When a bank chooses to foreclose on a home in Utah, it can use one of two procedures—a “judicial” process that must go through the court system, or the “nonjudicial” option that doesn’t require court supervision.
If you’re facing a foreclosure in Utah, it will likely be nonjudicial in nature because most banks choose this cheaper, more efficient method. In this article, you’ll learn about nonjudicial foreclosure procedures in Utah, as well as rights that might help you keep your home. (To learn about what to do, and what not to do, in a foreclosure, see Foreclosure Do's and Don'ts.)
Federal law usually prevents the servicer from initiating a foreclosure until the borrower is more than 120 days overdue on the loan. (To learn more about the federal law that delays the beginning of a foreclosure, see How Soon Can Foreclosure Begin?)
Servicers are also, under federal law, required to work with borrowers who are having trouble making monthly payments in a “loss mitigation” process. (To learn more about federal mortgage servicing laws, see Federal Laws That Protect Homeowners During Foreclosure.)
Before starting a foreclosure, the bank must mail a notice to the borrower giving at least 30 days to cure the default by getting current on the loan. (Utah Code Ann. § 57-1-24.3).
Residential foreclosures in Utah are typically nonjudicial, which means the foreclosure happens outside of the state court system. (Learn more about the difference between judicial and nonjudicial foreclosures.)
The nonjudicial foreclosure process formally begins when the trustee records a notice of default at the county recorder's office. The notice of default gives the borrower three months to cure the default. (Utah Code Ann. § 57-1-24).
Within ten days of recording, the trustee mails a copy of the notice of default to anyone who has requested a copy. Most deeds of trust in Utah include a request for notice, so you’ll probably get this notification. (Utah Code Ann. § 57-1-26(2)(a).)
If you do not cure the default, after three months, the trustee will record a notice of sale and:
At the foreclosure sale, the property will be sold to the highest bidder, which is usually the foreclosing bank. At the sale, the bank doesn't have to bid cash. Instead, it makes a credit bid. If the credit bid is the highest bid at the sale, the property then becomes REO.
In some states, you can redeem (repurchase) your home within a certain amount of time after the foreclosure sale. Under Utah law, however, foreclosed homeowners don’t get a right of redemption after a nonjudicial foreclosure. (Utah Code Ann. § 57-1-28(3)).
The foreclosing bank may obtain a deficiency judgment following a nonjudicial foreclosure if it files a lawsuit within three months after the foreclosure sale. The deficiency amount is limited to the difference between the borrower’s total debt and the property’s fair market value. (Utah Code Ann. § 57-1-32).
If you don’t vacate the property following the foreclosure sale, the new owner will probably:
The eviction process starts with a notice to quit. If you still don’t leave by the deadline given in the notice, the new owner will go through the court system to evict you and obtain possession of the property. (Utah Code Ann. § 78B-6-802.5).
Federal and state laws establish a structured foreclosure process and timeline. But mistakes that violate the law are common in foreclosures. If you think your bank or servicer broke the law in the foreclosure process or you want to find out about different ways to fight a foreclosure, consider contacting a local foreclosure attorney.