Utah Foreclosure Prevention Efforts

For 2009, Utah ranked 5th among all states in foreclosure rate, an increase of 82.93% from the year before. Nationally, 2009 was the worse year for foreclosures in US history, with 2.8 million property owners receiving a foreclosure notice.

The overwhelming majority of Utah foreclosures are non-judicial because the mortgages contain a power of sale clause. The lender must file a Notice of Default with the county registrar and mail a copy to the homeowner. The homeowner then has three months to settle the debt. If the debt is not settled the lender can issue a Notice of Sale that must be published in a local newspaper for three weeks. The first notice must be published no more than 30 days before the sale takes place. Copies of the notice must be posted on the foreclosed property and at the office of the county recorder.

Sales are conducted at auction. Any excess past the amount of the primary mortgage gets distributed to second lenders. Unless it’s mandated by a court order, the homeowner has no right of redemption. The lender can also pursue a deficiency judgment against the borrower, meaning that if the sale price is less than the mortgage balance, the lender can sue the borrower to make up the difference.

The state stresses the following points to its distressed homeowners:

• Foreclosure prevention takes time, so it is vital to be proactive and beging preventative measures immediately. Residents falling behind on their mortgages should take action now. Contact your lender as soon as you recognize that you’re facing a payment problem.
• Open and respond to all mail from your lender.
• Know your mortgage rights.
• Understand your options.
• Contact a housing counselor. Utah residents can call 2-1-1 in-state to be directed to free housing counselors. You can find one through the Housing Education Coalition of Utah (HECU).  The U.S. Department of Housing and Urban Development, HUD posts its list of approved Utah agencies here.
• Prioritize your spending, drawing on all your assets to make your home payments.
• Don’t hire a for-profit foreclosure prevention company.
• Don’t fall victim to a home rescue scam.

In 2008 the state established the Utah Foreclosure Prevention Taskforce, comprised of Realtors and government agencies like the Utah Division of Housing and Community Development. It created a foreclosure prevention website and prepared a free foreclosure prevention workbook to walk distressed borrowers through the steps they should take to either keep or abandon their homes.

The state posts a list of foreclosure prevention events here. Links to other useful housing agencies are posted here.

If you are unable to reach your servicer or local state program, or if you would like additional assistance in this process contact Mortgage Outreach at 1-866-408-0420. Mortgage Outreach works directly with many servicers to help find solutions for borrowers that are struggling to keep up with their payments.