Utah is among the US states where a non-judicial foreclosure is allowed. A lender can foreclose your house using either a judicial or non-judicial foreclosure, but the latter option is often widely used in Utah. In this article, we’ll discuss the main points of Utah property foreclosure process. We’ll also discuss how you can stop property foreclosure in Utah.
What is a Foreclosure?
A mortgage is a secured debt. Your home is the collateral. When you sign the mortgage papers, you also sign a “promissory note,” which is your promise to pay back the debt within the deadline. Your contract outlines that the lender can sell your house if you don’t pay the mortgage within the mentioned timeframe.
In a non-judicial foreclosure, a “deed of trust” is used. Carefully study your mortgage documents to see whether you have a “mortgage contract” or a “deed of trust.”
A “deed of trust” involves a trustee. That means the bank doesn’t have to go to court to foreclose the house. Instead, the trustee has the rights to auction the property if the buyer defaults on the loan. That’s the nature of the non-judicial foreclosure in Utah. However, federal laws are here to help you.
According to laws, the bank cannot initiate a foreclosure process unless 120 days have passed without payment. That means you get at least four months to save your home.
Ways to Stop Home Foreclosure in Utah
If you’re unable to pay the next mortgage installment, the best option is to contact the bank’s loss mitigation department. Federal laws require that lenders guide you about your options during the pre-foreclosure phase. However, it’s possible to contact the department earlier so you can find a solution.
For instance, if you cannot pay back the amount because of sudden job loss, medical issues, or divorce; it might be possible to negotiate a mortgage forbearance plan with the bank. The bank can suspend your payments for a few months. During that time, you can deal with personal matters without worrying about a potential foreclosure.
You can reinstate your loan until before the sale of your home. You get three months to reinstate the mortgage after the trustee has recorded the notice of default at the county recorder’s office. It’s challenging to reinstate your mortgage when you’re experiencing financial challenges. However, it’s often the best option to stop foreclosure.
- Can you sell a luxury item to cover the pending mortgage installments?
- Is it possible to take on a second/part-time job?
- Can you get help with another loan?
Let’s say, in certain circumstances, you can somehow manage to pay the next mortgage installment, but you cannot pay the previous four-month payments. The lender is about to initiate the foreclosure process. In such situations, obtaining a second loan can help you. Tapping into the equity of your home or another loan are both valid options and can help you save your home.
Foreclosure process doesn’t begin until 120 days have passed. During this period, the lender can send you the pre-foreclosure notice. That notification will outline how can you stop foreclosure.
Modifying a loan is possible before the foreclosure begins, but you can also send the application after receiving a pre-foreclosure notice. Please keep in mind; a mortgage modification appeal doesn’t stop the foreclosure. There is no guarantee that the lender will accept your application.
A loan modification is recommended if you believe that a permanent shift has occurred in your income and it’ll be no longer possible to pay the mortgage.
Filing for Bankruptcy
It’s a common myth that filing for bankruptcy can immediately prevent the foreclosure. Bankruptcy does stop creditors from contacting you; however, there is no guarantee that you’ll be able to save your home. Furthermore, filing bankruptcy requires that you undergo mandatory credit counseling six months before you send the application. So, you cannot use this strategy at the last moment.
Negotiate a Short Sale
If the value of your property has dropped over the years, you need to negotiate a short sale with the lender. In Utah, lenders can pursue a deficiency judgment after a non-judicial foreclosure. If the lender cannot recover his entire investment, he can file a lawsuit to have you pay the remaining balance. Please consult a real estate solutions company to help negotiate a short sale with your lender.
Sell Your Home for Cash
Time slips quickly. If you are in the pre-foreclosure phase and the foreclosure date is set, you can choose to sell your home for a cash price. You can sell your house within days.
There are certain benefits of selling your home for a cash price. It’s an exit strategy, and you don’t have to sell it on the auction day. You can sell your home without worrying about the credit score or the future consequences of a foreclosure. Since you’re selling the property for cash, no banks are involved, and you can sell the house quickly. If you’re looking to sell your home for cash, please consult a reputable cash buying firm in your area.
You’ll get a free consultation regarding the process. The firm’s representative will first help you deal with the situation. If it’s in your best interest, the company will purchase your home as-is for a cash price within 10-14 days.