Utah Foreclosure Laws
National Overnight
TODAY
+/-
Last Week
4.51%
5.06%
3.24%
Utah chiefly functions as a title theory state in which the title of a property stays as assurance till the loan in question is paid off in full. Foreclosure, under this premise, is non-judicial. A trust deed or a deed of trust is the document which keeps the title secured. Mortgages can also act as liens on properties to pursue judicial foreclosure through courts in accordance with Utah law. The inclusion of a power of sale clause within a deed of trust quickens the foreclosure process and is therefore the most commonly used process by lenders for foreclosures.
Non-judicial foreclosure with no involvement of action by the court is primarily followed in Utah. This process of foreclosure is referred to as a sale of trust property by public auction and the public and the borrower are required to be a given notice about the foreclosure. At the preliminary signing of the mortgage, a power of sale clause is normally added in the trust deed, through which a property can be sold by a trustee if the borrower defaults on the loan, thereby allowing the unpaid loan to be taken care of. An absolute requirement in Utah is not present for a power of sale clause to be included within the trust deed. Not all parties can act as trustees, the list that includes those who can are officers of title companies, banks and attorneys. The trustee works as the lender’s representative and gets into effect the auction, which is the usual way for the property to be sold. Being a non-judicial procedure, some very austere requirements for notices exist.
Before a lender initiates foreclosure proceedings, a notice of default must be filed within the county where the property is situated, and also given to the borrower in default, within a period of three months since the default. A generally circulated newspaper has to be used to publish the notice within the county where the property is situated for three successive weeks, once each week. The last of these publications needs to appear a minimum of thirty days prior to the sale. The proposed sale’s notice also need to be registered at the recorder’s office where the trust property is situated.
The notice of default needs to include within it information such as the sale’s place, time and date, the default’s description, an election-to-sell by the lender and information that is recorded from deeds of trust.
Foreclosures sales have to take place in between 09:00am and 05:00pm on business days at the place, time and date mentioned within the notice of sale. The property is auctioned by the trustee to the party who places the highest bid. If the original receiver of the default notice is provided with a notice in writing, the sale of the foreclosure can be postponed by forty five days.
A judicial foreclosure process may also be followed by lenders in Utah where a lender has to go through a court which in turn announces the foreclosure’s final verdict. A complaint in conjunction with a lis pendens (a document that is recorded to provide a notice to the public about the property in foreclosure) needs to be filed in the court. Judicial foreclosures in Utah usually follow the same process as non-judicial foreclosures, with the one differentiating factor that judicial foreclosures are followed through courts. The property then sells at a publicly notified sale.
The legal documents are referred to as a trust deed, and a security agreement in cases of commercial transactions. These are both merged from time to time. The filing of a mortgage can also be done to validate the loan in question and its repayment terms, which find a mention in the note.
It can take about 120 days, with the time required for various notices taken into consideration, for a non-judicial foreclosure that is not contested to get into effect. If bankruptcy is filed for by the borrower, or if the action is contested and the sale is sought to be postponed, there can be a delay in the process.
A post foreclosure sale statutory right of redemption, wherein a borrower pays the amount left on the loan and the costs, and then lays claim on the foreclosed property, exists in Utah. The redemption period can be extended by the court.
If a foreclosure property sells for lesser than the amount on the loan that is secured by the deed of trust or mortgage at the public-sale, a lender can obtain a deficiency judgment.
Foreclosures in Utah are governed by laws that are part of Title 57 Utah Code (Conveyances) Chapter 1, et seq. Referencing of mortgage foreclosures is in Title 78, Chapter 37.
