If you’re behind on mortgage payments and your house is on the brink of foreclosure, you’re likely feeling stressed, overwhelmed, and worried about the road ahead. While the foreclosure process may feel entirely out of your control, you may have options. In some cases, you can sell your house to avoid foreclosure in Utah.
Learn more about this process and how Brick House Buyers makes selling to avoid foreclosure simple.
What Is Foreclosure in Utah?
Foreclosure is a legal process that begins when your lender believes you have not made your mortgage payments. When you miss a certain number of payments, your lender will initiate foreclosure, which can ultimately allow the bank to seize your home and evict you.
Foreclosure is not an immediate process, and you have several options for how to proceed, even if you cannot make your mortgage payments. In some cases, you may choose to avoid foreclosure in Utah by selling the home to a buyer, then using the proceeds to pay off your balance to the lender.
Utah’s Foreclosure Process and Timeline
Several steps need to happen between when you miss a mortgage payment and when the bank forecloses your home. Understanding where you are in the process can help you determine your options for proceeding.
- Step 1: Notice of Delinquency. When you fail to make a monthly mortgage payment on time, your mortgage becomes delinquent, and the loan enters “default” status. At this stage, your lender should provide a Notice of Delinquency with information about your balance and what will happen next if you do not make the required payments by the deadline.
- Step 2: Pre-Foreclosure Notice. Next, the lender would mail you a notice that your mortgage will enter foreclosure without further action. They must provide at least 30 days to become current on the loan and give you a “single point of contact” with whom you can speak about the loan. Federal law also prevents mortgage services from initiating foreclosure before a loan is 120 days overdue.
- Step 3: Notice of Default. This is the stage in which the foreclosure process officially begins. The lender would record a Notice of Default at the County Recorder’s office and would need to send you a copy of the notice within 10 days. The Notice of Default gives you three months to get current with your payments and pay any fees associated with the foreclosure.
- Step 4: Notice of Trustee’s Sale​​​​​. If you do not become current on the loan within three months, the lender will record a Notice of Sale with the County Recorder’s office. You will receive a copy of this notice in the mail at least 20 days before the sale. The lender will also publish the notice in the newspaper.
- Step 5: Foreclosure Sale. Finally, your property will be auctioned to the highest bidder. The highest bidder is often the lender that is foreclosing on the property. The lender can bid the amount you owe on your mortgage, and if this is the highest bid at the sale, the mortgage company becomes the new owner of the property.
- Step 6: Deficiency Judgment and Eviction. If the property sells for less than you owe on your mortgage, you may be required to pay the difference, along with fees. The lender can initiate a deficiency judgment by filing a lawsuit within three months of the sale. If you do not vacate the property after the foreclosure sale, the new owner can initiate the eviction process.
As you can see, you generally have at least four months between when you miss a mortgage payment and when you would be at risk of being evicted from your home. During this time, you can explore your options.
What Are Your Options When Your House Is Facing Foreclosure?
Can you sell your house to avoid foreclosure in Utah? Yes, this may be an option, depending on whether you can find a buyer. You can generally try to sell your house up until it has entered a foreclosure sale. However, the exact terms and timeline may vary depending on your lender.
You can avoid foreclosure in Utah by selling your house, but you also have several other options to explore.
Declaring Bankruptcy
Declaring bankruptcy could allow you to avoid foreclosure, depending on whether you qualify for the terms of the bankruptcy. In Utah, Chapter 13 bankruptcy provides you with a payment plan of three or five years to catch up on payments in arrears, including mortgage payments. Your lender would need to pause the foreclosure process until the end of this period.
However, Chapter 13 bankruptcy comes with its own consequences. Bankruptcy can severely impact your credit score and limit your financial freedom. Failing to make the payments according to your payment plan can lead to your case being dismissed, which allows your lender to continue the foreclosure process.
Working Out a Payment Plan With the Lender
If you are going through temporary financial difficulties but believe you will be able to afford your mortgage again soon, you can consider trying to work out a payment plan with the lender. Contact your lender and explain your situation to them as soon as possible. They may be able to modify your loan so you can afford the payments or provide you with a payment plan that gives you more flexibility.
Selling the Property in a Short Sale
One of your options for curing a mortgage default during pre-foreclosure is selling the home in a short sale. This means that you work out a deal with the lender to sell the home for less than you owe. Your lender would need to approve the short sale and permit you to pay off your balance for less than the total amount using the proceeds from the sale.
Exploring short sale options for distressed homeowners makes sense in some cases, but not all lenders agree to a short sale.
Selling Your Home on the Market
You can also list your home for sale on the real estate market while it is in pre-foreclosure. This would ideally provide you with enough cash to pay off your balance to the lender and walk away without facing eviction or other penalties. Depending on how much equity you have in your home, you may even gain a profit that you can use toward your next residence.
You can try to sell your home on the market to avoid foreclosure, but you may have trouble finding a buyer. Buyers are often wary of homes in foreclosure and would rather avoid them. If you want to sell your home to avoid foreclosure, you need to do so within the lender’s timeline. This can be challenging if you struggle to find a buyer, or if a sale falls through once an interested party learns about the home’s foreclosure status.
Selling to a Cash Buyer
Perhaps the easiest way to avoid foreclosure in Utah by selling the house is to offer it to a cash buyer, such as Brick House Buyers. Cash buyers purchase homes in any condition and status, including homes facing foreclosure.
Selling to a cash buyer is often much faster than trying to sell your home on the market. Cash buyers make an offer within 24 hours and can often close on the house within a week. If you are nearing the end of the lender’s three-month window to become current on your home, selling to a cash buyer may be your best and only option to avoid foreclosure.
Initiating a Deed in Lieu of Foreclosure
If you aren’t interested in selling your house to avoid foreclosure in Utah, you might consider transferring your property to the lender directly. This avoids the public foreclosure process, in which notice of foreclosure would be posted in the newspaper, and buyers would be able to bid on it. Transferring the deed to the lender streamlines the process while helping you maintain privacy.
Letting the Bank Sell for You
Your final option when your house is facing foreclosure is to do nothing. If you do not act, the lender will continue with the foreclosure process, ultimately selling your property to the highest bidder at a foreclosure sale. If the property sells for less than what you owe, there may be a deficiency that you will be responsible for paying.
Sell Your House To Avoid Foreclosure With Brick House Buyers
If you are exploring ways to avoid foreclosure in Utah, Brick House Buyers can help you understand your options. We buy homes in any condition, including those in foreclosure, across Utah and neighboring areas.
We’ll provide a cash offer within 24 hours, pay all closing costs and fees, and close on your timeline. We can even communicate with your mortgage lender directly to stop the foreclosure process. You can use the proceeds from the sale to pay off your mortgage balance and start moving forward.
Request your free cash offer from Brick House Buyers today by calling 801-618-0602 or filling out our online form.