Discover the ins and outs of pre-foreclosures in Utah, from the start of the process, pre-foreclosure procedures and your rights as a homeowner under state and federal laws. Expand your knowledge and make informed decisions with our comprehensive pre-foreclosure guide.
Per-Foreclosure in Utah
When things start to go bad for home owners because of their late house payments, many will ask what is pre-foreclosure. Pre-foreclosure can happen if you become behind in your house payments or cannot make up your forbearance amount when it comes due. It’s important for both buyers and mortgage holders to understand the process. Currently, the number of foreclosure processes that start are low; however, that number may rise in the coming months.
What Utah Lawyers say about Utah’s foreclosure laws and procedures
“Utah’s foreclosure laws are among the most favorable for lenders in the country.”
Brett Burt, Utah bankruptcy and foreclosure attorney
In Utah, foreclosures can occur quickly and without much notice to the homeowner. It’s important to understand your rights and options.Marianne Sorensen, Utah real estate attorney
If you are facing foreclosure in Utah, it’s important to seek legal counsel as soon as possible. There may be options available to help you keep your home or negotiate a favorable outcome.Jared Hyde, Utah foreclosure defense attorney
What is Pre-Foreclosure in Utah
Many homeowners across Utah face difficulties making their monthly mortgage payments.
In Utah, when a homeowner misses 3 months of mortgage payments, the lending institution may issue a Notice of Default. This notifies the homeowner to pay their late mortgage payments, or the mortgage company will issue a sale date notification in 90 days. This 90 day period between when a notice of default is issued and a sale date is issued, is known as “pre-foreclosure.”
As mentioned, In Utah banks and mortgage lenders typically provide three months for the homeowner to become current after the Notice of Default is issued. Of course this number can vary by bank and situation sometimes. I have met people that have gone more than 3 months past the notice of default before the bank issued a foreclosure sale date.
If a homeowner fails to make the necessary payments, the bank will foreclose on the home 3 weeks after the foreclosure sale date is issued. The new owner or mortgage company will take ownership and evict the homeowner. Thankfully, during this stage of the foreclosure process, a mortgage holder has the opportunity to take advantage of several options to prevent losing their home.
What Fees and Charges Do I Have to Pay While in Preforeclosure?
During pre-foreclosure in Utah, both federal and state laws regulate the fees that can be charged to homeowners. Here are the legally permissible fees that can be charged during pre-foreclosure in Utah, along with estimated fee amounts:
- Late Fees: Lenders may charge late fees if you miss a mortgage payment. The amount charged must be reasonable and cannot exceed a certain percentage of the past-due payment amount. Late fees in Utah typically range from 3-6% of the past-due payment amount.
- Attorney Fees: If the lender hires an attorney to pursue foreclosure, they may pass on the cost of those legal fees to the borrower. Attorney fees can vary widely, but in Utah, they typically range from $1,500 to $5,000.
- Foreclosure Avoidance Assistance Fees: Under Utah law, a foreclosure avoidance assistance company may charge a fee for their services, but that fee cannot be collected until the services have been fully performed. These fees can vary widely depending on the company and the services provided.
- Recording Fees: Lenders may charge fees to record documents related to the foreclosure process, such as the notice of default or notice of sale. In Utah, recording fees typically range from $20 to $50 per document.
- Property Inspection Fees: If the lender hires someone to inspect the property to determine its condition, they may pass on the cost of those fees to the borrower. Property inspection fees in Utah typically range from $150 to $500.
- Property Preservation Fees: If the lender hires someone to preserve and maintain the property during the foreclosure process, they may pass on the cost of those fees to the borrower. Property preservation fees can vary widely depending on the services provided.
The fees charged during pre-foreclosure could vary depending on the specific circumstances of your case.
Pre-foreclosure Options for Borrowers
If you’re 3 months behind on mortgage payments, you’re likely to receive a notice of default from your mortgage lender.
This document will state that you have not made mortgage payments for the last 90 + days. It’s important not to panic.
You have options that can delay or even prevent losing your home:
- If your mortgage is “above water,” (meaning you have equity in your house) you may be able to refinance your mortgage, receiving lower monthly payments even though you are behind in your payments. Check with your local Salt Lake City mortgage broker… or contact us and we can connect you with a reputable one. In the current market, it is also fairly easy to list your house and get it closed before the 90 pre-foreclosure period is up. This is assuming few repairs need to be done and you start the process quickly. We can help you list your house if that is what you want to do. If you belong to a credit union, they may loan you some money against your house even with bad credit if you have equity in your house.
- You may be able to quickly sell your home to a real estate investor that’s reputable in Utah like us at Gary Buys Houses. You can sell to us as-is, no repairs needed, we can bring your payments current, or we can give you time to stay in the house while you relocate. We buy houses in Utah quickly, often in just a week or two, will pay in cash, and takes the stress out of trying to find a buyer. We also have options to rent the house back and possibly even buy the house back. Sometimes life happens, and we want to help people where we can.
- You can contact the bank and ask them to permit a LOAN MODIFICATION. In a Loan Modification, you will negotiate with your bank to “modify” the terms of your loan. This includes adding the payments that are behind to the back of your loan, changing the interest rate or changing the length of your loan. Loan modifications are becoming harder to get because most houses have equity in them now. A mortgage loan forbearance may also be possible.
- You can contact the bank and ask them to permit a Short Sale. In a short sale, you’ll sell your home for less than it’s worth, and the bank will take the loss as a tax write-off. In some short sales you may still be required to pay the difference to the bank if the house doesn’t sell for what is owed on the loan. This is called a Deficiency Judgement. We use an ATTORNEY for all of our short sales to make sure the bank waives their option of a deficiency judgement.
- You may be able to declare bankruptcy, which can buy you time to pay your debt. We work with an attorney that will take the time to answer all of your questions. I make no money for referring our attorney, so please contact me if Chapter 13 Bankruptcy to stop foreclosure is the option you want to do. I personally think CH13 Bankruptcy is the best option if you want to keep your house.
Lenders are very much aware of the widespread financial troubles across the country and they’re willing to work with borrowers a lot of the time.
If you’re honest and communicate with your lender, you’ll often find that there are options that will allow you to remain in your home, or at least salvage your credit rating.
A foreclosure can often negatively affect your credit score by 200-400 points and can prevent you from obtaining a loan of any sort for 3-5 years, so be very dutiful if you’ve received a Notice of Default from your lender.
When you are wondering what is pre-foreclosure, always remember the sooner you find a solution the better. But if you’re not able to find a solution with your lender or file a bankruptcy, give Gary a call at 801-382-9199. My associates and I are always willing to help you.
What are My Property Rights in Utah When in Preforeclosure?
As a property owner facing pre-foreclosure in Utah, it’s important to understand your rights and options. Here is a bullet point list of some of the rights you have as a property owner:
- Right to cure: In Utah, property owners have the right to cure the default by bringing the loan current, which can stop the foreclosure process.
- Right to reinstate: Property owners have the right to reinstate the loan by paying all past-due payments, fees, and costs before the foreclosure sale.
- Right to redeem: Property owners have the right to redeem the property by paying the entire loan balance, fees, and costs before the foreclosure sale.
- Right to notice: Utah law requires lenders to provide notice to the borrower before initiating foreclosure proceedings. The notice must be sent by certified mail and include important information about the default and options for curing it.
- Right to request mediation: Property owners in Utah have the right to request mediation with their lender to try and find a solution to avoid foreclosure.
- Right to legal counsel: Property owners facing foreclosure in Utah have the right to seek legal counsel to help navigate the process and protect their rights.
It’s important to note that these rights may vary depending on the specific circumstances of your foreclosure case. It’s always best to consult with a qualified attorney who can provide guidance on your specific situation and help you explore all of your options. By understanding your rights and options, you can make informed decisions and potentially avoid losing your home to foreclosure.
Ways We Can Help If You’re In a Pre-Foreclosure Situation
- I can refer you to a great bankruptcy attorney. We work with an attorney that will take the time to answer all of your questions. I make no money for referring our attorney, so please contact me if Chapter 13 Bankruptcy is the option you want to do.
- I can buy your Utah house – We will make you an all-cash offer on your house in as-is condition, give you plenty of time to move after you get your sales proceeds, rent your house back to you and maybe even make it so you can buy your house back.
- I can get you a loan based only on your equity and not your credit score.
- You can ask me questions and I can provide you FREE guidance and resources so you can make a well educated decision. This costs you nothing, there’s absolutely no pressure, no obligation… just free guidance without a catch. When you need to stop foreclosure in Utah, we are a great resource to help you.
If you’re in the pre-foreclosure stage… you’ve still got time to fix this situation.
Just connect with your bank to see if they’re willing to work with you… or contact us if you’d like to see what we can buy your house for or to tap into our free foreclosure foreclosure resources.
We purchased Johnie and Candy’s house that was in Foreclosure and got them money to move and allowed them to stay in the house for 3 months FOR FREE after the purchase. The house also needed a lot of repairs which were no problem for us.
So what is pre-foreclosure? It is the period between when a notice of default is issued and the property is sold at auction. There are plenty of options for home owners in this situation with their house payments. Most important…do not put off exploring your options as soon as the trouble starts.