South Salt Lake is a city in Salt Lake County, Utah, United States and is part of the Salt Lake City Metropolitan Statistical Area. The population was 23,617 at the 2010 census. According to the United States Census Bureau, the city has a total area of 6.9 square miles (18 km2), all land. The city is bordered by the Jordan River on the west, 500 East and 700 East on the east, 2100 South on the north, and 3900 South on the south. West Valley City lies to the west, Salt Lake City to the north and northeast, and Millcreek to the east and south. Because of its location next to the Jordan River and well away from the mountains, it is mostly flat, only ranging in elevation from about 4,330 feet (1,320 m) to 4,380 feet (1,340 m). Since 2007, crime in South Salt Lake has been reduced by 30%. Former SSL Police Chief Chris Snyder attributes the drop in crime to 4- factors:
1) Increased attention to code enforcement,
2) Crime Free Rental Housing program that results in greater landlord scrutiny of potential renters,
3) Partnerships, such as that with United Way of Salt Lake, combined with community organizing, such as the Promise South Salt Lake initiative, South Salt Lake Community Connection that address resident needs and improve neighborhoods, and
4) Extensive youth development efforts, such as Promise afterschool programs delivered in nine Neighborhood Centers across the city, and urban/neighborhood revitalization projects. There is a new emphasis on redevelopment (including the Market Station development) and a reduction in the number of liquor licenses allowed to be issued is anticipated to reduce crime in the city.
Understand How Foreclosure Works
Whether you are a lender or a borrower, if you are involved with a mortgage that is arrears, you should know the foreclosure process. Foreclosure is the legal steps that a lender takes to recover arrears and principal on mortgage loan that is in default.
What is a Default that Starts the Foreclosure Process?
The most common default under a mortgage is the non-payment of regular mortgage payments. Legally, the foreclosure process may start after only one missed payment. Other types of default include, allowing damage to the property, failing to make tax payments, failing to insure the property, failing to make condo fee payments, etc. Call our team to find out if a particular action or inaction constitutes a default under your specific mortgage.
Who Pays for the Cost of Foreclosure?
All costs are paid by a borrower in a foreclosure action. As part of the foreclosure process, costs can include (but are not limited to) lawyers, process servers, appraisers, realtors, property managers, repairs, etc. The mortgage agreement allows the lender to add all costs it incurs to the debt owed by the borrower. This is important as a lender (or insurer) can pursue a deficiency judgment in certain circumstances. Two examples are commercial borrowers and CMHC or other insured mortgages. This means that the lender may seek payments from the borrower’s assets, wages, etc for any amount owing after the sale is finalized.
Typical Steps In Foreclosure Process
Lenders will usually initiate communication on a first missed payment. Some lenders will call while others will mail a letter notifying you of the missed payment. If the borrower can immediately repay the arrears, this typically ends the foreclosure process. Borrowers should not ignore this communication. Some mortgages have provisions for a single missed payment if there is a situational issue. Missed payments (NSF) usually have a financial cost to them ranging from $50-$150.
In the foreclosure process a demand letter is usually sent after the second missed payment. This letter can be sent by the lender directly, a collections company or a lawyer. In all instances this letter will state that if arrears are not paid up, a foreclosure will be commenced against the land owner.
Filing of a foreclosure claim
In Utah, foreclosures are started by way of a statement of claim. The claim is filed in the Court of Queen’s Bench. Once this stage of the foreclosure process is started, a borrower will be liable for more significant costs as most lawyers provide for a borrower to pay all costs associated with the foreclosure process. The lawyer starting the action wills the file a notice on the title to the property. This notice will let other lenders secured on title know that a foreclosure action has been started.
Borrowers Potential Actions in the Face of Foreclosure
These are the typical borrower’s options. Also watch our video on borrower’s options when faced with foreclosure in Utah.
Repay the arrears
In Utah, a borrower in arrears maintains a right of redemption. Up until the final order is granted by the court, a borrower can end the foreclosure process by paying up the arrears or, in some cases, making payment arrangements to pay up the arrears.
Statement of defense
There are very few defenses to foreclosure. This option is not often used as it is expensive and unless there is an error in amounts owed or paid, there is no defense to non-payment of a mortgage. If the amount of the appraised value is very low, this is another time when a borrower may file a defense.
Demand of notice
A demand of notice is a legal declaration that a borrower wants to be kept up to date in the foreclosure process. If a borrower tries selling the property themselves or save money by paying the arrears gradually, this notice requires the lender to go through all the foreclosure process steps and allows a borrower to not be surprised as to then the final foreclosure will occur.
Unfortunately, this is a frequent choice borrowers make. This allows a lender to note the borrower in default. This will happen after the notice period has passed. The Statement of claim clearly shows the amount of time a borrower has to respond to the statement of claim. Effectively, this allows a lender to jump to the end of the foreclosure process.
A quit claim is where the borrower agrees to give title to the lender. A borrower is highly recommended to talk to a lawyer if considering a quit claim as they may lose rights and it may have continuing financial repercussions.
Consenting to the foreclosure
This is another situation where a borrower should talk to a lawyer about the legal consequences of this action. It may allow a person to stay in their home longer; however it can have serious repercussions.
The Redemption Period is the time that the court allows a borrower to pay back the arrears and bring the mortgage current. The time allowed but the courts will vary. There are many factors that will determine how long a borrower can stay in their home (or commercial property) for the redemption period. The single biggest factor is the amount of equity in the property. This time can often be negotiated so call our foreclosure team today for help either speeding up or extending the redemption period. On average the redemption period is 3-6 months.
This is the step in the foreclosure process where a home is put on the market for sale. Most often it is listed, by the court, with a real estate agent. The agent’s fees are paid by the borrower. All offers are presented to the judge. The judge hearing the matter decides if an offer is fair and if, in the circumstance, appropriately accepted. The sale proceeds are used to pay back all debt(s), in priority order, on title. If there are net funds remaining, they are payable to the borrower.
Order for foreclosure
This happens when the property is not sold but is transferred to the lender in satisfaction of the debt. It is a different process than a judicial sale. The foreclosure order may lead to a deficiency judgment.
Why Foreclosures Occur
When you buy expensive property, such as a home, you might not have enough money to pay the entire purchase price at once. However, you can pay a small percentage of the price up front, usually anywhere from 3% to 20% of the price, with a down payment, and borrow the rest of the money (to be repaid in future years). However, the rest of the money may still amount to hundreds of thousands of dollars, and most people don’t earn anywhere near that much annually. Therefore, as part of the loan agreement, you will agree that the property you’re buying will serve as collateral for the loan. If you stop making payments, the lender can foreclose on the property—that is, repossess it, evict you, and sell the property used as collateral (in this case, the home) in order to recover the funds they lent you that you cannot repay. To secure this right, the lender places a lien on your property. To improve their chances of recouping the money that they lend, they (usually) only lend if you’ve got a good loan-to-value (LTV) ratio, a number that represents the risk that the lender will take in granting someone a secured loan, such as a mortgage. To calculate the ratio, the lender divides your loan amount by the value of the home and then multiples the result by 100 to get a percentage. Lenders view an LTV ratio of 80% or less to be ideal. If you have an LTV ratio that exceeds 80%, you will generally require Private Mortgage Insurance (PMI), which can add tens of thousands of dollars to the amount you pay over the loan term.
How Foreclosures Work
Foreclosure is generally a slow process. If you make one payment a few days or weeks late, you’re probably not facing eviction. However, you may face late fees in as little as 10 to 15 days.8 That’s why it’s important to communicate with your lender as early as possible if you’ve fallen on hard times or expect to in the near future—it might not be too late to avoid foreclosure. The foreclosure process itself varies from lender to lender and laws are different in each state; however, the description below is a rough overview of what you might experience. The entire process could take several months at a minimum.
Notices start. You will generally start to receive communications as soon as you miss one payment, and those communications might include a notice of intent to move forward with the foreclosure process. In general, lenders initiate foreclosure proceedings three to six months after you miss your first mortgage payment. Once you’ve missed payments for three months, you may be given a “Demand Letter” or “Notice to Accelerate” requesting payment within 30 days. If, by the end of the fourth month of missed payments, you still have not made the payment, many lenders will consider your loan to be in default and will refer you to the lender’s attorney. This is when things get critical.
A judicial or non-judicial foreclosure ensues. When it comes to foreclosure proceedings, there are two types of states: judicial and non-judicial states. In judicial states, your lender must bring legal action against you in the courts to foreclose. This process takes longer, as you often have 30 to 90 days in between each event. In non-judicial states, lenders can foreclose based on the “power of sale” clause in the agreements you’ve signed with them, and a judge is not involved.5As you might imagine, things move much faster in non-judicial states. But in either type of state, you will be given written notice to make payment followed by a “Notice of Default” and a “Notice of Sale.” You can fight the foreclosure in court; in a judicial state, you’ll generally be served with a summons, whereas in a non-judicial state, you’ll need to bring legal action against your lender to stop the foreclosure process. Speak with a local attorney for more details.
You can stop the process. In certain states, lenders are required to offer borrowers the option to reinstate the loan and stop the foreclosure process. Whether or not those options are realistic or feasible is another matter. Lenders might say that you can reinstate the loan anytime after the “Notice of Sale” up until the foreclosure date (the sale date) and stay in the home if you make all (or a substantial portion) of your missed payments and cover the legal fees and penalties charged so far. You might also have an opportunity to pay off the loan in its entirety, but this may only be feasible if you manage to refinance the home or find a substantial source of money.
Be prepared for an auction and eventual eviction. If you’re unable to prevent foreclosure, the property will be made available to the highest bidder at an auction that either the court or a local sheriff’s office runs. If nobody else buys the home (which is common), ownership goes to the lender. At that point, if you’re still in the house (and haven’t made arrangements to protect the house), you face the possibility of eviction, and it’s time to line up new accommodations. Local laws dictate how long you can remain in the house after foreclosure, and you should receive a notice informing you of how long you can stay. Ask your former lender about any “cash for keys” incentives, which can help ease the transition to new housing (assuming that you’re ready to move quickly).
Get a second chance through redemption. Many states offer what is known as redemption, a period after the foreclosure sale occurs when you can still reclaim your home. The “Notice of Sale” will generally inform you about the redemption period, and timeframes vary by state. You generally must be willing to pay the loan balance that you owe and any costs associated with the foreclosure process to reclaim in the home. It often takes four months after you miss your first payment before you are officially in default of your loan.
How to Avoid a Foreclosure
The act of taking back your home is the last resort for lenders who have given up hope of being paid. The process is time-consuming and expensive for them (although they can try to pass along some of those fees to you), and it is extremely unpleasant for borrowers. Fortunately, you can follow some tips to prevent foreclosure:
• Keep in touch with your lender: It’s always a good idea to communicate with your lender if you’re having financial challenges. Get in touch before you start missing payments and ask if anything can be done. And if you start missing payments, don’t ignore communication from your lender—you’ll receive important notices telling you where you are in the process and what rights and options you still have. Speak with a local real estate attorney or HUD housing counselor to understand what’s going on.
• Explore alternatives to keep your home: If you know that you won’t be able to make your payments, find out what other options are available to you. You might be able to get help through government foreclosure-avoidance programs. Some lenders offer similar programs to those willing to fill out a mortgage assistance application. Your lender might even offer a loan modification that would make your loan more affordable. Or, you might be able to work out a simple payment plan with your lender if you just need relief for a brief period (if you’re in between jobs, or have surprise medical expenses, for example).
• Look into alternatives for leaving your home: Foreclosure is a long, unpleasant, expensive process that damages your credit. If you’re simply ready to move on (but want to at least try to minimize the damage), see if your lender will agree to a short sale, which allows you to sell the house and use the proceeds to pay off your lender even if the loan hasn’t been completely repaid and the price of the home is less than what you owe on the mortgage. However, you may still have to pay the deficiency unless you have it waived. If that doesn’t work, another less attractive option is a deed in lieu of foreclosure, which allows you to reduce or even eliminate your mortgage balance in exchange for turning over your property to the lender.
• Consider bankruptcy: Filing for bankruptcy might temporarily halt a foreclosure. The issues are complex, so speak with a local attorney to get accurate information that’s tailored to your situation and your state of residence.
• Avoid scams: Because you’re in a desperate situation, you’re a target for con artists. Be wary of foreclosure rescue scams, such as phony credit counselors or individuals who ask you to sign over the deed to your home, and be selective about whom you ask for help. Start seeking help from HUD counseling agencies and other reputable local agencies.
Foreclosure Lawyer South Salt Lake City
When you need legal help from a foreclosure lawyer in South Salt Lake City, please call Ascent Law LLC for your free consultation (801) 676-5506. We want to help you.
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506