 Summary of a Utah Foreclosure Documents Needed to Begin Foreclosure 1. Copy of the RECORDED Deed of Trust The vast majority of real estate loans in Utah are secured by a Trust Deed, as opposed to a Mortgage. Occasionally a Trust Deed if foreclosed judicially. (For example, if a deficiency is anticipated, it is normally recommended that the Trust Deed be foreclosed judicially. This is discussed below.) For the most part, however, foreclosure in Utah is under private sale conducted by a Trustee. Generally, a mortgage, as opposed to a deed of trust, must be judicially foreclosed. The Trustee is designated under the terms of the original Trust Deed. The recording of a “Substitution of Trustee” in the county real estate records may change the Trustee. Normally, this law firm will be substituted as Trustee at the commencement of the foreclosure process. Upon receipt of the file, a foreclosure report is ordered from a title company. The foreclosure report and file are reviewed to determine what parties should receive notice of the proceedings. The "Substitution of Trustee" and "Notice of Default" are recorded and copies of the same are mailed within 10 days to the proper parties. This mailing is by registered or certified mail, postage prepaid. After the recording of the "Notice of Default", a statutory cure period follows in which the Trustor, his successor in interest or anyone having a junior lien or encumbrance may cure the default on the loan. Once the three-month cure period has past, notification of the Trustee's sale is provided by mailing, posting and publication. The mailing is by registered or certified mail, postage prepaid. The same parties who were entitled to a copy of the "Notice of Default" are entitled to a copy of the "Notice of Trustee's Sale". (The separate notification to the IRS, if appropriate, is mentioned below). Notice by posting is given by posting the property in a conspicuous place and by posting upon three public places in the county. Notice by publication is by publication in a newspaper of general circulation in the county three times, once a week for three consecutive weeks. The last such publication must be at least 10 but not more than 30 days before the date of sale. If an IRS lien has been recorded (at any time up to 30 days before sale), a separate notice must be given to the IRS and it is allowed a 120-day redemption period after the sale. The sale is held at the courthouse between the hours of 9:00 a.m.
and If a deficiency action is sought after completion of the private sale, a judicial action for that deficiency must be commenced within three months after the sale. The court will require proof of the fair market value of the property. The court will not enter judgment for more than the amount by which the total Indebtedness (including attorney's fees and other costs and expenses of sale) exceeds the fair market value of the property. Since the debtors must be served in this action and many of the same matters must be addressed as would in a judicial foreclosure, it is normally more efficient just to conduct a judicial foreclosure sale, instead of conducting a private sale with a subsequent deficiency action, if it is known at the outset that a deficiency will be sought. |
| Utah Capital – Salt Lake City The Beehive State Non-Judicial Utah State Bar: 5370 1/89 Foreclosure *Cannot postpone more than 72 hours
after original sale date. |
