Dealing with Mortgage or Home Foreclosure

Are You Dealing With a Mortgage or Home Foreclosure?

I have just received noticed that my lender is beginning foreclosure of my home.  What should I do? What are my options?  In the current economic downturn and foreclosure crises, the preceding scenario is all too common.  Realize that if you find yourself in this situation you are in good company.  In the month of December 2011, one in every 548 homes in the state of Utah received a foreclosure filing—in that month alone.  We find that may people do not understand the foreclosure process and are generally unaware of what options are available to assist struggling families.  We provide answers to some common questions and a few options.

How Long Do I Have Before I am Required to Move?

Utah, like most western states permits non-judicial foreclosure.  Non-judicial foreclosure simply means that the lender is not required to sue you to foreclose.  Instead, the lender can commence foreclosure by following the statutory foreclosure process.  In Utah this means recording a notice of default and election to sell (“NOD”) the property with the county recorder in the county in which the property is located.  The lender must then wait a minimum of 3 months after the recordation to take the next step of publishing the date, time and location of a trustee’s sale.  The notice of sale must also be posted on the property.  The sale date cannot be any sooner than 20 days and no longer than 45 days after the final publication.   If the lender proceeds as fast as statutorily possible it will take approximately 121 days after the NOD to complete the process.

Can the Lender Sue Me After Foreclosure for A Deficiency?

Yes. Unlike many other states that have anti-deficiency statutes (prevents lenders from suing a borrower personally after foreclosure), Utah permits lenders to pursue a deficiency after foreclosure if the lender files suit or otherwise provides notice to the borrower that they intend to pursue the deficiency within 90 days of the foreclosure sale.  The 90-day notice requirement does not apply to junior mortgages when the senior forecloses on the property.  When this happens the junior mortgage is considered “foreclosed out”.  The junior mortgage has the full statute of limitations period to bring a recovery action.  The junior mortgage must wait until the senior lender has actually foreclosed, however.  The attorneys at Weekes Law have successfully defended against a junior lender who tried to sue the borrow before senior lender foreclosed arguing that the property was worth less than the amount owed to the senior lender.  Chapter 7 or chapter 13 bankruptcy is usually the best way to deal with a deficiency or other collection action for unsecured debt when a negotiated solution isn’t feasible.

Will Bankruptcy Stop Foreclosure?

When a bankruptcy petition is filed with the court, an automatic stay prevents lenders from continuing collection activities—including foreclosure.  This may only temporarily stop the foreclosure process, however, unless the borrower files for chapter 13 bankruptcy, begins making regular payments, and repays the arrearages as part of the chapter 13 plan, modifies the mortgage, or otherwise brings the mortgage current.

The experienced debt relief attorneys with Weekes Law can help you determine the best course of action in your circumstances.  Contact us today for a free Utah bankruptcy evaluation.