Non-Judicial Foreclosure Process in Utah

NON-JUDICIAL FORECLOSURE PROCESS IN UTAH

(Foreclosure of Trust Deeds – Utah Code Ann. §§57-1-10 – 57-1-36)

1.  A Trustee conducting a non-judicial Trustee’s Sale must be qualified as a Trustee in the State of Utah.  Only a qualified Trustee is authorized to exercise the power of sale under a Trust Deed. Non-judicial sales are not conducted under the supervision of a court of law; accordingly, strict compliance with the statute is required.  The following persons and entities are authorized to act as a Trustee in the State of Utah:

a.  Any active member of the Utah State Bar who maintains a place of business within the state where the Trustor or other interested parties may meet with the Trustee to:

i.  Request information about what is required to reinstate or payoff the obligation secured by the trust deed

ii.  Deliver written communications to the lender

iii.  Deliver funds to reinstate or payoff the loan secured by the Trust Deed; or

iv.  Deliver funds by a bidder at a foreclosure sale to pay for the purchase of the property secured by the trust deed.

b.  Any depository institution as defined by Utah law, or insurance company authorized to do business and actually doing business in Utah under the laws of Utah or the United States.

c.  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.

d.  Any title insurance company or agency that:

i.    Is authorized to conduct insurance business in the state;

ii.  Is actually doing business in the state; and

iii.  Maintains a bona fide office in the state.

e.  Any agency of the United States government; or

f.  Any association or corporation licensed, chartered, or regulated by the Farm Credit Administration or its successor.

g.  The requirement of a bona fide office in the state is fulfilled if the person or company maintains a physical office in the State of Utah.

i.  That is open to the public

ii.  That is staffed during regular business hours and days

iii.  At which the Trustor may, in person, request a payoff and deliver funds, including reinstatement of default amounts.

2.  Upon being authorized by the beneficiary under the Trust Deed, The Trustee records a Notice of Default in the County (or Counties) in which the property tobe foreclosed is located. The Notice of Default must:

a.  Properly identify the Trust Deed being foreclosed including: the date of execution, recording information, Name of the Trustor, Tax Identification Number

b.  Contain the legal description of the property subject to the Trust Deed being foreclosed and

c.  A brief statement of the default alleged to have occurred.

3.  The Trustee must include with the Notice of Default (and a subsequent Notice of Sale).

a.  The name of the Trustee

b.  The mailing address of the Trustee;

c.  The address of a bona fide office of the Trustee where the Trustor can go in person to make payment or obtain information

d.  The hours during which the Trustee can be contacted regarding the Notice of Default (and Notice of Sale), which hours shall includeregular business hours in a regular business day; and

e.  A telephone number that the person may use to contact the Trustee during the hours the Trustee can be contacted.

4.  No later than ten (10) days after the date the Notice of Default is recorded, a copy of the Notice of Default (showing the recording information and date) must be mailed by certified or registered mail to the Trustor as set forth in the Deed of Trust and to each person or entity who has filed a Request for Notice of Default with regard to the property being foreclosed.

5.  After the Notice of Default is recorded, the Trustor has three (3) months from the date of recording to cure the default as described in the Notice of Default and reinstate the obligation secured by the Trust Deed.  A Request for a Reinstatement Statement must be received the Trustee at least ten (10) business days before the Trustee’s Sale in order to be timely.  After the expiration of the three (3) month period, the Beneficiary can declare due in full the entire amount secured by the Trust Deed.  A Request for a Payoff Statement is not timely unless the Trustee receives the request at least ten (10) business days before the Trustee’s Sale.

6.  Three (3) months after the recording date of the Notice of Default, the Trustee prepares and publishes a Notice of Sale in a newspaper of general circulation in each county in which the property is located.  The publication of the Notice ofSale must occur once each week for three (3) consecutive weeks.  The last publication must occur at least ten (10) days, but not more than thirty (30) daysprior to the sale of the property by the Trustee.

7.  The Notice of Sale must also be posted at least twenty (20) days prior to thedate of the sale of the property in a conspicuous place on the actual property tobe sold and at the office of the county recorder of each county in which theproperty is located.

8.  The Notice of Sale must be mailed by certified or registered mail to the Trustor as set forth in the Deed of Trust and to each person or entity that has filed a Request for Notice of Default with regard to the property being foreclosed.

9.  If the stated purpose of the obligation for which the Trust Deed was given as  security is to finance residential rental property, the Notice of Sale together with a “Notice to Tenant” must be posted:

a.     On the primary door of each dwelling unit on the property to be sold, if the property to be sold has fewer than nine dwelling units; or

b.     In at least two conspicuous places on the property to be sold, in addition to the posting required above, if the property to be sold has nine or more dwelling units.

10.  The Notice to Tenant must include a statement, in at least 14-point font, substantially as follows:

“Notice to Tenant – As stated in the accompanying Notice of Trustee’s Sale, this property is scheduled to be sold at public auction to the highest bidder unless the default in the obligation secured by this property is cured. If the property is sold, you may be allowed under federal law to continue to occupy your rental unit until your rental agreement expires, or until 90 days after the           date you are served with a notice to vacate, whichever is later.  If your rental or lease agreement expires after the 90-day period, you may need to provide a copy of your rental or lease agreement to the new owner to prove your right to remain on the property longer than 90 days after the sale of the property.  You must continue to pay your rent and comply with other requirements of your                 rental or lease agreement or you will be subject to eviction for violating your rental or lease agreement.
 The new owner or the new owner’s representative will probably contact you after the property is sold with directions about where to pay rent.  The new owner of the property may or may not want to offer to enter into    a new rental or lease agreement with you at the expiration of the period described above.”

11.  The failure to provide a “Notice to Tenant” does not invalidate a Trustee’s Sale.

13.  The sale of the property by the Trustee is conducted at the County Courthouse in the county in which the property is located.

14.  The Trustee, for any reason the Trustee deems expedient, can postpone the sale of the property for up to forty-five (45) days from the original date of sale asset forth in the Notice of Sale. No other notice of the postponed sale is required, unless the postponement exceeds 45 days. In that event, The Trustee must re-notice the sale in the same manner as the original Notice of Sale.

15.  Once the sale of the property is completed, the Trustee records a Trustee’sDeed conveying title to the property to the successful bidder at the Trustee’s Sale.

16.  The Trustor has no redemption rights after the sale of the property in a non-judicial foreclosure sale. 

17.  An action in court to recover the amount by which the balance due to the Beneficiary (including the full amount of the indebtedness, interests, costs, expenses of sale and trustee’s and attorney’s fees) exceeds the fair market value of the property as of the date of the sale (Deficiency Action) must be commenced within three (3) months of the date of the Trustee’s Sale.

18.  In the best of circumstances, the minimum time required to complete a non-judicial foreclosure sale, through the sale is 120 days.

Timeline – Non-Judicial Foreclosures, Utah

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About kathyafdavis

I have been practicing law in Utah since 1983. I have expertise in the areas of real property, contracts, business law, secured transactions, bankruptcy (creditor representation).
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