In Utah, lenders may foreclose
on a mortgage in default by using the judicial foreclosure process.
Judicial Foreclosure
The judicial foreclosure process is one in which the lender must file
a complaint against the borrower and obtain a decree of sale from a
court having jurisdiction in the county where the property is located
before foreclosure proceedings can begin. Generally, if the court finds
the borrower in default, they will give them a set period of time to
pay the delinquent amount, plus costs. If the borrower does not pay
within the set period of time, the court will then order the property
to be sold in the manner of normal execution sales.
Non-Judicial Foreclosure
The non-judicial process of foreclosure is used when a power of sale
clause exists in a mortgage or deed of trust. A "power of sale" clause
is the clause in a deed of trust or mortgage, in which the borrower
pre-authorizes the sale of property to pay off the balance on a loan
in the event of the their default. In deeds of trust or mortgages where
a power of sale exists, the power given to the lender to sell the property
may be executed by the lender or their representative, typically referred
to as the trustee. Regulations for this type of foreclosure process
are outlined below in the "Power of Sale Foreclosure Guidelines".
- Power of Sale Foreclosure Guidelines
- If the deed of trust or mortgage
contains a power of sale clause and specifies the time, place and
terms of sale, then the specified procedure must be followed. Otherwise,
the non-judicial power of sale foreclosure is carried out as follows:
A notice of sale must be published once a week for three (3) consecutive
weeks in a newspaper of general circulation in the county where the
property is to be sold. The last publication must be at least ten
(10) days but not more than thirty (30) days before the date of sale
is scheduled.
The notice of sale must also be posted, at least twenty (20) days
before the date of sale is scheduled, in some conspicuous place on
the property to be sold and at the office of the county recorder of
each county in which the property is located.
The place of sale must be clearly advertised in the notice of sale
and the sale must be held between the hours of 8 am and 5 pm.
Borrowers do have a
right of redemption in Utah, but the court may extend the redemption
time past the time allowed in regular judgments so there is no set length
of time.
It is possible to obtain a deficiency judgment against the borrower
for the difference between the amount the borrower owed on the original
loan and the foreclosure sale price and the lender may be able to seize
the property until the differing amount is paid.
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