The first thing that a borrower facing foreclosure in Utah must understand is the legal process surrounding foreclosure. A borrower must know whether the state where his/her real property is located in a judicial or non-judicial foreclosure state. The difference being a judicial foreclosure state requires foreclosures to be processed through the court system. In this system, the lender will file a complaint, which the borrower will be given notice of and have an opportunity to be heard in court. In contrast, a non-judicial foreclosure state allows a lender to initiate foreclosure proceedings outside of the court system pursuant to requirements set in state statute. Lenders are given much more power in the foreclosure process in a non-judicial foreclosure state. Utah allows for judicial or non-judicial foreclosure. Learn more about the Utah foreclosure process.
The Utah Foreclosure Process
In addition to knowing which foreclosure system applies to your mortgage it is important to know the following terms and how they can apply to your mortgage:
(1) Quiet Title
this is an action which can be initiated to remove a cloud of title from real property and allow the plaintiff to establish his/her right to the property against all others. This can be used by a borrower to establish title to the property when the lender cannot produce a note evidencing the lien.
(2) Forensic Audit
This tool is provided by experienced professionals who examine all of the documents surrounding a mortgage to make sure that the lender has complied with all applicable laws and regulations. A forensic audit can be a very important tool to a borrower fighting foreclosure.
This is a term which describes the practice of lenders who assemble mortgages into pools and create financial instruments secured by these mortgages to sell to investors. The financial instruments created by this process are called mortgage-backed securities (MBS).
(4) Lost Note
This term refers to the common practice of lenders asserting that a borrower’s mortgage note has been lost and therefore cannot be produced to the court in a foreclosure proceeding. This has become a common practice due to the frequent transfer of mortgage notes and lack of proper documentation.
(5) Improperly Transferred Note
This term refers to the common practice of lenders disregarding state law in the transfer of mortgage notes. State laws require mortgage note assignments to be recorded in the proper county offices. It has become common practice for lenders to ignore this requirement due to the desire to sell mortgages as quickly as possible through various entities.
(6) Lender Liability
This term refers to the possibility of a borrower being able to seek damages against a lender who engages in impermissible practices regarding the borrower’s mortgage. Due to the mass securitization of mortgages and careless documentation by lenders, borrowers may now have more grounds to assert lender liability.
Borrowers facing foreclosure require help from an experienced legal professional who can navigate the complexities involved in the foreclosure process. Contact us today for the legal guidance that you need in order to save your home.