Real Estate Attorney for Real Estate Investors
Utah allows for both in court or judicial and out of court or non judicial foreclosures. As in most states where both processes are used, the vast majority of foreclosures are non judicial. The language in most mortgages or deeds of trust allow for this with a power of sale clause.
In the absence of the power of sale clause judicial or court process must be followed. This takes a lot longer. In judicial foreclosure, the bank must file a complaint with the court against the homeowner. They do this to get a decree of sale from the judge. When the court determines that the borrower is in default, they will give the homeowner a period of time in which they can come up with the amount that is past due, plus costs and attorney fees. If the homeowner can do this in that time frame. If the homeowner can do this in that time frame the can avoid a foreclosure and keep their home. If they do not come up with that money in the allotted time, an auction will be held and the property will be awarded to the highest bidder.
Most homes that go to auction in Utah and most other states as well, are not bid on because so much is owed on the home, that it is not a good enough deal for the bidders. In this situation, the home is awarded to the lender. In other words, it goes back to the bank, and they have to try to sell it again. This is time consuming and expensive for the bank.
The vast majority of foreclosures in Utah are taken care of non- judicially. That means that there is a power of sale clause in the mortgage or deed of trust.
In such an out of court foreclosure, a notice of sale must be published for three consecutive weeks in a local paper. The final advertisement in this series must be placed a minimum of 10 days prior to the scheduled sale date. It can not be placed any further out from the sale date than thirty days.
This same notice of sale must be posted two other places, no later than twenty days in front of the scheduled sale date.
The required placing of these public postings of notice of sale are at the county recorders office in the county where the home is located and on an easy to find place on the home itself.
This notice of sale must contain the place, date, and time of the scheduled sale. This place is always on the courthouse steps and the time is always between 8 am and 5 pm.
Home owners do have a right of redemption period Utah. This is a time when they can legally re-purchase that home after it has been sold at the trustee's sale. In Utah, a judge can even extend that right of redemption period. This almost never happens, but it does make the former owner feel like he could get his house back, if he wanted to.
Deficiency judgments are allowed in Utah. This gives the bank the right to pursue the home owner, for any amount of difference between what the home sold for at auction, and what was owed on the loan.
In Utah, the bank even has the right to seize the property until they have received this amount of money. I have never heard of this occurring, but it is allowed.