Bank and financial institutions that lend out loans do so in exchange of a guarantee or collateral. This collateral can be in the form of property, cars, bonds or any other asset that you may possess. Sometimes people are unable to repay their loans. This is when foreclosure comes into play.
Foreclosure is a process where the lender tries to recover the loan amount from the borrower who has failed to pay back the loan in time. They try to recover the loan by selling the asset previously set as collateral.
Statistics Related To Foreclosures In The United States
It looks like the American market is starting to see growth in foreclosures. In many markets in the US in 2018, properties that were foreclosed on is increasing. The trend continued in 2019 as well.
At Gary Buys Houses, we try and get in touch with people in foreclosure as part of our business. Some people want to sell their house while in foreclosure or talk to a professional about their situation. There are a lot of options to sell or keep your house in foreclosure. We have noticed the number of notice of defaults in Salt Lake, Utah, Davis, Weber and Tooele counties have been slowly increasing since about the beginning of 2019.
One thing to understand is that foreclosure laws vary in different states. So if you have taken a loan in a certain state you have to be aware about the laws of that respective state.
Foreclosure In Utah
The state of Utah has its own specialized foreclosure laws. For cases where no legal action is taken from the side of the borrower, the foreclosure process can take up to 120 days. However sometimes people tend to take the matter into a court of law so that they can stop themselves from getting evicted. This gives them ample time to come up with the amount of money they need to pay for the loan.
The borrowers try their best to stop the foreclosure so that they can save their property and get more time to gather the money they need to repay the loan. Sometimes though these efforts to find the needed funds fail which results in the pre-foreclosure process.
When Is It Too Late To Stop Foreclosure
Some states offer a redemption period in which the borrowers can come up with the entire sum of money (along with extra cost) in the redemption period and save their property. The state of Utah also offers an after sale right of redemption. However this right is only applicable on judicial foreclosures. It is rare to have a judicial foreclosure in Utah, as Utah is a Non Judicial Foreclosure state. Meaning the foreclosure does not require a court hearing, and the mortgage holder can force a sale of your house at public auction.
Stop The Foreclosure In Redemption Period
As stated, in Utah there is typically no redemption period. The redemption period is set by the court and may vary in different cases. The court holds the authority to extend the redemption period as well. After the redemption period ends the borrower can file for another extension however if the court declines the extension then the borrower will not have any other choice to stop the foreclosure.
Non Judicial Foreclosure
There is a 120 day non judicial foreclosure period in Utah. If the borrower pays back the loan amount or reinstates the loan in these 120 days, it would typically become very difficult for the mortgage company to move forward with the foreclosure. Reinstate means to only pay the missed payments and legal fees to bring the loan current rather than paying the entire mortgage off.
If You Haven’t Filed For Bankruptcy
If you don’t have the money to pay back your loans then you can file for bankruptcy. Filing for bankruptcy may affect your credit rating but it will also give you a cushion towards foreclosure of your property. Bankruptcy, specifically chapter 13, is the best option to keep your house most of the time. A chapter 13 bankruptcy while in foreclosure can hinder the sale of your house and cause you to receive less proceeds. Bankruptcy is best if you want to keep your house, not sell your house in our opinion.
Hiring Legal Help
If the bank or mortgage company is sending you regular letters of foreclosure, then you need to take them seriously. Ignoring those letters can be a great problem. Ignoring the letter and avoiding talking with a professional will bring you to a point of no return.
When you take out a loan and have your property or any other asset as collateral then you have to be very careful about repayment. You have to educate yourself about the consequences of non repayment of the loan. Being aware of all the policies and laws will help you in the time when the loan company is going for a foreclosure.