If you are concerned about making your next mortgage payment and wonder when and if the bank is going to be knocking at the door it is important to understand the foreclosure process here in Utah. In Utah we have Judicial and non Judicial foreclosures... In reality though probably 99% of the mortgages in our state use Deeds of Trust. Don’t be fooled... just because it is a “Mortgage” or called one at least... It probably in reality is a note secured with a Deed of Trust because of this the non-judicial foreclosure is the method the banks here use to collect. In every state it is different. About half the states use the judicial process instead. In order for you to better understand I will briefly explain how each of the two process work once you are put in a position you can no longer pay the bank. If the explanations are not clear enough. Call me... Drew @ 801-636-3739. I would be glad to spend a bit of time on the phone or in some cases come out and meet with you and talk you through your options.

Mortgage Default
   When you obtain a mortgage or installment loan on your property secured by a mortgage you agree to pay monthly payments over a specific number of years until the principle and the interest are paid back to the bank.  There is a date when your payment is due. Most of the time you have a grace period where if you get the payment in you will not be marked late. I have seen this range from 10 to 30 days. Many times at the 15 day mark you will start receiving reminder calls where someone from the bank is “just wondering” how things are going and when and if you are going to make the payment. By the time the 30 day mark rolls around the calls tend to get a bit more serious and you will be charged a penalty. The bank representatives start threatening you by telling you what penalties are in your future. They will also threaten to hit your credit with bad marks and probably will have done so after just 30 days. About 15 days later they will either turn you over to collections with an outside company or themselves and the calls begin to get pretty aggressive.  By the time you are 60 days late the formal foreclosure proceeding will have started depending on the lender. Local credit unions are generally much more on top of this than say a HUGE national bank. Sometimes I have seen people hit 90 to 110 days late before the foreclosure process really begins. Particularly if you are acting very cooperative and have promised payments are coming up at a certain time etc. etc. etc. If the foreclosure process has really started for you, you should have an expert in your corner be it an attorney or a Realtor who knows what they are doing. A complete understanding of your rights and the law are necessary at this point.

The Foreclosure Process
   The foreclosure process starts when the bank hires a trustee, who is usually an attorney (probably 70% of the time in Utah it is Lundberg and Associates out of Salt Lake City) to file a notice of default with the county recorders office. Once this happens there is a 90 reinstatement period where they allow you to bring the note current (get it “reinstated”) by paying the past due payments plus a ton of fees and interest.  After the 90 day reinstatement period the trustee can record a Notice of Trustees Sale. This cannot occur prior to the 90 day reinstatement period.  When they have recorded the notice of trustees sale it starts the final “right of redemption” period, this lasts three weeks. During this three week period you will get all kinds of visitors as investors will have seen the notice posted on your property or more likely the trustee is required to run a notice in the local paper advertising the Trustees Sale. This will include your name, address, and what they are owed as well as the date, time and location of the sale. After the final right of redemption period passes there is no obstruction to them selling the property on the courthouse steps. The trustee shows up at the time they have advertised and takes bids. The bank that is foreclosing will generally offer whatever they are owed. If there is a second mortgage they will send a representative to bid for whatever is owed to the first plus whatever they feel they can sell the property for beyond the first mortgage being cleared plus their expenses. For this reason many times they do not even show up.

In most cases the banks and lenders do not want to foreclose on your home. Foreclosures are a part of their business they wish did not exist. The cost alone of the process is something they would prefer not to have to deal with let alone the risk of loss they shoulder by evicting you, having the property sit vacant, the attorney fees, the possible fix up costs, the Realtor the bank must hire to sell the property and utilities and maintenance in the interim.  Due to these costs they realize that if they can figure a way for you to keep the property by working out your payments or accepting a short sale offer they will. Relatively speaking they generally have less to loose.  If you have further questions about what your possible options may be from this point please call Drew Armstrong at 801-636-3739.

If you have any additional questions about the foreclosure laws in Utah, please contact me as well.

DISCLAIMER: This site provides information about foreclosure law designed to help users safely cope with their own legal needs. But legal information is not the same as legal advice. The application of law varies with an individual's specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation.