Utah Foreclosure Laws



How are trust deeds or mortgage liens treated in Utah?

Utah primarily operates as a title theory state where the property title remains in trust until payment in full occurs for the underlying loan. Foreclosure is a non-judicial remedy under this theory. The document that secures the title is a deed of trust or trust deed. Utah law also permits mortgages to serve as liens upon real property and for judicial foreclosures to occur through the courts.  Because the power of sale provisions in deeds of trust allow for a more expeditious process to effectuate foreclosure, this is the primary method used by lenders to foreclose.


How are Utah deeds foreclosed?

Primarily non-judicial foreclosure that does not involve court action is used in Utah. This requires that notice be given to the borrowers and the public, so this foreclosure method is commonly called sale of trust property by public auction. The trust deed usually contains a provision called a power of sale clause which allows a trustee to sell the property in order to satisfy the underlying defaulted loan.  In Utah there is no express requirement for the power of sale language to actually be in the trust deed.  Only certain parties or entities can serve as trustees, including attorneys, banks and title company officers. The trustee acts as a representative of the lender to complete the sale, which typically occurs in the form of an auction.  There are strict notice requirements inherent in the non-judicial foreclosure process.

Power of Sale Notice Requirements:

  1. Prior to initiating a foreclosure, the lender must file a notice of default in the county in which the property is located and with the defaulting borrower within three (3) months of the default. A copy of the notice of default must be published at least once a week for three (3) consecutive weeks in a newspaper of general circulation in the county, with the last notice of sale published at least 30 days before the proposed sale.  A notice of the proposed sale must also be recorded with the recorder where the trust property is located.
  2. The notice of default must contain certain information, including the date, time and place of sale, a description of the default, the lender's election to sell, and the document recording information from the deed of trust.
  3. Foreclosure sales must take place as a public auction between 9AM and 5PM on a business day at the time, place and date designated in the notice of sale. The trustee auctions the property to the highest bidder. The foreclosure sale may be postponed for 45 days from the original sale date if written notice is provided to the original recipient of the notice of default.

In Utah, the lenders can also go to court in a judicial foreclosure proceeding where the court must issue a final judgment of foreclosure. A complaint is filed in court along with a lis pendens. A lis pendens is a recorded document that provides public notice that the property is being foreclosed. Judicial foreclosure in Utah is an option which generally follows the same procedure as a non-judicial foreclosure, with the distinction that the process is pursued through the courts. The property is then sold as part of a publicly noticed sale.


What are the legal instruments that establish a Utah mortgage?

The documents are the trust deed, and in a commercial transaction, a security agreement. Sometimes the mortgage document is combined with the security agreement.  Alternatively, a mortgage is filed to evidence the underlying debt and terms of repayment, as set forth in the note.


How long does it take to foreclose a property in Utah?

Depending on the timing of the various required notices, it takes approximately 120 days to complete an uncontested non-judicial foreclosure. This process may be delayed if the borrower contests the action in court, seeks delays and postponements of sale, or files for bankruptcy.


Is there a right of redemption in Utah?

Utah has a post-sale statutory right of redemption for judicial foreclosures, which would allow the borrower to reclaim the property by making payment in full of the sum of the unpaid loan, plus costs. The court may extend the redemption period.


Are deficiency judgments permitted in Utah?

Yes. A deficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the loan amount which the underlying mortgage or deed of trust secures.


What statutes govern Utah foreclosures?

The applicable laws are found in Title 57 Utah Code (Conveyances) Chapter 1, et seq. Mortgage foreclosures are referenced in Title 78, Chapter 37.

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