Utah Foreclosure Laws
Quick Facts
- Judicial Foreclosure Available: Yes
- Non-Judicial Foreclosure Available: Yes
- Primary Security Instrument: Deed of Trust, Mortgage
- Timeline: Varies
- Right of Redemption: Yes
- Deficiency Judgments Allowed: Yes
In Utah, lenders may foreclose on a mortgage in default by using the judicial foreclosure process.
Judicial Foreclosure
The judicial foreclosure process is one in which the lender must file a complaint against the borrower and obtain a decree of sale from a court having jurisdiction in the county where the property is located before foreclosure proceedings can begin. Generally, if the court finds the borrower in default, they will give them a set period of time to pay the delinquent amount, plus costs. If the borrower does not pay within the set period of time, the court will then order the property to be sold in the manner of normal execution sales.
Non-Judicial Foreclosure
The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".
Power of Sale Foreclosure Guidelines
If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:
- A notice of sale must be published once a week for three (3) consecutive weeks in a newspaper of general circulation in the county where the property is to be sold. The last publication must be at least ten (10) days but not more than thirty (30) days before the date of sale is scheduled.
- The notice of sale must also be posted, at least twenty (20) days before the date of sale is scheduled, in some conspicuous place on the property to be sold and at the office of the county recorder of each county in which the property is located.
- The place of sale must be clearly advertised in the notice of sale and the sale must be held between the hours of 8 am and 5 pm.
- Borrowers do have a right of redemption in Utah, but the court may extend the redemption time past the time allowed in regular judgments so there is no set length of time.
It is possible to obtain a deficiency judgment against the borrower for the difference between the amount the borrower owed on the original loan and the foreclosure sale price and the lender may be able to seize the property until the differing amount is paid.
57-1-21. Trustees of trust deeds -- Qualifications.(1) (a) The trustee of a trust deed shall be:
(i) any active member of the Utah State Bar who maintains a place within the state where the trustor or other interested parties may meet with the trustee to:
(A) request information about what is required to reinstate or payoff the obligation secured by the trust deed;
(B) deliver written communications to the lender as required by both the trust deed and by law;
(C) deliver funds to reinstate or payoff the loan secured by the trust deed; or
(D) deliver funds by a bidder at a foreclosure sale to pay for the purchase of the property secured by the trust deed;
(ii) any depository institution as defined in Section
7-1-103, or insurance company authorized to do business and actually doing business in Utah under the laws of Utah or the United States;
(iii) any corporation authorized to conduct a trust business and actually conducting a trust business in Utah under the laws of Utah or the United States;
(iv) any title insurance company or agency that:
(A) holds a certificate of authority or license under Title 31A, Insurance Code, to conduct insurance business in the state;
(B) is actually doing business in the state; and
(C) maintains a bona fide office in the state;
(v) any agency of the United States government; or
(vi) any association or corporation that is licensed, chartered, or regulated by the Farm Credit Administration or its successor.
(b) For purposes of this Subsection (1), a person maintains a bona fide office within the state if that person maintains a physical office in the state:
(i) that is open to the public;
(ii) that is staffed during regular business hours on regular business days; and
(iii) at which a trustor of a trust deed may in person:
(A) request information regarding a trust deed; or
(B) deliver funds, including reinstatement or payoff funds.
(c) This Subsection (1) is not applicable to a trustee of a trust deed existing prior to May 14, 1963, nor to any agreement that is supplemental to that trust deed.
(d) The amendments in Laws of Utah 2002, Chapter 209, to this Subsection (1) apply only to a trustee that is appointed on or after May 6, 2002.
(2) The trustee of a trust deed may not be the beneficiary of the trust deed, unless the beneficiary is qualified to be a trustee under Subsection (1)(a)(ii), (iii), (v), or (vi).
(3) The power of sale conferred by Section
57-1-23 may only be exercised by the trustee of a trust deed if the trustee is qualified under Subsection (1)(a)(i) or (iv).
(4) A trust deed with an unqualified trustee or without a trustee shall be effective to create a lien on the trust property, but the power of sale and other trustee powers under the trust deed may be exercised only if the beneficiary has appointed a qualified successor trustee under Section
57-1-22.