How Does Foreclosure Work in Utah?

How Does Foreclosure Work in Utah

Are you behind on your mortgage payments for your Utah home? Not sure whether you’ll be able to bring your account current before your lender mails you notice requesting that you pay your overdue balance? Then you’ll want to familiarize yourself with the Utah foreclosure process and how it works. 

Developing an understanding of the foreclosure process and timeline will help you determine how much time you have to handle your delinquent mortgage and what your next steps should be. Read on to learn how home foreclosure works in Utah. 

Your Mortgage Becomes Delinquent

When you fail to make your monthly mortgage payment on time, your loan will go into default, which will prompt your lender to send you a notice of delinquency, also known as a breach letter. Your lender may call you too to discuss your situation and repayment options.

This notice simply lets you know you’ve fallen behind on your payments and gives you an opportunity to bring your account current. It should also inform you about the various ways you can avoid foreclosure.

Be prepared to have late payment fees added to your delinquent loan balance, and in some cases, you may be assessed inspection fees too. In Utah, most deeds of trust allow the loan servicer to conduct drive-by property inspections once a loan becomes delinquent in an effort to protect their interest in the property. 

Your Lender Mails You a Pre-foreclosure Notice

When you’ve defaulted on your mortgage (meaning you’ve fallen at least 30 days behind on payments), your loan servicer or lender will mail you a pre-foreclosure notice, which will give you 30 days to bring the account current. They will also provide you with a single point of contact with whom you’ll speak regarding your overdue loan going forward.

A Trustee Files a Notice of Default

In most cases, federal law prohibits lenders from initiating the foreclosure process until a borrower is at least 120 days behind on their mortgage. If you’re in this situation and fail to pay your overdue balance, including all applicable fees, within the allotted 30-day period detailed in the pre-foreclosure notice, the foreclosure process will likely begin. 

Your lender will appoint a third-party trustee to file a notice of default with the county recorder’s office, and the trustee will also mail you a copy of this notice, typically by registered mail. 

A notice of default gives you three months to bring your loan current (also known as “curing the default”), which means paying all missed payments, late fees, and if applicable, collection fees and legal fees.

A Trustee Records a Notice of Sale

If you fail to “cure the default” within the three months given to you, the trustee will file a notice of sale. They’ll also mail you a copy of the notice, post the notice in the newspaper, and at least 20 days before the sale date, post the notice on your property. 

Once you’ve received a notice of sale, you can still stop the foreclosure process by paying all of your missed payments, as well as any applicable fees. If you’re unable to pay, your lender will foreclose on your home and sell the property at auction to the highest bidder. 

Deficiency Judgment May Take Place

If your property ends up selling for less than what you still owe on the loan, this is referred to as a deficiency. In this case, your lender can sue you for the remaining balance in court (the difference between what you owe and the sale price of the home), as well as any expenses associated with the suit. However, your lender only has three months to file — if they fail to do so within that time frame, you cannot be sued for a deficiency balance. 

Sell Your House Fast With We Buy Houses Utah

If you’re looking to avoid foreclosure and want to sell your house quickly to cure your delinquent mortgage, don’t hesitate to get in touch with our team at We Buy Houses Utah. We can buy your house as is, no matter what kind of condition it’s currently in, and will pay you cash at closing. We can close within a week or two at most and get you your money as quickly as possible. If you need to stay in the home for a while to sort out your new living situation, we can arrange for that too.

To learn more about how we work or get a no-obligation cash offer for your Utah home, give us a call today at 385-900-2274 or contact us online to request an offer, and we’ll be in touch.