrower stops making payments. The bank will also use the foreclosure process to take back a house that has a Reverse Mortgage on it after the mortgage holder’s have passed away. If you have a REVERSE MORTGAGE FORECLOSURE, and you are the mortgage holder, most likely the bank should NOT be foreclosing.
Call the bank or call me for help. This may not apply to some very old reverse mortgages. If you have inherited a house with a reverse mortgage foreclosure, be sure to verify the balance with the bank. Often times the balance is much lower than the original debt limit. Call Gary at 801-382-9199 if you want help with the bank.
Foreclosure is no fun. But just know that it’s not the end of the world.
When you know how foreclosure in Utah works… it arms you with the knowledge to make sure you navigate it well and come out the other end as well as possible. The first decision to make is…do I want to sell my house or keep my house? There are steps you can take to keep your house or steps to take to sell your house. Gary will give you a free consultation to discuss either option.
The Basic Stages of A Foreclosure
There’s a few stages that are important to any foreclosure process.
Foreclosure works differently in different states around the country.
The two ways different states use to foreclose upon a property are: judicial sale or power of sale. Utah is a Non Judicial or Power of Sale State.
In Utah, the foreclosure process, by law, cannot start until the mortgage holder is at least 3 payments behind. Usually (but not always), a lender will send out many notices that you are in arrears – overdue or behind in your payment before you are 3 payments behind.
Under Power of Sale (or Non Judicial Foreclosure):
- The mortgage lender serves you with papers demanding payment, and the courts are not required – although the process may be subject to judicial review. This is called the Notice of Default. A server will post a paper copy of the notice on your house, and the notice of default will be mailed to you via Registered Mail. You have at minimum 90 days to cure the default in Utah.
- After the established waiting period has elapsed, a deed of trust is drawn up and control of your property is transferred to a trustee. This is when a Sale Date is issued for your property if you have not worked out a solution. By law, at least 3 weeks notice must be given before the foreclosure sale date.
- The trustee can then sell your property for the lender at a public auction after the 3 week notice.
Anyone who has an interest in the property must be notified during foreclosure process.
For example, any contractors or banks with liens against a foreclosed property are entitled to collect from the proceedings of an auction.
Let’s make sure everyone is on the same page with what Foreclosure means. Foreclosure is the process the bank goes through to take the house back if you stop making your payments. The foreclosure process in Utah ends when the house is sold at auction, and you no longer own the house.
At the time of this writing, typically 1 to 2 weeks after the house has been sold the bank will send a representative to see if the house is vacant. If the house is not vacant, the bank MAY give you say $2000.00 to leave in 4 weeks and take all the contents. So you probably have 6 weeks and a little money in this scenario.
Another option would be to not leave and force the bank to evict you. This could take up to 8 weeks in Utah from the day the house was sold at auction.
What Happens After A Foreclosure Sale Date?
After a foreclosure is complete, the loan amount is paid off with the sale proceeds.
Sometimes, if the sale of the property at auction isn’t enough to pay off the loan, a deficiency judgment can be issued against the borrower.
A deficiency judgement is where the bank gets a judgement against you, the borrower, for the remaining funds owed to the bank on the loan amount after the foreclosure sale. This is why it is so important to consider a TRADITIONAL SALE or a SHORT SALE at the Notice of Default stage if you need or want to sell your house in foreclosure.
Here’s a great resource that lists the state by state deficiency judgement laws, since every state is different.
Generally, it’s best to avoid a foreclosure auction. Instead, call up the bank, or work with a reputable real estate firm like us at Gary Buys Houses to help you negotiate discounts off the amount owed to avoid having to carry out a foreclosure.
Experienced investors can help you by negotiating directly with banks to lower the amount you owe in a sale – or even eliminate it, even if your home is worth less than you owe. We back up our experience with Trusted Foreclosure Experts that are on our team. AND, Gary Parker is licensed in Utah to work with home owners in Foreclosure in Utah.
If you need to sell a property near Salt Lake City, we can help you.
We buy houses like yours from people who need to sell fast.
We ❤️ your questions so please call or text Gary at 801-382-9199
or use the form 👇 for email.