Utah Foreclosure Laws

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Utah Foreclosure Laws

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Utah Foreclosure is Non-Judicial.

Utah Foreclosure statutes, which model the California Act, have been in place since 1961. Because the private power of sale has been conferred on trustees of real estate Trust Deeds by Utah Code, Trust Deeds in Utah are foreclosed non-judicially. The entire process takes approximately four and one-half months, the detail of which is included in subsequent paragraphs.

The foreclosure work is commenced on a file once the referral package is received. This should include a current status sheet on the loan, copies of the Trust Deed Note, Trust Deed, all assignments, title policy and Mortgage Insurance Certificate (if available) and possibly the Substitution of Trustee. If your Utah foreclosure referral package includes the Substitution of Trustee, the Notice of Default will be immediately prepared and both documents recorded within 10 days of the date the referral is received. Preparing the Substitution and sending it back for execution by overnight mail will add approximately two weeks to the time before recording the Notice of Default.

After recording the Substitution of Trustee and Notice of Default, copies of these papers must be mailed to the Trustors, as well as all others who have recorded a written request for the receipt of any notices filed, within 10 days of the recording date. As a matter of practice, notices are mailed to all persons appearing to have an interest in the property as determined by the foreclosure title report.

Sale of trust property -- Power of trustee -- Utah Foreclosure of trust deed.

Utah foreclosure law states that the trustee is given the power of sale by which the trustee may exercise and cause the trust property to be sold, after a breach of an obligation for which the trust property is conveyed as security; or, at the option of the beneficiary, a trust deed may be foreclosed in the manner provided by law for the foreclosure of mortgages on real property. The power of sale may be exercised by the trustee without express provision for it in the trust deed.

Sale of Trust Property by Trustee -- Utah Foreclosure Notice of Default.

The power of sale conferred upon the trustee may not be exercised until:
(1) the trustee first files for record, in the office of the recorder of each county where the trust property or some part or parcel of the trust property is situated, a notice of default, identifying the trust deed by stating the name of the trustor named in the trust deed and giving the book and page, or the recorder's entry number, where the trust deed is recorded and a legal description of the trust property, and containing a statement that a breach of an obligation for which the trust property was conveyed as security has occurred, and setting forth the nature of that breach and of the trustee's election to sell or cause to be sold the property to satisfy the obligation;

(2) not less than three months has elapsed from the time the trustee filed for record under Subsection (1); and

(3) after the lapse of at least three months the trustee shall give notice of foreclosure sale

Notice of Trustee's Sale -- Description of Property -- Time and Place of Utah
Foreclosure Sale.

The trustee shall give written notice of the time and place of Utah foreclosure sale particularly describing the property to be sold:
(a) by publication of the notice:
(i) at least three times;
(ii) once a week for three consecutive weeks;
(iii) the last publication to be at least ten days but not more than 30 days before the date the sale is scheduled; and
(iv) in a newspaper having a general circulation in each county in which the property to be sold, or some part of the property to be sold, is situated; and

(b) by posting the notice:
(i) at least 20 days before the date the sale is scheduled; and
(ii) (A) in some conspicuous place on the property to be sold; and
(B) at the office of the county recorder of each county in which the trust property, or some part of it, is located.

(2) (a) The sale shall be held at the time and place designated in the notice of sale.
(b) The time of sale shall be between the hours of 8 a.m. and 5 p.m.
(c) The place of sale shall be clearly identified in the notice of sale under Subsection (1) and shall be at a courthouse serving the county in which the property to be sold, or some part of the property to be sold, is located.
(d) High bidder must pay $5000 down and the remaining sale price within 24 hours.

(3) The notice of Utah foreclosure sale shall be in substantially the following form:

Utah Foreclosure Notice of Trustee's Sale

The following described property will be sold at public auction to the highest bidder, payable in lawful money of the United States at the time of sale, at (insert location of sale) ________________on __________(month\day\year), at __.m. of said day, for the purpose of foreclosing a trust deed originally executed by ____ (and ____, his wife,) as trustors, in favor of ____, covering real property located at ____, and more particularly described as: (Insert legal description)

The current beneficiary of the trust deed is ______________________ and the record owners of the property as of the recording of the notice of default are _________________ and ____________________. Dated __________(month\day\year). _______________

Trustee

The Trustors, fee title owner or any creditor has the right to reinstate the loan delinquency within three months after the date of recording by paying all delinquent installments, late charges, inspection fees and the foreclosure fees and costs. If not reinstated during this three month period, the matter is set for a Trustee's Sale which takes place four or five weeks after the end of the reinstatement period. It is optional with the beneficiary whether a reinstatement will be accepted after the three month reinstatement period has ended. However, the V.A. regulations require the beneficiary to accept a reinstatement right up to the time of sale, and H.U.D. strongly recommends it.

After the sale takes place, a Trustee's Deed to the successful bidder will be prepared. This is usually H.U.D., V.A. or the beneficiary of the conventional loan. Trustee's Deeds on conventional loans will be prepared and sent for recording approximately one week following the sale. On V.A. loans, the Trustee's Deed is recorded in the name of the beneficiary and a Special Warranty Deed from the beneficiary to the V.A. is subsequently recorded. The V.A. requires that both deeds be recorded within seven days following the date of sale. Due to H.U.D. regulations that need to be met, the Trustee's Deeds on F.H.A. loans is prepared immediately, but awaits approval before being recorded.

At the time the Trustee's Deed is recorded, the necessary title work is ordered to show clear title to the purchaser. Experience has shown that it may take ten days to obtain the title packages.

As soon as the final title package is received, a copy is sent to the client’s office, along with the foreclosure bill. The original title package is mailed to F.H.A. or the V.A. as appropriate. This completes the Utah foreclosure process.

Occasionally this process is interrupted by bankruptcy, an eviction, or title problems. Mortgages are also valid in Utah, but are not often used. The foreclosure of a mortgage requires court action. Only one or two percent of Utah loans are secured by Mortgages rather than Trust Deeds. The process of foreclosing a Mortgage takes approximately eight and one-half months.

Utah Foreclosure Non-Judicial Trust Deed Timeline

Week 1

The file is opened the day it is received and reviewed. It is assigned a file number and entered into a computer system. If a Substitution of Trustee is received with the referral package, a Notice of Default is then prepared and recorded within ten days of receipt of the referral. If a Substitution is not included with the referral, one is prepared and sent to the client for execution by overnight mail delivery.

Week 2

As soon as the documents are recorded, a foreclosure title report is ordered. A conformed copy of the recorded Notice of Default and Substitution of Trustee are mailed to the original trustors, present owners, and all other parties with a recorded interest by certified mail. The client is notified by letter of the recording date, when the three month reinstatement period will end, and the estimated sale date.

Week 15

At the end of the three month reinstatement period, the file will be pulled and set for a Trustee's Sale. The Trustee's Sale is held approximately five weeks after the reinstatement period ends. The Notice of Trustee's Sale is mailed to the original trustors, present owners, and all other parties with a recorded interest by certified mail. The Notice of Trustee’s Sale must be published in a newspaper having general circulation within the county the property is located, once a week for three consecutive weeks, the last publication being at least 10 days prior but not more than 30 days prior to the Utah foreclosure sale. The Notice of Trustee's Sale must also be posted on the property and 3 other public places within the same county the property is located at least 20 days prior to the sale. The client will be notified by letter of the sale date and will be asked for bidding instructions prior to the sale.

Week 20

The Trustee's Sale is held and a Trustee's Deed is prepared conveying the property to the highest bidder at the sale. If the property is purchased by HUD, the Trustee's Deed is held until notified to record it. A copy of the unrecorded deed is sent to the client for their claim. If it is a conventional loan, the Trustee's Deed is recorded immediately, and a conformed copy is sent to the client. If it is a VA loan, the Trustee's Deed is recorded in the name of the beneficiary and a Special Warranty Deed from the beneficiary to the VA is subsequently recorded. The VA requires both deeds to be recorded within seven days following the date of sale. A conformed copy of each document is sent to our client as well as to the VA. After the Trustee's Deed is recorded, a final title package is ordered which upon receipt is forwarded to the client, HUD or the VA, whichever applies.

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