Foreclosure, Mortgage Fraud & Predatory Lending
If you do not make your mortgage payments, your mortgage lender may start foreclosure proceedings. Once your home is foreclosed you no longer own it, and the lender can sell it to recover the amount you owe on your loan.
Foreclosure, mortgage fraud and predatory lending matters can be complicated. Please consider talking to a housing education counselor (utahforeclosureprevention.com) or an attorney to go over your options.
See our Finding Legal Help page for information about ways to get legal help. One way to talk to an attorney is to visit a free legal clinic. Clinics provide general legal information and give brief legal advice. You might also hire an attorney for just part of your case or to do one particular thing, rather than represent you for the whole case. Legal help is also available at discounted rates for people with modest incomes.
- Directory of Utah Housing Education Counselors (utahforeclosureprevention.com)
- Foreclosure Prevention Workbook (utahforeclosureprevention.com) - PDF
- Mortgage Loan Tips (dfi.utah.gov)
- Utah Division of Consumer Protection (consumerprotection.utah.gov)
- Utah Attorney General (attorneygeneral.utah.gov)
- Utah Foreclosure Laws - Utah Code §78B-6-901 to 909
- Utah Foreclosure Prevention Taskforce (utahforeclosureprevention.com)
- Utah Legal Services Foreclosure Information (utahlegalservices.org)
Tenants of Foreclosed Properties
If you are renting a house or an apartment that is being foreclosed, the Helping Families Save Their Homes Act of 2009 (frwebgate.access.gpo.gov) (P.L. 111-22) may provide some help. Title VII of this federal law gives some tenants the right to stay in a foreclosed property up to 90 days after the date of foreclosure or through the end of their lease, depending on whether the property will be used as a primary residence by the new owner. Contact an attorney who handles foreclosure or housing cases to see if this law may apply to your situation.
Excess proceeds from trustee's sale
When real property is sold at a trustee's sale (such as in the case of a mortgage foreclosure), the property might be sold for more than was owed. If this happens, the trustee may deposit the excess proceeds with the district court in which the sale took place and leave it to the court to decide who is entitled to those funds. See our Petition for Adjudication of Priority to Funds on Trustee's Sale web page for more information about this process.
Additional Foreclosure Resources
- Tips for Avoiding Foreclosure (hud.gov)
From the U.S. Department of Housing and Urban Development (HUD)
- HUD-Approved Housing Counseling Agencies in Utah (hud.gov)
Housing counseling agencies provide advice on buying a home, renting, defaults, foreclosures, credit issues, and reverse mortgages.
- Foreclosure Resources for Consumers (federalreserve.gov)
From the U.S. Federal Reserve Board
Buying Foreclosed Property
Interested in purchasing a foreclosed home? Also consider homes in the pre-foreclosure stage, or homes that are owned by banks or government agencies.
Much of the buying and selling process is governed by contract and custom, not state laws. However, Utah law does dictate when and where the notice of default and the notice of trustee sale must be filed and published.
A home is in the pre-foreclosure stage if it has not been sold at auction or repossessed by the bank. The homeowner still has title to the property. Purchasing a home at this stage is similar to the regular process of buying a home: you can usually arrange for an inspection and view the property yourself.
Have your eye on a particular home? If you think the home is about to be foreclosed, request that the county recorder mail you a copy of the notice of default after it is filed by the bank. Utah Code §57-1-26. Also, watch for the notice of sale in the newspaper where the property is being sold-the notice must be published at least three times, once a week, for three consecutive weeks, and at least ten days but not more than 30 days before the scheduled date of sale. Utah Code §57-1-25. A notice of sale is also posted at least 20 days before the date of sale in the county recorder's office. Utah Code §57-1-25.
You can also locate notices of trustee sales at Utah Legal Notices (utahlegals.com) a service of the Utah Press Association.
Foreclosed homes are sold at auctions which are usually held at the local district courthouse. The notice of sale details the specific location. Utah Code §57-1-25. An attorney or title company acts as trustee for the bank, and administers the auction. The trustees also maintain lists of foreclosed properties to be sold at upcoming auctions and many post this information on their websites, including opening bid information. Check with trustees to determine if a sale has been canceled or postponed.
The trustee decides how much money is required as a deposit after you make the winning bid at auction. Typically a $5,000 cashier's check is due at the time of sale with the balance due 24 hours afterward.
Sometimes you are the only person who bids on the property and the trustee will accept the listed opening bid, or $1 over the opening bid, as the winning amount. If several people are bidding for the same property, the trustee will likely raise the bid increments from $1 to $100.
If the home was not sold at the foreclosure auction, the home becomes the property of the bank. You can locate bank-owned property through a realtor or through the local county recorder's office.
The following is a list of agencies that own homes where a buyer has defaulted on a government-insured loan, where the agency purchases foreclosed homes to finance other ventures, or seizes property because of illegal activity or nonpayment of federal taxes.
- Department of Agriculture
- Department of Treasury
- Department of Veterans Affairs
- Fannie Mae
- FDIC (Federal Deposit Insurance Corporation)
- Freddie Mac
- General Services Administration
- Housing and Urban Development (HUD)
- Internal Revenue Service
Your county auditor may hold a yearly tax sale where property is auctioned off because the homeowner has failed to pay their local property tax for the proceeding five years. Proceeds from the tax sale are used to pay off property taxes. Locate tax sale information in the local county auditor's office. The tax sale is overseen by the local sheriff's office and is slightly different than the trustee sale discussed above.
- Department of Agriculture (resales.usda.gov)
- Department of Treasury (treasury.gov)
- Department of Veterans Affairs (homeloans.va.gov)
- Fannie Mae (homepath.com)
- FDIC (fdic.gov)
- Freddie Mac (homesteps.com)
- General Services Administration (propertydisposal.gsa.gov)
- HUD (hud.gov)
- Homes for Sale by the U.S. Government (homesales.gov)
- IRS (treasury.gov)
Mortgage Fraud & Predatory Lending
- Predatory Lending (hud.gov)
From the U.S. Department of Housing and Urban Development