Foreclosure Law in Utah

In Davis County, Utah is a process authorizing 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 typically involves a home that was purchased with a mortgage from a bank. The bank will typically 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 identified 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 Davis County, 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 forthright with your lender, and stay in touch with them as much as possible.

You should be mindful of the fact that your bank wants you to make your monthly mortgage payments - they probably aren't scheming to trick you into giving up your home. This isn't out of altruism, it's due to the fact that foreclosure is almost never as lucrative for the bank in the long run than a mortgage that is paid in full over a period of years or decades, with interest accruing the whole time. For a bank, a foreclosure is simply a last resort to cut their losses.

If you face sudden expenses, such as medical bills or a lawsuit, which put a serious but relatively short-term strain on your finances, you should notify your lender immediately. You might find that they are willing to accept lower payments, if this will prevent you from defaulting.

In Utah, some buyers have no choice but to resort to a short sale. This is simply the sale of the house, and using the funds to pay off the remainder of the mortgage. One advantage of a short sale is that, if the house sells for less than the mortgage balance, the remaining debt is excused, and the borrower is free and clear.

Can a Davis County, Utah real estate attorney help?

If you are worried that your Davis County, Utah house is going to be foreclosed, and want to try and stop this, a knowledgeable real estate lawyer can help.