In Utah, facing foreclosure can be frightening, so if you’re a homeowner in this situation, know you’re not alone. It can be overwhelming to not know what to do or where to turn for help if you are falling behind on payments or already being threatened with foreclosure.
This blog post will explain the Utah foreclosure process and your options if you find yourself facing foreclosure. Additionally, you will learn how to prevent foreclosure. Keep reading for more information about the foreclosure process, whether it’s your first time facing foreclosure or just curious about how it works.
What is a Foreclosure, and How Does it Work in Utah?
In a foreclosure, a lender tries to recoup loan balances by forcing borrowers to sell the collateral. With some exceptions, lenders cannot begin foreclosure proceedings until you are 120 days past due on your payments. A 120-day window gives most homeowners sufficient time to submit a loss mitigation application.
How to Avoid Foreclosure
Even if you are facing financial difficulties, you may still be able to avoid foreclosure in Utah.
Make a Deal With Your Lender
It is always a good idea to speak with your lender first. If you explain your financial situation, you may be able to make smaller payments over time.
Request a Loan Modification
You may be able to obtain a loan modification if you are having trouble making your mortgage payments. Term changes, such as interest rates or repayment periods, can be made in a loan modification.
Sell Your Home
If your finances are tight and you can’t find a way out, selling your home may be the answer. It may not be easy, but you can avoid foreclosure and damage to your credit by making this decision.
How to Stop Foreclosure
If you’re already in the foreclosure process, you can stop it in three ways.
Reinstate the Loan
Utah law allows you to reinstate a defaulted loan within three months of the trustee’s recording. In addition, you may have more time to reinstate under a deed of trust. Make sure you check the paperwork you signed when you took out the loan to see if you have more time to catch up on past-due payments and when you can reinstate it. You can also contact your loan servicer to ask if the lender will allow your reinstatement.
Redeem the Property
In some states, foreclosed borrowers can also buy back their homes after the foreclosure sale. Foreclosed homeowners in Utah don’t have a right of redemption after a nonjudicial foreclosure, however.
File for Bankruptcy
While bankruptcy may not be the best solution for every situation, it can delay the foreclosure process by several months, allowing the homeowner to avoid foreclosure. Contact a local bankruptcy attorney to learn more about your options.
What to Do if Foreclosure is Unavoidable
Foreclosures should always be handled by a qualified professional. A good understanding of your family’s rights and options is essential to achieving the best outcome.
The Judicial Foreclosure Process in Utah
Defaulting on your mortgage payments may result in your lender foreclosing on your property judicially or nonjudicially.
Judicial Foreclosures
A judicial foreclosure is initiated by a lawsuit filed by a lender seeking an order to allow a foreclosure sale. Lenders automatically win cases if they don’t receive a written response from the borrower. You may, however, defend the foreclosure lawsuit, in which case the court will review the evidence and determine who wins. Your home will be auctioned if the lender wins the case.
Nonjudicial Foreclosures
Nonjudicial foreclosures are completed according to state statutes if the lender chooses to proceed this way. As soon as the lender completes the required steps, the home can be sold in a foreclosure sale. Since the nonjudicial process is quicker and cheaper than litigation, most lenders prefer it.
The Consequences of Foreclosure
The repercussions of foreclosure can be damaging to homeowners and their communities. A foreclosure can cause homeowners to lose their homes and damage their credit scores, making it challenging to apply for a new home or line of credit. Furthermore, foreclosure is a time-consuming and emotionally draining process.
Communities can also be negatively affected by foreclosures. Foreclosures can cause property values to decline, resulting in a loss of tax revenue and increased crime.
Assistance for Homeowners Facing Foreclosure in Utah
The U.S. Department of Housing and Urban Development offers homeowners foreclosure prevention assistance and guidance.
Avoid Foreclosure in Utah by Selling Your House for Cash
A home sale may offer you the solution you need if you face foreclosure or have difficulty paying your mortgage. At Favor Home Solutions, we understand the challenges you are facing. For this reason, we are committed to helping you get the best price for your home and guiding you through the entire process.
To accomplish this, our team will:
- Evaluate your situation and make you a fair, all-cash offer
- Close on the date of your choice
- Take care of all the paperwork
- Pay all the closing costs
- Handle cleaning and repairs
- And more!
If you’re interested in learning more about getting a free, no-obligation offer for your home, contact us today!
