Foreclosure Law in Utah

In Bluffdale, Utah is a process allowing a lender of a mortgage to take possession or ownership of the property that secured the mortgage in the first place, to cut their losses when a borrower defaults on his or her loan.

If an ordinary consumer faces foreclosure, it usually involves a home that was purchased with a mortgage from a bank. The bank will usually try to sell the house at a public option, with the hope of at least covering the remaining debt, to avoid taking a large loss.

In Utah, and every other state, foreclosed homeowners can go through a "foreclosure by judicial sale." In this type of foreclosure sale, a court supervises the sale, ensuring that the bank makes every reasonable effort to get the highest price possible for the house. The purpose of this is to maximize the chances that the bank gets, at the very least, the remaining balance of the mortgage. Although this may seem counter-intuitive, it is intended to protect the borrower: it helps prevent them from still owing money after the house is sold at auction.

In a large number of states, but not all of them, mortgages are a type of loan known as a "non-recourse loan." While the regulations governing these loans are complex, it most basically means that, once the house is sold, and the sale price doesn't cover what the borrower owes, the lender can't go after the borrower for the remainder. They simply have to take the loss.

How to Possibly Avoid Foreclosure in Bluffdale, Utah

First and foremost, you need to communicate with your lender, and not ignore the issue. Ignoring a problem with your mortgage will not make it go away, and can only make things worse. You should be honest with your lender, and stay in touch with them as much as possible.

You must keep in mind that banks are in the business of lending money, not flipping property: the bank doesn't really want your house. To that end, they'll sometimes go to great lengths to accommodate your financial situation, whatever it may be. For banks, foreclosure is a last resort.

If you experience a sudden change in your financial situation, your lender, in an effort to prevent you from defaulting, might be willing to accept lower monthly payments, at least temporarily.

Some buyers in Utah, when none of the above options have worked, resort to a "short sale." This involves selling a house which is about to be foreclosed, usually for less than its market value. If the house sells for less than what's left on the mortgage, the homeowner is relieved of the duty to pay the balance. If you have decided that you have no hope of making your mortgage payments, and foreclosure seems inevitable anyway, this might be the way to go.

Can a Bluffdale, Utah real estate attorney help?

If you feel that your home is close to being foreclosed in Bluffdale, Utah, and want to try to prevent this, the advice and assistance of an experienced real estate lawyer can mean the difference between keeping or losing your home.