Notice Of Trustee Sale

Notice Of Trustee Sale

A Notice of Trustee’s Sale informs homeowners and mortgage borrowers of record that their home will be sold at a trustee’s sale on a specific date and at a specific location. The actual sale typically completes a non-judicial foreclosure in states allowing this type of foreclosure process. The highest bidder at a trustee’s sale receives title to the property being sold; if no one bids, title to the property reverts to the foreclosing mortgage lender.

Foreclosure Process Determined by State Law

Home-loan foreclosure procedures are governed by state law. In general, there are two types of foreclosures. Judicial foreclosures fall under court jurisdiction, while non-judicial foreclosures are overseen by third-party entities including title or escrow companies appointed as trustees. States may allow either or both types of foreclosure proceedings. Mortgage lenders typically foreclose mortgage loans based on non-payment or other default of a mortgage loan according to terms outlined in a recorded document, such as a Mortgage or Deed of Trust.

The Role of a Foreclosure Trustee

In non-judicial foreclosures, a third-party entity known as a trustee conducts the foreclosure based on documentation and information submitted by the mortgage lender. The trustee files a Notice of Default, which is a document that establishes the mortgage default and names parties who took out the home loan being foreclosed. This notice is recorded with the county where the property is located and typically specifies a time limit for mortgage borrowers or other interested parties to respond or reinstate the mortgage by paying past-due payments, late fees and trustee fees. The time frame between filing a Notice of Default and a Notice of Trustee’s Sale varies between 60 days to several months depending on state laws and the volume of foreclosures being processed by the trustee.

Notice of Trustee’s Sale

If the mortgage borrowers or current homeowners don’t cure the default as outlined in the Notice of Default, the foreclosure trustee will prepare and record a Notice of Trustee’s Sale. This document establishes where and when the property being foreclosed will be sold and provides the minimum opening bid for the property. The Notice of Trustee’s Sale is published in a newspaper local to the property being foreclosed, and it also is mailed to the borrowers of record and posted on the subject property. Tenants of property posted with a Notice of Trustee’s Sale must be prepared to vacate the property prior to the date of the trustee’s sale because they may be subject to eviction.

Foreclosure and Tenants

Tenants of a home being sold through a trustee’s sale may wish to obtain legal advice or contact the trustee for more information about their rights and responsibilities. When the trustee’s sale is completed, title to the property typically is transferred from the homeowners (the tenants’ landlord) to either the foreclosing lender or the winning bidder at the trustee’s sale. Tenants can attempt to negotiate a rental agreement with the property’s new owner, but success can’t be guaranteed.

How Do Trustee’s Sales Work?

A trustee’s sale is one option that a lender has if you get behind on your mortgage and default on your payments. Foreclosure is usually the second option. The two differ only slightly in what they entail, as the trustee’s sale is often chosen because of the potential for the lender to recover more of the money that has been lost from the defaulted loan.

Presale

A trustee’s sale is usually called at least 90 days before the sale is actually held. This occurs so that the person who is in default on his home loan still has time to get his financial situation straightened out to recover any potentially lost assets. When the lender decides to use a trustee’s sale, a notice is generally filed with the county recorder’s office and the borrower is presented with a notice of sale indicating when the sale is going to take place. Investors go to trustee’s sales with the idea of buying property for less than market value so that they can turn around and resell it at a profit.

Sale

A trustee’s sale is much like an auction, except the property being sold is property that has been seized as a result of someone’s failure to pay her bills. The property is auctioned off along with any remaining possessions that have been seized. These are either sold individually or in lots. Generally, the buyer has to purchase the property sight unseen and is taking a significant risk in doing so. However, the possibility of buying real property or other items at significantly less-than-market value is enticing enough for many investors.

Stipulations

Some stipulations generally exist that you must qualify for before you can participate in a trustee’s sale. You cannot simply show up and start bidding without registering for the sale first. You also have to show that you have sufficient funds to bid on the items you intend to win in the auction. This must typically be in the form of cash or a cashier’s check. This is one reason the lender may choose the trustee’s sale in the first place — it will receive immediate cash payment for the property being auctioned off.

Bidding

Once bidding begins for the property, the person who has lost the property will be subject to the same bidding rules as everyone else involved in the sale. Bidding can begin as low as one penny over the asking price by the lender. The winning bidder can generally expect to pay some fees if he has the winning bid. This fee is somewhere around 1 percent but can vary depending upon the state in which the auction is held.

How to Postpone a Trustee’s Auction

When discussing real estate, auctions are referred to as a “trustee’s auction” or “trustee’s sale date.” To postpone this sort or auction, the borrower must first be in default—meaning the borrower is not making mortgage payments. Borrowers who stop making mortgage payments will sooner or later cause the bank to foreclose. How that foreclosure is handled depends on state law, but more than half of the states in the U.S. are trust deed states, and the trustee handles foreclosures.
Before Postponing the Auction
• After a borrower stops making the mortgage payments, the lender notifies the trustee to initiate foreclosure proceedings. The trustee is a third party to the trust deed, a position some call “holding a naked title.”
• Although there is no required period before filing a Notice of Default, most lenders prefer to try to collect during the first 60 to 45 days that a borrower falls into arrears, rather than jump into foreclosure proceedings.
• Some states such as Utah require the lender to give the borrower at least 30 days’ notice before filing a Notice of Default.
• Once the Notice of Default is filed, a borrower has 90 days to reinstate the loan by making up the back payments and paying late charges, which include the trustee’s fees. There are a few methods that can be used in postponing an auction.

Redeem the Mortgage

Although people refer to reinstating a mortgage and redeeming a mortgage interchangeably, they are different. To redeem a mortgage is to pay off the mortgage; reinstating requires bringing the mortgage current. During the final days of a non-judicial foreclosure process, a lender is not required to accept a reinstatement but must allow redemption.

Apply for a Loan Modification

Lenders are also not required to postpone an auction in exchange for a loan modification, but most banks will try to work out a temporary repayment schedule. This does not mean the bank will not send the home to auction, so be careful; borrowers may want to ask the bank for a written promise not to move forward with the auction. If accepted, banks will grant a temporary loan modification, and after three to six months, tell the borrower they are filing foreclosure because the borrower does not qualify for a permanent loan modification.

File for Bankruptcy

A bankruptcy filing does not permanently stop an auction, but it could postpone the auction for a while. When a debtor files for bankruptcy, the court issues an order known as an automatic stay that stops attempts from creditors to collect money—including postponing an auction.6 However, the lender can then file a motion to lift the automatic stay, especially if the Notice of Default was already filed.

File a Temporary Restraining Order

Most people associate a temporary restraining order with domestic abuse, but petitioning the court for protection from abuse can also include a request to postpone an auction. Borrowers will need to hire a lawyer to file a temporary restraining order, and that lawyer might need to find a reason based on fraud or some wrongdoing on the lender’s part. Even if the lawyer is successful and wins the argument, the restraining order is not permanent.

Attempt to Make a Short Sale

Telling a lender that the borrower is attempting to make a short sale is generally not enough; the borrower must submit an offer to the bank from a qualified buyer. The real estate agent or lawyer handling the negotiation for the borrower then calls the bank’s negotiator and requests a postponement of the auction. Often, banks will not consider a request for a postponement until the auction is a few days away. In Utah, and many other states, a notice of trustee sale is the final written notice that a lender has scheduled a date to sell a home in a foreclosure auction. When a borrower receives a notice of default or a notice of trustee sale, there is time remaining to take steps to stop the foreclosure process, but quick and decisive legal action must be taken to save a home from foreclosure. In most states, the lender has the right to issue the notice of foreclosure sale and move forward with a mortgage foreclosure sale when a borrower stops making their mortgage payments. The foreclosure process is formally started when the notice of default is sent to the home after a borrower misses 3 or more monthly mortgage payments. Any failure to answer the notice by either contacting the lender or reinstating the mortgage will likely to lead to the notice of trustee sale being sent.


The best way to stop the notice of foreclosure sale is to hire a very good foreclosure attorney. Once you receive a notice of foreclosure sale, it is best to go through the courts to use legal methods to stop the foreclosure sale date. It is really important to understand how much time you have to when you receive the first notice from the lender. Receiving a notice of default does not mean you will lose your house immediately and you can still stop the sale date through number of different legal methods. The foreclosure attorneys at Consumer Action Law Group prepare lawsuits to save houses that are being illegally foreclosed, and their foreclosure lawyers file bankruptcy to stop and fight the foreclosure process as well. Another method that homeowners can attempt is to contact the lender to apply for a loan modification. If a loan modification is being reviewed and the foreclosure process is moving forward, it is best to immediately contact a foreclosure lawyer and discuss a potential lawsuit. It is also possible to negotiate a deed in lieu from the lender if the goal is to walk away from the house without owing any money. The deed in lieu will stop both the foreclosure and may wipe out any claims for deficiency. If all else fails, you can seek help from a real estate attorney that help with short sale to sell the home with approval from the lender.
Difference Between A Notice Of Default And Notice Of Sale In Foreclosure
In a non-judicial foreclosure, borrowers sometimes receive a Notice of Default and a Notice of Sale, depending on state law. Read on to learn the difference between these two documents and under what circumstances you might receive them.

Initiation of a Non-judicial Foreclosure

When you take out a loan in a state that allows non-judicial foreclosures, you will likely sign a deed of trust or a mortgage, which contains a power of sale clause. This clause gives the trustee a third party that manages the non-judicial foreclosure process in certain states the right to sell the home though an out-of-court process if you stop making payments.

Notice of Default

Sometimes, depending on state law, a non-judicial foreclosure process begins when the trustee records a Notice of Default (NOD) at the county recorder’s office.
The NOD serves as public notice that the borrower is in default. The NOD often contains:
• the name and address of the borrowers
• the name and address of the lender
• the name and address of the trustee
• the address and/or legal description of the mortgaged property
• a description of the default
• the action required to cure the default
• the date by which the default must be cured, and
• a statement that if the default is not cured by the deadline, the lender intends to sell the mortgaged property at a public sale.
If the borrower does not “cure” the default by bringing the payments up to date—including late charges and foreclosure fees—the trustee might (again, depending on state law) then prepare and file a Notice of Sale for the property.

Notice of Sale

The Notice of Sale (NOS) generally states:
• the property address and/or legal description
• a statement that the property will be sold at a public auction, and
• the date, time, and location of the foreclosure sale.
The NOS might be recorded in the county land records, mailed to the borrower, published in a newspaper of general circulation in the county where the home is located, as well as posted on the property and/or in a public place.

Differences from State to State

While you might get both a Notice of Default and a Notice of Sale as part of the non-judicial foreclosure process where you live, foreclosure procedures and the documents you will receive do vary widely from state to state. You might get:
• a Notice of Default followed by a Notice of Sale
• a combined Notice of Default and Sale (or similar document)
• a Notice of Sale stating that the property will be sold on a certain date, or
• notice by publication in a newspaper and posting on the property or in a public place.

Call Ascent Law LLC

If you’re facing a foreclosure and want to learn the specific procedures in your state, as well as about your rights during the process and whether you have any potential defenses to the foreclosure, consider talking to an attorney.

Notice of Trustee Sale Attorney

When you need an Attorney for a Notice of Trustee Sale, please call Ascent Law LLC for your free consultation (801) 676-5506. We want to help you!

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

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Utah Real Estate Code 57-1-4

Utah Real Estate Code 57-1-4

Utah Real Estate Code 57-1-4: Attempted conveyance of more than grantor owns — Effect.

A conveyance made by an owner of an estate for life or years, purporting to convey a greater estate than he could lawfully transfer, does not work a forfeiture of his estate, but passes to the grantee all the estate which the grantor could lawfully transfer.

In legal terms, conveyancing refers to transferring the title of real property from one person to another. A conveyance occurs when the owner of real estate transfers the ownership of that property to another party. This could be a home, or some other property such as commercial real estate. A conveyance can occur in full, or the owner may choose to transfer only a portion of the ownership interest.

Conveyances may occur in many different ways, including but not limited to:
• Through a sale of the land or property;
• Through transfer as a gift; or
• By inheritance, such as through succession laws.

In general, statute of frauds laws require that any type of real estate sale is to be recorded in a written contract. Thus, a conveyance of title to real estate must be in writing if it involves a sale. This is to help avoid any disputes or breaches of contract in the future, as well as to establish the legal owner of the property for other purposes, such as taxes. The owner of the property, or the “grantor,” must utilize words of conveyance in order to transfer an interest in property to the person receiving the property, or the “grantee.” Words of conveyance show the intent to transfer the title of a parcel of real property and are typically required by law, although the exact words required may vary by jurisdiction. Transfer of the actual, physical deed does not need to happen, so long as the person clearly expresses their intention to make the conveyance. The deed itself must be written, signed, dated, and should contain a description of the land being transferred. Additionally, in order for a valid conveyance to occur, there should be no title defects, such as an improperly recorded title. In general, there are four main types of real property conveyances. Variations do occur within the four main types of conveyances. However, courts will not typically recognize the transfer if the language of the conveyance does not fit within one of the four main categories.

Fee Tail

Fee tails are intended to preserve the estate in the bloodline of the person receiving the property. Thus, only the children of a fee tail holder will benefit from the fee tail. Once the holder of a fee tail dies without leaving behind any children, both the bloodline and the fee tail end, and the property returns to the original grantor. Fee tails are a type of conveyance that transfers an interest in real property to another, but restricts any further sale or transfer of the property. Fee tails are also referred to as restraint on alienation, and are abolished in nearly every state.

Fee Simple Absolute

A fee simple absolute is a conveyance of real property that gives absolute ownership in the property. The holder of a fee simple has both the present and future interest in the property. The duration is indefinite, and the interest is not subject to any specific conditions. At any time, the holder may sell all or part of the property, or distribute the property at their death through a will. These rights are commonly thought of as simply ownership of the real property, and is the most broad category of property interest;

Life Estate

Life estate refers to an interest in property that is measured by the duration of someone’s life, typically the person who is to receive the property. Once the life tenant dies, the property is transferred to the person who holds future interest. A life tenant is generally entitled to all uses and profits from the property; however, the life tenant does not maintain any rights to transfer the property when they die. As such, they do not have the right to commit waste (acting in any way that would cause the property to lose value, neglecting the premises, etc); and

Fee Simple Defeasible

A fee simple defeasible conveyance may have certain conditions or limitations placed on the transfer of property. If these conditions are violated, or are not met, the property either goes back to the original grantor, or a specified third party. There are three different types of fee simple defeasible:

 Fee Simple Determinable: The interest in the property is automatically ended when a condition is violated or unmet;
 Fee Simple Subject to Condition Subsequent: Transfer where the violation of the condition would give the original owner of the property the option to take back the property; and
 Fee Simple Subject to Executory Limitation: This conveyance confers a future property interest to a third party, not the original owner.
Conveyances of property may be disputed. Disputes over real property and the conveyance of real property occur frequently, especially when the grantor fails to provide clear and legal words of conveyance. Some examples of common conveyance disputes include:
 Attempts to convey property that the grantor does not actually, legally own;
 Will or trust disputes;
 Issues with defective or improperly recorded titles, as previously mentioned; or
 Conveyances based on fraud or deceit.
If a conveyance, or failure to convey, results in a measurable loss, legal action may be taken. Examples of remedies include damages awards and court injunction, such as an order that requires the defendant to transfer the title to the property’s buyer.
Things To Know About Conveyance Deed And Why It Is Important
In the wake of the rising number of instances of fraud and bogus selling of properties, it’s the conveyance deed or the sale deed that gives legal protection to the ownership of your property. By understanding the basics of a conveyance deed, you can guard yourself against getting duped.
 There is a little difference between the sale deed and the conveyance deed. All sale deeds are conveyance deeds but not vice-versa. Gift, mortgage, exchange and lease deeds are also types of conveyance deed.
 Governed under the Registration Act, a conveyance deed is an important document for a buyer as well as the seller because a purchase is not legally complete until it is signed by both the parties.
 A conveyance deed is made on a non-judicial stamp paper keeping the agreement to sell as the blueprint.
 The document has all the details needed to carry out for the transfer of the property title. This includes the full names of the buyer and the seller, their addresses, etc. The actual demarcation of the property in question, chain of the title of the owners, and the method of the delivery of the property are also stated.
 In the deed, the seller is also required to certify that the property is free from any legal encumbrance.

 If some loan is taken against the property, the mortgage should be cleared before proceeding, if it’s a sale deed. It’s always better to personally check with the local sub-registrar’s office.
 In case of sale deed, it would also mention the money received towards the sale transaction.
 The document would also state the exact date on which the property would be physically handed over to the new owner.
 Within a period of four months of the execution of the deed, all the original documents related to the sale of the property should be produced before the registrar for registration.
 The conveyance deed is also required to be signed by at least two witnesses with all their details included.
 After the conveyance deed is signed, it has to be registered at the local sub-registrar’s office by paying the registration fee.
Although states vary in indicators of fraud which are recognized the following factors, among others, may be used to infer fraudulent conveyance:
 An inadequate or fictitious consideration or a false recital as to consideration;
 The fact that property is transferred by a debtor in anticipation of or during a pending suit;
 Transactions which are not in the usual course or method of doing business;
 The giving of an absolute conveyance which is intended only as security;
 The failure to record the conveyance or an unusual delay in recording the payment;
 Secrecy and haste are ordinarily regarded as badges of fraud but are not in themselves conclusive of fraud;
 Insolvency or substantial indebtedness of the grantor;
 The transfer of all the Debtor’s property, especially when she is insolvent or greatly financially embarrassed;
 An excessive effort to clothe a transition with the appearance of fairness;
 The failure of parties charged with fraudulent conveyance to produce available evidence or to testify with sufficient preciseness as to the pertinent details, at least in cases where the circumstances under which the fraud, transfer took place are suspicious;
 The unexplained retention of possession of property transferred by Grantor after conveyance;
 The buyer’s employment of the seller to manage the business as before, selling the goods which were the subject of the transfer;
 The failure to examine or to take an inventory of the goods bought or the presence of looseness or incorrectness in determining the value of property;
 The reservations of a trust for the benefit of the grantor and the property conveyed;
 The existence of a blood or other close relationship between the parties to the transfer.
Conveyance Deed mean
One should first understand the meaning of ‘Deed’. It is a written document that is sealed and signed by all parties involved in property transaction (buyer and seller). It is a contractual document that includes legally valid terms, and is enforceable in a court of law. It is mandatory that a deed should be in writing. When each party agrees and all the liabilities has been fulfilled as per the agreement of sale of any property, a final document is signed by the seller in favor of the purchaser. This documents that all rights of seller over a property henceforth has been transferred to the purchaser. This is the deed of conveyance.
“Conveyance Deed records the transfer of interest in immovable property. The conveyance in the immovable property may take place by way of sale deed, gift deed, exchange deed etc,”
What is the difference between sales and Conveyance Deed?
It has also been observed that buyers are usually confused about the two terminologies sales deed and Conveyance Deed.

Sale Deed

A Sale Deed acts as the main legal document for evidencing sale and transfer of ownership of property in favors of the buyer, from the seller. Further, it also acts as the main document for further sale by the buyer as it establishes his proof of ownership of the property. The Sale Deed is executed subsequent to the execution of the sale agreement, and after compliance of various terms and conditions detailed in the sale agreement as agreed upon between the buyer and the seller. The Sale Deed is the main document by which a seller transfers his right on the property to the purchaser, who then acquires absolute ownership of the property.
“Conveyance and Sale Deed essentially have no difference as in both the documents, the right, interest and title of the previous owner is transferred to the purchaser. Conveyance Deed includes Sale Deed i.e. Sale Deed is one of the mode of conveyance i.e. transfer of interest. All deeds transferring the property-rights are Conveyance Deeds. Sale Deed is one of them,” But what is to be taken into the account that all Sale Deeds are deeds of conveyance but all Conveyance Deeds are not sale deeds. So, Conveyance Deed is a broader concept including the Sale Deed in it. On signing a Conveyance Deed, the original owner transfers all legal rights on the property to the buyer, against a certain consideration which is usually money. However, this consideration is non-significant in the case of Gift Deeds, as they are based on familial bonds.
Conveyance Deed is required to contain the following:
 Complete identification and demarcation of the boundaries of the property
 Information of all the parties who are involved, such as name, age addresses and signature of both the parties involved – buyer and seller
 Mention of any other rights (if applicable) annexed to the property and its use
 The chain of title, that is, all legal rights to the present seller
 The method of delivery of the given property to the buyer
 The sale agreement, which is the main requirement of the drafting of the valid sale deed and both the parties, must mutually settle the terms and conditions of the agreement. A sale deed always precedes agreement to sell
 The sale consideration clause, which is the memo of the consideration, stating how it has been received
 Any other terms and conditions that are applicable as far as the transfer of ownership rights are concerned
The Conveyance Deed procedure
The Conveyance (or sale) Deed is required to be executed on non-judicial stamp paper. Once that is done it needs to be registered by presenting it at the Registrar’s office, and remittance of the registration fee. After the registration is done, the transfer of the property moves into the public domain. Stamp Duty and Registration Fees is obtained by the government as revenue. When this happens, the process of Conveyance Deed is officially over. If the builder is not alive, it can be done by the legal heirs/representative of the builder. You need to draft a Conveyance Deed and apply before registration. Engage any local counsel who is dealing in these matters.

Should I Hire an Attorney for Help with Conveyance Issues?

A skilled and knowledgeable estate attorney may prove to be an invaluable asset when conveying property to another person. An experienced estate attorney will be knowledgeable about your state’s specific property laws, and will be able to assist you in drafting any necessary real estate contracts. Additionally, they will be able to represent you in court, should any disputes arise.

Free Initial Consultation with Lawyer

It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

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Utah Real Estate Code 57-1-2

Utah Real Estate Code 57-1-2

57-1-2 Words of inheritance not required to pass fee. The term “heirs,” or other technical words of inheritance or succession, are not requisite to transfer a fee in real estate.

The Rights of Heirs under a Trust or Will

Sooner or later many people find that they are going to inherit money or assets from a relative or friend’s trust or estate and that is usually a bittersweet discovery. They have lost a loved one or a good friend but are also going to receive an asset, usually tax free that can make a huge difference in one’s life. It is a gift of love from someone who often was an important part of life and that gift is often a very emotional event. And then the weeks, then months pass, and the asset somehow is not transferred and seems mired in various court or tax issues that delay the actual transfer. What was a gift from a friend or loved one becomes a matter requiring complex documentation, many meetings, letters or discussions, costs for attorneys and accountants, executors, trustees and even filing fees for courts. It may seem that the executor or trustee or legal and accounting professionals are grasping what they can from this gift of love. For many heirs, frustration and often anger mounts. We hear it all the time. What began as a gift ends up as a complicated and, at times, an apparent expensive exercise of bureaucratic inefficiency. Often the heirs have goals and plans for the inheritance that are delayed or made impossible as the probate process slogs along. The executor or trustee seems disinclined to move it along with efficiency yet seems to want his or her fees promptly. Tensions rise.

Probate versus Trust Administration

Probate: This is the public legal process by which a decedent’s property is distributed to the specified heirs under court supervision. An executor (if there is a Will) or administrator (if they die without a Will) is appointed by the court and that executor/administrator has the obligation to account for all assets, pay all creditors, pay all taxes, and, with court approval, make a formal accounting and then pay the remainder to the specified heirs. If there is a Will, the Will will specify the heirs. If there is no Will, the law will specify who inherits what. The executor or administrator receives a fee for his or her services, usually specified in a schedule published by the court and is allowed extraordinary fees if particular services are required, such as commencing litigation or selling real property. The executor or administer has a fiduciary duty to the heirs and is personally liable for failure to perform. The process is a public one with documents filed with the court and available in the court records. Normally, an accounting is filed within a year and the probate is closed with the court approving the final accounting and distribution one to two years after the probate begins. If taxes are due the probate will remain open for at least a year since there are tax advantages in that approach. Estate taxes are only due of the assets are substantial (over five million if a single person, over eleven million for a couple) but income tax returns may have to be filed for the estate. Attorneys are usually hired by the executor or administrator to handle the various legal filings and an accountant as well to help with the accounting and tax returns. The attorney’s fees are also set by court schedules with extraordinary fees available if there is litigation or complex business aspects to the estate. Accountants are usually paid their normal hourly fees.

Trust Administration: If one has a trust, normally there is no public probate process and the terms of the trust appoints the trustee or trustees, describes their duties, describes what fees they are entitled to, and provides for distribution of assets either outright or in trust both during the life of the creator of the Trust (the “Settlor”) and after the death of the Settlor. Trust administration is often faster than probate, but taxes still must be paid, and attorneys and accountants are usually retained by the trustee. Trustees have fiduciary duties to the beneficiaries of the trust and while there is no probate filed, the court is available to enforce the terms of the trust.

Basic Rights of Heirs

An heir is commonly thought of as someone who receives money or property from a person who has died. In legal terms, heirs are the next of kin and are the people who would normally benefit if the person died without leaving a will (died “intestate.”) The succession of intestate heirs is based on direct descendants, such as children or grandchildren. Other relatives, such as sisters and brothers, or aunts, uncles, nieces, nephews, and cousins, are called collateral heirs. If there is a written will, it specifies who will inherit and it often is not the people that would normally inherit intestate. A trust has “beneficiaries” rather than heirs, but they are treated the same as heirs in a will with their rights and inheritance being spelled out in the trust instrument.

A person who receives property or a share of an estate under a will or trust has certain rights as soon as the will is probated, or the Settlor dies. Probate is designed to protect the rights of will beneficiaries. A trust beneficiary has the right to receive the share entitled in a timely manner and to receive written notice of the all substantive trust proceedings. A wise executor or trustee will provide ongoing reports to heirs and beneficiaries and, if the estate will take years to settle, will ask the court to allow preliminary distributions to the heirs. The fiduciary should promptly answer questions from the heirs as to status and the assets in the estate. Once the probate process has completed payment to creditors and taxes due as well as the accounting, distributions to heirs should promptly follow. While the trust document normally describes the process required of the trustee, the beneficiaries are also entitled to information as to assets, state of administration, and prompt payment of sums due them under the trusts.

Accounting

A beneficiary may ask the executor for an account of what actions the executor has performed for the estate. Any such report should be in writing, and the executor or trustee should be expected to provide supporting papers, such as receipts or canceled checks for payments, proof of asset transfers and statements from any estate bank accounts. The supporting papers must conform to the information the executor or trustee provides.

Executor or Trustee Compensation Approval

Beneficiaries have the right to object to the level of compensation an executor or trustee requests for services but assuming those requests are within the guidelines set by the court or trust instrument, such objections are unlikely to be approved by the court. Note that many executors do not wish to be paid since often it is a relative who acts as executor and they may waive compensation either due to family connections or because such compensation is taxable, and they may rather just inherit their share. In trusts, the compensation is normally set in the terms of the trust but if the terms are generic “reasonable” or “appropriate,” then the court is available to review and, again, conforming to the court schedule is usually required.

Fairness to Beneficiaries and Heirs

The will or trust beneficiaries are entitled to an executor or trustee who performs duties fully and honestly and without favoritism. An executor must not act in a way that harms the estate or favors one beneficiary over another, behave in a dishonest or illegal manner or fail to abide by the legal obligations. An heir may petition the court if he or she believes the executor or trustee has failed to perform duties properly but note that the burden of proof is on the petitioner. Courts give executors and trustees discretion as to many decisions and will not normally replace business judgment of the executor or trustee with the court’s own. But self-dealing or using trust resources for improper purposes is something courts will not allow. Remedies can be extreme, including personal liability of the fiduciary, removal of the fiduciary, etc.

Relief Available

Heirs can seek relief from the court via use of a petition during the pendency of the estate, or later, a complaint for breach of fiduciary duty if the wrongdoing is discovered after the estate is closed. Such a process can be expensive and prior to filing a petition or suit, careful analysis of the potential causes of action should be conducted by competent legal counsel in the venue of the estate. A trustee is subject to court review if a beneficiary claims wrongdoing and that can occur during the time of the trust or thereafter, subject to the statute of limitations. Each heir is owed a fiduciary duty by the executor or trustee. Each heir is owed an accounting and information as to actions occurring in the estate or trust and each heir is owed prompt distribution of his or her inheritance. But the heir must act to protect his or her interest and that may mean filing a petition in a court of law seeking relief.

Inheritance Law and Your Rights

Inheritance law governs the rights of a decedent’s survivors to inherit property. Depending on the type of inheritance law your state has, a surviving spouse may be able to claim an inheritance despite what you may have written into your will. This statutory right of a surviving spouse hinges on whether a state follows the community property or common law approach to spousal inheritance. Children, and sometimes grandchildren, also have a right to claim an inheritance when a parent or grandparent dies.

Inheritance Law in Community Property States

Community property is generally property acquired by either spouse during the marriage. This includes income received from work, property bought during the marriage with income from employment, and separate property that a spouse gives to the community. A spouse retains a separate interest in property acquired through the following methods:
• Inheritance or a gift
• Acquisition of the property prior to the marriage
• An agreement between the spouses to keep the property separate from the marriage community.

In a community property state, each spouse owns a one-half interest of the marital property. Spouses have the right to dispose of their share of the community property in whatever way desired. A deceased spouse, for instance, can elect to give his or her half of the community property to someone other than the surviving spouse. Spouses cannot give away the other spouse’s share of the community property, however. A provision in a prenuptial agreement may also change a spouse’s right to distribute the property. A spouse has the sole right to dispose of their separate property. A deceased spouse can distribute both their separate property and their share of the community property in a will.

Inheritance Law in Common Law States

Unlike a surviving spouse in a community property state, a spouse is not entitled to a one-half interest in all property acquired during the marriage. In a common law state, both spouses do not necessarily own the property acquired during marriage. Ownership is determined by the name on the title or by ascertaining which spouses’ income purchased the property if a title is irrelevant. If, for example, only one spouse takes the title to a property, the spouse with the name on the deed owns the house even if the other spouse actually paid for it. A surviving spouse in a common law state has protection from complete disinheritance, however. Every common law state has different guidelines, but most common law states’ inheritance law allows the surviving spouse to claim one-third of the deceased spouse’s property. A deceased spouse can choose to leave less than a state’s mandated inheritance right, but the surviving spouse may make a claim with the court to inherit the predetermined amount. The will is carried out according to the decedent’s wishes if the surviving spouse agreed in writing to accept less than the statutory amount or the surviving spouse never goes to court to claim the legal share.

Inheritance Rights of a Spouse after Divorce

Once a divorce becomes final, many states automatically revoke gifts made in the will to the ex-spouse. In other states, a divorce has no effect on gifts to the ex-spouse. It is best to create a new will after a divorce becomes final to prevent an unintentional gift to a former spouse.

Inheritance Rights of Children

Unlike a spouse, a child generally has no legally protected right to inherit a deceased parent’s property. The law does protect children when an unintentional omission in a will occurs, however. The law presumes that such omissions are accidental — especially when the birth of the child occurred after the creation of the will. Depending on whether a spouse survives the decedent, the omitted child may inherit some portion of the deceased parent’s estate. If the omission was intentional, though, the will should expressly state this.

Rights and Liabilities of Heirs

No one is an heir to a living person. Before the death of the ancestor, an expectant heir or distributee has no vested interest but only a mere expectancy or possibility of inheritance. Such an individual cannot on the basis of his or her prospective right maintain an action during the life of the ancestor to cancel a transfer of property made by the ancestor.

Gifts and Conveyances in Fraud of Heirs

A person ordinarily has the right to dispose of his or her property as he or she sees fit, so that heirs and distributees cannot attack transfers or distributions made during the decedent’s lifetime as being without consideration or in fraud of their rights. For example, a parent during his or her life can distribute property among his or her children any way he or she wants with or without reason, and those adversely affected have no standing to challenge the distribution. One spouse can deprive the other of rights of inheritance given by statute through absolute transfers of property during his or her life. In some jurisdictions, however, transfers made by a spouse for the mere purpose of depriving the other of a distributive share are invalid. Whether a transfer made by a spouse was real or made merely to deprive the other spouse of the statutory share is determined by whether the person actually surrenders complete ownership and possession of the property. For example, a husband’s transfer of all his property to a trustee is void and illusory as to the rights of his surviving wife if he reserves to himself the income of the property for life, the power to revoke and modify the trust, and a significant amount of control over the management of the trust. There is no intent to part with ownership of his property until his death. Such a trust is a device created to deprive the wife of her distributive share. Advancements or gifts to children, including children by a former marriage, which are reasonable in relation to the amount of property owned and are made in Good Faith without any intent to defraud a spouse, afford that spouse no grounds of complaint. Good faith is shown where the other spouse knew of the advancements. If a spouse gives all or most of his or her property to the children without the other spouse’s knowledge, a rebuttable presumption of fraud arises that might be explained by the children.

Debts of Intestate Estate

Heirs and distributees generally receive property of their ancestor subject to his or her debts. The obligation of an heir or distributee to pay an ancestor’s debt is based upon his or her possession of the ancestor’s property. All property of an intestate ordinarily can be applied to pay his or her debts, but, generally, the personal property must be exhausted first before realty can be used.

Rights and Remedies of Creditors, Heirs, and Distributees

The interest of an heir or distributee in the estate of an ancestor can be taken by his or her creditors for the payment of debts, depending upon the applicable law. Advancements received by an heir or distributee must be deducted first from his or her share before the rights of creditors of the heir or distributee can be enforced against the share.

Real Estate Lawyer Free Consultation

When you need legal help with real estate law in Utah, please call Ascent Law LLC for your free consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews


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Utah Real Estate Code 57-1-1

Utah Real Estate Code 57-1-1

Utah Code Title 57 Real Estate 57-1-1: Definitions
As used in this title:

“(1) Certified copy” means a copy of a document certified by its custodian to be a true and correct copy of the document or the copy of the document maintained by the custodian, where the document or copy is maintained under the authority of the United States, the state of Utah or any of its political subdivisions, another state, a court of record, a foreign government, or an Indian tribe.

“ (2)Document” means every instrument in writing, including every conveyance, affecting, purporting to affect, describing, or otherwise concerning any right, title, or interest in real property, except wills and leases for a term not exceeding one year.

“ (3)Real property” or “real estate” means any right, title, estate, or interest in land, including all non-extracted minerals located in, on, or under the land, all buildings, fixtures and improvements on the land, and all water rights, rights-of-way, easements, rents, issues, profits, income, tenements, hereditaments, possessory rights, claims, including mining claims, privileges, and appurtenances belonging to, used, or enjoyed with the land or any part of the land.

“(4) Stigmatized” means: The site or suspected site of a homicide, other felony, or suicide;

(a)the dwelling place of a person infected, or suspected of being infected, with the Human Immunodeficiency Virus, or any other infectious disease that the Utah Department of Health determines cannot be transferred by occupancy of a dwelling place;  or

(b) property that has been found to be contaminated, and that the local health department has subsequently found to have been decontaminated in accordance with Title 19, Chapter 6, Part 9, Illegal Drug Operations Site Reporting and Decontamination Act.

How Do I Get a Copy of My Divorce Decree

If you’ve ever been married before and seek a green card based on your current marriage, you’ll need to provide to the U.S. government a divorce decree (also known as a “divorce certificate“), a certificate of annulment, or a death certificate for each prior marriage. If you already have these documents, you can move on to the next step of the marriage green card process.

Who must submit their divorce papers?

For each prior marriage, both the sponsoring spouse (the U.S. citizen or current green card holder) and the spouse seeking a green card must provide a photocopy or certified copy (with the issuing office’s seal or stamp) of their final divorce decree. You must also bring the original document or certified copy to your green card interview.

What if I was previously married but wasn’t divorced from that spouse?
If a previous marriage ended by your spouse’s death or by annulment, you must submit a photocopy of your spouse’s death certificate or your certificate of annulment. You must also bring the original or certified copy of these documents, whichever is applicable, to your green card interview.

Where to Get a Divorce Decree

If you filed for divorce in the United States, you generally can obtain a divorce decree from the court that issued the document. Alternatively, you can request an official copy from the office of vital records in the state where your divorce was finalized. The Centers for Disease Control and Prevention (CDC) website specifies the name and address of each vital records office, as well as the current fee for requesting the paperwork. If you filed for divorce abroad, you may find information about the issuing authority in your home country — including its name, the current fee, and procedures for obtaining an official copy — on the U.S. Department of State’s website. (On the left-hand side of the webpage, you will need to select the first letter of your country’s name, select your country, and click on the “Marriage, Divorce Certificates” tab to view more details.)

Alternative Documents

If you can’t find your marriage certificate or get an official copy, you must submit both of the following documents instead:
• A notarized personal affidavit (written explanation) in which you describe the facts of your marriage and the reason you’re unable to obtain an official copy of your marriage certificate
• A certified statement from the appropriate government agency explaining why your marriage certificate is not available
If you cannot obtain a certified statement from a government agency, you must instead provide an additional notarized personal affidavit (written statement) from one of your parents who is living or a close relative who is older than you. In the affidavit, they must attest to having personal knowledge of your marriage and describe the following:
• Their relationship to you
• How well they know you
• How they know about the information they are swearing to

Financial Documents

It will be more difficult for a court to get an accurate idea of your marital finances if he or she does not have the pertinent information. Keep in mind that these professionals are specifically trained to help you navigate a successful settlement and secure a stable financial future. Without all of the relevant data to review, you could miss out on your share of significant assets, investments, or accounts. You will need to keep in mind that documents should cover your long-term history, not just the most recent transactions. The gold standard is that your documentation should cover five years’ worth of data. Either way, three years’ worth of data should be sufficient to help your team assemble a settlement that you will be satisfied with.
The divorce financial checklist will give you the most thorough rundown of the most commonly requested items:
• Income Tax Returns
• Employment Records
• Financial Records (such as bank statements and loan information)
• Investment Account Statements
• Pension Plan Information
• Retirement Savings Accounts
• Children’s Bank Accounts
• Debt Records
• Wills and Trust Agreements
• Social Security Statements
Some spouses might be extremely secretive about their marital finances, and hide bank information and income statements. Their insistence on keeping you in the dark is bound to make it challenging for you to find copies of your income taxes, pay stubs, and other key information, which will be pertinent during your divorce. In these circumstances, the best thing you can do is create a ruse to pump your spouse for information. If your spouse does not know that a divorce is imminent, you might consider telling him or her that you want to plan for a health emergency. Sit down together, and go over all of your insurance information and finances to make a “plan” for handling the crisis. While this tactic might not give you copies of all the information, you can at least see where your marital finances stand.

Alternatively, you can take another route for accessing the information you need. Be certain to keep an eye on your mailbox, so you can get the mail first every time. If your name is on a joint checking account, you can even head to the bank to receive copies of your bank statement. Last but not least, pull your credit report and make sure you know about all of the debt that is registered in your name. This tactic will protect you from nasty surprises after the divorce is over, such as receiving bills for credit cards and loans that you were not aware of. This financial information is crucial to helping your CDFA and your divorce attorney, but it also comes in handy when you are creating a new budget. Then you can gain a clearer picture of what it costs to maintain your current lifestyle each month. This baseline can help you adequately prepare to move out and start downs your own path toward a single income.

Assets

One of the most important steps to take before getting a divorce is understanding what each person in the marriage brought to the union. To get an idea of the important documents you need to round up for your divorce attorney or court, take a look at this information below:
• Marital Home Information
• Information about Other Real Estate
• Vehicle Information
• Personal Property (including jewelry, artwork, collections, and antiques)

Be sure to specify which assets you personally brought into the marriage as individual property. You should be clearly identified on your list of assets, so that everyone will be clear about who should belong in the settlement.

Childcare Documents

For many couples, preparing a childcare plan is one of the most challenging aspects of a divorce. However, since caring for the children together requires financial cooperation, it is essential that you draft a potential plan at this stage. You should start by creating a list of the parenting items that are most important to you. The two of you will need to make decisions about visitation, custody, and insurance expenses. You will even need to decide which one of you will claim them as dependents on your taxes. Consider your priorities for their futures, especially their college expenses. Will you both contribute to a savings account, or will the children pay for their own tuitions? There is no right or wrong way to handle some of these issues, so you need time to think about what will work best for your family. These ideas are meant to be the catalysts for you and your spouse to start planning how you are going to handle everything after you split into two households. By taking a draft of this information to your divorce attorney now, you are giving him or her an opportunity to see if there is anything you left off that might still need to be considered. Therefore, you will have a bit more breathing room. That way, you can reflect on what will be best for the children, instead of selecting the easiest route in the heat of the moment.

Personal Documents

Remember, your financial information is not the only consideration that a financial planner will need to take into account.
You will also need pertinent information about the children, such as their:
• Birthdates
• Social Security numbers
• Bank Accounts
Personal data about you and your spouse can also help the planner draft an appropriate settlement that all parties will be satisfied with.
This data can include:
• The date of marriage
• Birthdates for you and your spouse
• Social security numbers for you and your spouse
• Information about previous marriages, including divorce decrees
• Prenuptial or postnuptial agreements
• Judgments and pleadings that involved either spouse
• Insurance policies
Other Pertinent Issues
If there are any extenuating circumstances that led up to your divorce, you will need to find documentation and proof. This documentation could factor into the final amounts of spousal support payments, and it could help make decisions about the custody of any children involved in the split.
Here are a few examples of situations when you might want to seek out proof that your spouse was involved in something illicit:
• Abuse
• Adultery
• Kidnapping
• Bullying
• Substance abuse
• Mental illness or instability
In addition, there might be other circumstances that can influence your divorce. Therefore, be sure to acquire any documentation you think might be pertinent to your case, so that the divorce attorney can review it.

Information that needs To be Changed

While you will not have to take this information to your divorce attorney, it is always a good idea to start planning ahead for things that need to be altered. You will not want your spouse’s name on documents that relate to your personal well-being, future finances, or healthcare directives.
You might be able to start changing some of the information on these items, even before you file for divorce:
• Life Insurance Policies
• Wills
• Powers of Attorney
• Advance Healthcare Directives
• Bank Accounts
• Credit Card Accounts
Before you consider heading to your divorce attorney to initiate the end of your marriage, it is critical to be prepared for what happens afterward. By following these steps before filing for divorce, you will gain some sense of control over an otherwise emotionally charged and draining situation. This divorce checklist will help you assemble documentation at your own pace. Then you will be ready for anything that your financial planner may need. In addition, gathering documents to prove and support the current financial situation in your marriage allows you to more adequately prepare for your future. It also gives you some space to reflect facts you consider some of the long-term issues that are bound to arise during a divorce settlement. By completing an accurate assessment of your lifestyle, income, and expenditures, a financial planner can help you prepare for your future as a newly single individual. Preparing a budget and evaluating your lifestyle is an essential part of establishing a firm financial future for yourself. If you utilize this financial checklist, you will be able to more clearly and accurately see what you could be entitled to during your divorce.

Free Initial Consultation with Lawyer

It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews


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Real Estate Contract Law

Real Estate Contract Law

The real estate contract is frequently utilized, yet minimal comprehended apparatus in the real estate business. Regardless of whether you are a position tenderfoot or prepared master, there is no reason for not knowing and understanding the real estate contract. Real estate contracts depend on custom-based law contract standards, so, significantly, you comprehend the stray pieces of contract law. Offer, Counteroffer and Acceptance. In most states, there are institutionalized contracts utilized by real estate operators and lawyers. The contract is, for the most part, drafted as an offer. The offer is normally marked by the purchaser (the offeror). The contract isn’t official until the vender acknowledges, making a “meeting of the psyches” (called “shared consent”). An acknowledgment is made if the offeree (the vender, right now) to the specific terms of the offer. On the off chance that the vendor answers, “I’ll acknowledge your offer on the off chance that you consent to close fifteen days sooner,” there is no coupling contract, yet rather a counteroffer. The fundamental structure square of a contract is that there is a common understanding.

If the offer isn’t acknowledged in the time allotment and way set out by the purchaser (offeror), at that point, there is no contract. For instance, if the contract indicates that acknowledgment must be made by copy, an acknowledgment by call or mail won’t do the trick. The buy or offer of real property is represented by both customary laws (judge-made law), and by state and government rules (ordered by state lawmaking bodies or Congress). Accordingly, the prerequisites for a legitimate and enforceable real estate contract fluctuate from state to state. Generally, a gathering wishing to purchase or sell a home will go into a “posting understanding.” This is a contractual relationship with a specialist or dealer, which sets up a wide scope of terms—the commission rate to be paid, the period the house will be recorded, where the property will be recorded, and how the property will have appeared. In many occurrences, the posting understanding is a selective one, keeping the purchaser or vendor from utilizing various specialists or merchants simultaneously. As a result of the restrictive idea of the relationship, a dealer or operator might be qualified for a commission in any event, when a purchaser or vendor finishes an exchange without the intermediary or specialist’s help.

Ordinarily, the buyer of the real property starts the exchange, presenting an idea to purchase the real estate as indicated by explicit terms. The merchant may acknowledge the offer (where case, a contract has been shaped), or may propose new terms as a counteroffer. The buy or offer of land is represented by the resolution of cheats, which implies that such contracts may be enforceable if they are recorded as a hard copy. State laws ordinarily indicate what arrangements must show up in a real estate contract. Even though the gatherings may draft an understanding without any preparation, structure contracts are regularly accessible through realtor’s expert associations. When in doubt, real estate contracts will, in general, convey various conditions—necessities that must be met before the contract will be enforceable in an official courtroom. These normally incorporate the necessity of various investigations, a review, an arrangement of title protection, and endorsement of financing. A buy may likewise be molded on the offer of other property.

The Fair Housing Act precludes separation in real estate exchanges by race, shading, religion, sex or national starting point. Law of contracts real estate is a legitimately authoritative understanding between a purchaser and a vender concerning the title of a property. Law of contracts real estate is a legitimately authoritative understanding between a purchaser and a vender concerning the title of a property. For a real estate contract to be enforceable, it must be recorded as a hard copy and contain all the fundamental components to be viewed as legitimate. Momentary leases are frequently special cases to this necessity.

There are a few components that make a real estate contract:

• Skilled parties are the individuals who are of lawful age when going into the contract.
• On the off chance that a gathering is pronounced crazy by the court, the individual is viewed as clumsy. Anybody going into a contract while briefly intellectually uncouth because of liquor or medications is additionally viewed as bumbling.
• Common consent is otherwise called a “meeting of the psyches.” To have shared consent, there must be an offer and an acknowledgment.
• Lawful thought comes in numerous structures, for example, real estate, cash, administrations, or individual property. All gatherings to a contract must offer some kind of thought.
• For a contract to be enforceable, it must have a legitimate reason.
• The motivation behind the contract must be consistent with the law. Illicit acts can’t be a piece of a contract. For instance, if extortion is engaged with a contract, it isn’t legitimate.
• The legitimate depiction ought to be utilized while giving the property portrayal of the contract.
• The contract must incorporate the buy or deal price. The evaluated worth may likewise be utilized if it has a predetermined date.
• All gatherings must sign the contract. Organizations and companies may assign an approved individual to sign for the benefit of the business.
• Electronic signatures are acceptable.

It is significant for real estate financial specialists to comprehend the basics of contract law since contracts are a basic piece of the real estate commercial center. A real estate contract depends on customary law standards. At first, the contract is shaped as an offer, which the purchaser signs. Until the vendor acknowledges the offer, the contract isn’t viewed as authoritative. An acknowledgment implies the dealer has consented to the specific terms stipulated in the offer. If the vendor answers that she or he will acknowledge the offer, however then includes an extra prerequisite, the contract isn’t official. It will at that point be viewed as a counteroffer. There must be a shared understanding of a contract to work. On the off chance that a period has been stipulated for an acknowledgment date by the purchaser, and the offer has not been acknowledged at that point, there is never again a contract. For instance, the contract requires the merchant to send a fax recognizing acknowledgment.

In any case, rather, the merchant calls or sends a letter. That isn’t worthy per the particulars of the settled upon contract.
When drawing up a real estate contract, you may go over different structures, for example:
• Unilateral Real Estate Contracts: Just one gathering is associated with making a guarantee concerning the contract.
• Bilateral Real Estate Contracts: At least two gatherings are included, permitting each to make vows to the next gathering.
• Expressed Contracts. They permit gatherings to express the conditions of their contract recorded as a hard copy or verbally.
• Implied Contracts. They emerge because of the expectations, relationship, or activities of the gatherings in question.
• Executory Contracts: Those contracts have not yet been finished as a result of incomplete commitments. For instance, if a real estate exchange is in escrow, it is considered executory.
• Executed Contracts: They are finished; there is nothing more than necessities satisfying.
• Valid Contracts. They are legitimately authoritative and enforceable contracts where all gatherings are in understanding, and all the norms of contract law have been met.
• Void Contracts. Such contracts don’t meet the criteria for contract law. This might be because of the contract containing unlawful purpose and consequently being unenforceable. Voided contracts are rarely legitimate, and neither one of the parties can enforce it.
• Voidable Contracts. They may give off an impression of being lawful however are inadequate in their capacity to meet a portion of the legitimate prerequisites. At least one gatherings can repeal the understanding as long as it’s done inside a specific period.
• Enforceable Contracts. They meet the important contract law necessities and offer lawful repercussions on the off chance that it isn’t satisfied.
• Unenforceable Contracts. They resemble legitimacy, yet they offer no lawful cures if not satisfied.

A breach of contract can be any infringement of a term contained inside your real estate contract. Be that as it may, the cures accessible to the non-breaching gathering will rely upon whether the breach was material or minor. A breach of contract is material if the breaching gathering’s activities, or inability to act, generously impacts the non-breaching party coming about in the non-breaching party not getting the outcome they expected. A non-material breach happens when a gathering damages an increasingly minor or unrelated state of the contract. Right now, the non-breaching gathering might be qualified for remuneration if they can demonstrate that they were harmed by the breach. For what reason does the qualification between a material breach and a non-material breach matter? The contrasts between the cures accessible to a non-breaching party in case of a material breach versus a non-material breach are noteworthy. At the point when a material breach of contract happens, the non-breaching gathering could choose not to play out their duties under the contract. What’s more, the non-breaching gathering will have the alternative to suing the breaching party for monetary harms and, now and again, look for Specific performance.

Specific performance is the point at which the court arranges the breaching gathering to make a specific move. Ordinarily, under contract law, in any event, when a gathering tangibly breaches the contract, the law expects them to pay cash harms just—it doesn’t force the breaching gathering to make a particular move. Nonetheless, where cash harms would be a deficient cure, the court may arrange the gathering to satisfy their commitments under the contract. About a real estate contract, Specific performance may incorporate moving responsibility for property to the non-breaching party. This comes in extremely convenient with real estate deals exchanges since It is assumed that the breach of a consent to move real property can’t be sufficiently diminished by financial pay. Moreover, for a solitary family staying that the purchasing party looking for execution expects to possess, the assumption is decisive. On the off chance that you went into a contract to sell real estate, yet the purchaser has breached the terms you consented to, the cures accessible to you will rely upon whether the purchaser made material or non-material breach. The most well-known material breach by purchasers in real estate contracts is neglecting to finish an end and not paying for and claiming the property as consented to in the contract. At the point when a purchaser breaches a real estate contract, the seller might be qualified for monetary harm. Nonetheless, it is less regular that the purchaser will be requested to play out a particular move like making ownership of the property because monetary harms are commonly adequate to repay a non-breaching dealer, as it is simpler for a seller to discover another purchaser in the market than it is for a purchaser to discover a substitution property. The dealer’s essential harms will, as a rule, be determined dependent on the distinction between the sum due under the real estate contract and the honest evaluation of the property at the hour of the breach. The merchant can likewise recoup other significant harms and intrigue. If a seller will not close on a property in the wake of marking a real estate contract, either because they adjusted their perspective or they got a superior idea from another person, they might be in breach of contract. Specific performance will, in general, be the favored solution for a purchaser when a seller breaches the business understanding. In any case, a purchaser is likewise qualified for harms including the price paid, title and escrow costs, the distinction between the price conceded to and the estimation of the property at the hour of the breach; costs in getting ready to enter the property; important harms; and intrigue.

Likewise, with any contract, the most ideal approach to maintain a strategic distance from a disagreement regarding a breach of contract is to have an unmistakable composed understanding that presents the desires and commitments of each gathering and envisions difficulties that may emerge. The most ideal approach to get ready for these difficulties is to join possibility statements into the contract and completely examine them before the gatherings execute the understanding. When managing real estate deals, there are regularly a ton of moving pieces: migration of an occupation, shutting off a past home, a dealer finding another home, a purchaser making sure about financing, and an effective home investigation. To get ready for these difficulties that can be envisioned, it is shrewd to remember the possibility conditions for your real estate contract so that if an issue emerges to where a possibility can’t be met, no breach will result.

Real Estate Contract Lawyer Free Consultation

When you need legal help with a real estate contract in Utah, please call Ascent Law LLC for your free consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews


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What Is A Real Estate Offering Memorandum

An offering memorandum is a legal document that states the objectives, risks, and terms of an investment involved with a private placement. This document includes items such as a company’s financial statements, management biographies, a detailed description of the business operations, and more. An offering memorandum serves to provide buyers with information on the offering and to protect the sellers from the liability associated with selling unregistered securities.

An offering memorandum, also known as a private placement memorandum (PPM), is used by business owners of privately held companies to attract a specific group of outside investors. For these select investors, an offering memorandum is a way for them to understand the investment vehicle. Offering memorandums are usually put together by an investment banker on behalf of the business owners. The banker uses the memorandum to conduct an auction among the specific group of investors to generate interest from qualified buyers. An offering memorandum, while used in investment finance, is essentially a thorough business plan. In practice, these documents are a formality used to meet the requirements of securities regulators since most sophisticated investors perform their extensive due diligence. Offering memorandums are similar to prospectuses but are for private placements, while prospectuses are for publicly traded issues. In many cases, private equity companies want to increase their level of growth without taking on debt or going public. If, for example, a manufacturing company decides to expand the number of plants it owns, it can look to an offering memorandum as a way to finance the expansion. When this happens, the business first decides how much it wants to raise and at what price per share. In this example, the company needs $1 million to fund its growth at $30 per share. The company begins by working with an investment bank or banker to draft an offering memorandum. This memorandum complies with securities laws outlined by the Securities and Exchange Commission (SEC). After compliance is met, the document is circulated among a specific number of interested parties, usually chosen by the company itself. This is in stark contrast to an initial public offering (IPO), where anyone in the public can purchase equity in the company. The offering memorandum tells the potential investors all they need to know about the company: the terms of the investment, the nature of the business, and the potential risk of the investment. The document almost always includes a subscription agreement, which constitutes a legal contract between the issuing company and the investor. An offering memorandum is a legal document that discloses the terms, conditions, risks, and other information about a private placement. It is not the same thing as a prospectus (those are for issuance of publicly-traded securities).

How Does an Offering Memorandum Work?

For example, let’s say Company XYZ is a private company that operates a chain of restaurants. It wants to raise $20,000,000 to open more restaurants, but it does not want to go public or borrow the money. So it decides to sell equity to investors in a private placement. In order to comply with state and federal securities laws, and in order to inform potential investors, Company XYZ writes an offering memorandum, which it circulates among interested parties. The offering memorandum details the terms of the transaction (such as the minimum investment amount, deadlines for purchasing shares, and investor qualifications), the nature of the business (including recent financials, a detailed description of the company’s operations, management biographies, customer data, financial forecasts, plans for the use of proceeds, and similar information), and the risks of the investment (including tax issues, litigation issues, and other company-level, industry-level, and economy-wide vulnerabilities). The offering memorandum usually includes a subscription agreement, which is the formal contract between the issuer and the investor for the purchase of the investment. In many cases, the law limits investors to those who are “accredited,” meaning they meet minimum net worth requirements and/or other requirements as dictated by the SEC and state laws.

Why Does an Offering Memorandum Matter?

Offering memorandums (also called private placement memorandums) are vehicles for raising capital. State and federal laws require them for most private placements, and they provide companies with a way to disclose key information to potential investors so that the investors can make informed decisions. This in turn provides protection for securities issuers as well.
Real Estate Offering Memorandum: Elements Every OM Should Include

How do you make an offering memorandum for a real estate deal?

An offering memorandum (OM) is typically published as a PDF and then shared with prospective investors. It covers a substantial amount of legal and marketing material, including an executive summary, deal structure details, risks and disclosures sections, and an investor suitability form. A securities or real estate attorney most often assembles your OM for you while sourcing transaction-related content from you.

Executive Summary

The Offering Memorandum begins with an executive summary, which lays out the high-level. In simple terms, the acquiring entity is seeking capital and there’s a brief description of your investment company (which may control or be the acquiring entity), its mission, the deal you’re pitching, a detailed description of the executives’ industry experience, and finally, deal financing requirements.

Location

Right after the executive summary, we jump into the location of the asset. Add images of the property’s location on a map, an aerial view of the site, and a second map highlighting important places (demand generators) near the property such as an airport, public transportation, restaurants and stores.

After describing the property’s physical location, insert multiple images of the actual property. For example, if it’s an apartment unit, add images of the interior, such as the kitchen and bathrooms. If the property is a retail center, show images of the different stores, the parking lot, and what visibility and access looks like from the street.

Investment Summary

The investment summary section covers various subtopics, each of which has its own separate section and brief description.

This section shows the amount of equity and debt to be raised, which are then add up to form the total sources of funds. You can copy and paste a screenshot into your OM from an excel model like in the example below. Also included shall be the uses of funds, including purchase price, closing costs, acquisition fee, working capital, and fronted capital expenditure, for example.

Loan Terms

The loan terms section is broken into the following subtopics:
• Loan amount: What is the approximate loan amount and the percentage of the purchase price it makes up.
• Borrower: Which entity will be borrowing and what kind of company it is.
• Interest rate: What is the locked interest rate?
• Term: How long is the term, and is it a fixed rate or variable rate?
• Amortization: Does amortization begin right away, or is there a period of interest-only servicing?
• Collateral: What collateral does the lender have on the deal

This table depicts the competitors in your market, where you stand against them, and each competing property’s financial information.

Every industry is different, whether residential, retail or another niche. Briefly describe what the specific industry for your property type is like in today’s market.

Similar to the industry overview, the market overview gives geographic specific insight on the real estate market where your building is located. Include facts about the city, such as population and financial status in addition to real estate market performance.

Risk Factors

Every real estate deal has multiple risk factors. This section should include every risk related to the business, tax, accounting, and legality of the property. There are often 10 to 20+ risks and each one should have its own paragraph description.

Real estate deals frequently receive support from accredited investors. This last section in the OM describes what types of investors the deal is suited for, and may be based on rules and regulations with regards to investor accreditation or general solicitation. These are the guidelines that concern the investors’ financial status and their ability to bear the risk of losing an investment.

Pull all of this info together into a neatly formatted document and you’ll be ready to start soliciting investments for your deal. It may take quite some effort to get all of this information, but having a complete and thoughtful offering memorandum that includes the sections suggested here will go a long way to instill confidence in your investors and serve as a guide throughout your process of issuing a new offering.

Real Estate Development Offering Memorandum

A real estate OM, or Offering Memorandum, is a document used to raise capital that outlines the securities rules and regulations, and the company’s terms to investors. When a company is seeking to raise money for building or construction pursues in the general real estate development industry, drafting a Offering Memorandum for such investment purposes is a standard. This is true for single family home projects to commercial developments to housing and condos.

Types of Offering Memorandums

There are many varying types of Offering Memorandums. The type of offering will determine the specific nature of the OM. The two-main private placement offering memorandum documents used throughout the world are an equity private placement or a debt private placement.

• Equity: In an equity offering, a company will sell an ownership stake. The most common type of equity Offering Memorandum is one that sells shares or stock in a company. In addition, an limited liability company (LLC) or a limited partnership (LP) may sell units, or limited partnership interests of the company. Some issue sweeteners, like preferred shares or preferred stock.

• Debt: In a debt offering, a company will sell securities such as a bond or a note. In a debt Offering Memorandum, a company will detail the securities being sold, such as the interest rate, maturity date, and other terms of the notes or bonds. In other types of debt issuance offering memorandums a company might offer convertible bonds or convertible notes. In this type of transaction, the debt securities will convert to equity at a pre-determined date.

• Rules: In addition to debt or equity, there are various national and in some cases, international rules that apply to each Offering Memorandum. For example, there is Rule 504, 505 and 506 of Regulation D (Reg D). Included in Reg D is also 506b and 506c offerings. There is also Regulation A (Reg A). A popular rule in the equity and debt private placement sphere is Regulation S (Reg S) and Rule 144A. Whether you require an equity OM or a debt Offering Memorandum, our team at Prospectus.com can assist.

Sections of an Offering Memorandum

There are many features and sections that go into the writing of an Offering Memorandum that is geared for raising capital. Here are just a few segments of the OM:

• Executive Summary: an executive summary is normally a one or two-page summary of the business plan. It’s always suggested to include an executive summary in a private placement offering memorandum document as this help explain what the business does.

• Jurisdictional Legends: the jurisdictional legends are specific country and state regulations governing the sale of securities in each jurisdiction. If it’s a US or Reg D offering, the jurisdictional legend will comprise of various states and rules for raising capital for selling stocks or bonds. If a company is raising capital worldwide they will use international legends that are country specific. Each country has their own rules regarding the flow of capital from outside investors and local investors.

• Terms of the Offering: the terms of the offering will highlight the relevant features of the issuance. Included in the offering term section will be the stock or share price, or bond or note price, investors requirements, use of proceeds, some risks factors, and, if a debt offering, the maturity date and interest rate. The terms of the offering are the main component of a Offering Memorandum.

• Investor Suitability: the investor suitability section of a OM will deal with investor standards. For example, if a company is raising capital and is required to only accept accredited investors then this section would detail that. Or if the suitability standards allow for non-accredited investors, or non-US investors under Regulation S (Reg S), or US investors in a 144A offering, the investor suitability section will detail that, which may include net worth requirements for each investor.

• Risk Factors: the risk factor section will deal with the pertinent risks of the business. Included in the risk factors would be industry specific risks that could materially affect the business, as well as micro and macro risks toward the company, including competitors, and factors outside the control of the company such as natural disasters, recessions and so. Listing the company’s risk factors is important as omissions can come back to haunt entrepreneurs.
• Management Team: the management team section will showcase the team’s skills, including the CEO and the support staff, and possibly even the board of directors or an advisory board. It is wise to include the strengths of the management team as this can help build investor confidence.
• Use of Proceeds: the use of proceeds section is one page or more that details where the company plans on spending the capital they are raising. The use of proceeds is not always the most elaborate chart, but should be a solid breakdown of the plan of where the proceeds from the offering will be spent.
• Tax Implications: the tax section of the Offering Memorandum will detail the implications for an investor. Most OMs will not detail the specific state tax requirements so each investor would be required to speak with their local accountant. For international clients, non-US (or not from the country of one’s offering), the tax implication will be important for profit and loss and each country will have their own rules.
• Subscription Agreement: the subscription agreement is a synopsis of the terms of the entire Offering Memorandum and acts as the contract between the issuing company and the investor. The agreement will outline the terms of the offering, and the securities being sold, such as the bonds, notes, stocks, shares, warrants, or convertible securities.
• Exhibits: one of the final sections of the OM is the exhibits, which are ancillary data related to the business of the company or the securities being sold. Examples of exhibits that go into a Offering Memorandum may be an image of a patent granted, or licenses or a company’s incorporation certificate.

Securities Law

A Offering Memorandum is meant for an issuing company to be compliant with both state and federal laws, no matter where the OM is issued. A company selling securities wants to ensure they do not break any laws when approaching investors and are exempt for registration requirements. For an investor to make an educated decision the OM should contain all the noted data above, including financial projections and past financial performance and of course the risk factors of the business and industry. Risk factor information will not scare away experienced investors who are most likely well aware of such language being placed in an Offering Memorandum. The important thing is make sure your company is compliant with securities laws and regulations when raising capital.

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84088 United States

Telephone: (801) 676-5506

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Notice Of Lien And Interest Holders

Notice Of Lien And Interest Holders

A lien is a legal claim or a right against property. Liens provide security, allowing a person or organization to take property or take other legal action to satisfy debts and obligations. Liens are often part of the public record, informing potential creditors and others about existing debts. The debt is now secured, and the lender has a better chance of getting repaid. Liens are possible anytime somebody has a legal right to somebody else’s property.

They’re typically part of an agreement to purchase real or personal property (home and auto loans, for example). Liens can also exist as a result of legal action. When you borrow to buy a home, the property serves as collateral. In your loan agreement, you agree to allow the lender to foreclose on your home if you fail to meet certain requirements. For example, you need to make monthly payments, insure the property, possibly live in it as your primary residence for several years, and more. Auto loans are similar to home loans. One difference is that instead of forcing you out of your home (which doesn’t go anywhere), your auto lender can take your vehicle from you through repossession. You won’t necessarily know when or where this happens ahead of time—it can happen while you’re at home, at work, or while you’re out-and-about. Car title loans can also result in liens filed with your local Department of Motor Vehicles (DMV).

Local governments and the IRS sometimes collect unpaid taxes with liens. Tax liens are particularly troublesome—taxing authorities can attach liens to current and future assets, they can collect from bank accounts relatively easily, and they might even be able to jump to the front of the line and collect before other creditors. The IRS generally gets to collect before your lender, for example, and bankruptcy might not be sufficient to discharge unpaid taxes. Local governments in need of funding can be especially eager to collect, but the IRS sometimes moves slower. A mechanic’s lien is a formal notice, filed with a court of appropriate jurisdiction, indicating a financial interest in property. Sometimes referred to as a contractor’s lien or a construction lien, this form details money owed to the contractor for either services rendered or materials provided on a construction or home or building improvement project. Without one, a contractor runs the risk of not being paid for work performed or services provided. When a property owner doesn’t pay a bill for work done on the property, the mechanic’s lien gives the contractor a security interest in the property and preserves the claim for payment.

Contractors should be cautious not to fall into a false sense of security about a mechanic’s lien. For a lien to be legal, it must be perfected. Each state has their own requirements for how to perfect a construction lien. This form is designed to protect contractors who, by their products or services, enhance the value of property. Consequently, they are most commonly used in new construction or improvements to property. However, the cost of the rental of a portable latrine, or the installation and removal of a security fence, while perhaps necessary for the comfort and safety of the workers, may not be subjected to a mechanic’s lien. This is because the latter does not increase the value of the property, while the new roof does. There is a priority to liens against the property. Generally speaking, liens take priority based on the order they are filed. Consequently, a first mortgage takes priority over this form, as the mortgage was filed first. However, this form may take priority over a second mortgage, depending on when the mechanic’s lien and the second mortgage were filed. Most unsecured creditors, such as the holders of credit card debt, medical bills, and personal loans, must first file a lawsuit, win the action, and get a money judgment before obtaining lien rights. With the judgment in hand, a judgment creditor can place a judgment lien on your real estate and occasionally on personal property depending on the state in which you live. Usually, a property tax lien takes priority over all other mortgages or liens on the property, even if the property tax lien was placed on the property after the other liens. If the taxes are not paid, the government can have your property sold to pay the property taxes. The government must follow whatever procedure the state prescribes, and you may have the opportunity to pay the taxes and costs and get your property back even after the “sale.” If you don’t pay your taxes, to protect its mortgage, the lender will usually pay the taxes and add that to your mortgage debt. Liens are also “perfected” or “unperfected”.

Perfected liens are those liens for which a creditor has established a priority right in the encumbered property with respect to third party creditors. Perfection is generally accomplished by taking steps required by law to give third party creditors notice of the lien. The fact that an item of property is in the hands of the creditor usually constitutes perfection. Where the property remains in the hands of the debtor, some further step must be taken, like recording a notice of the security interest with the appropriate office. Perfecting a lien is an important part of the task of protecting the secured creditor’s interest in the property. A perfected lien is valid against bona fide purchasers of property, and even against a trustee in bankruptcy; an unperfected lien may not be. Movers are typically entitled to a mover’s lien under UCC § 7-307/308, to withhold a customer’s goods to secure payment. This is a possessory lien, and is the non-consensual type of lien (because it exists automatically under a statute instead of being affirmatively agreed upon). However, the concept of a mover’s lien is often abused in a moving scam known as a hostage load, whereby the moving company will fraudulently extort money not owed by the customer by refusing to deliver the goods unless the customer pays money inflated beyond the contractual estimate. Because the customer has an interest in obtaining their own goods, they are under duress to pay the ransom. Hostage loads in at least the interstate context are illegal under 49 U.S.C. 13905. The FMCSA regulates the moving industry and sometimes takes enforcement action by fining and/or deli censure of offending moving companies. Moving companies that deliberately engage in hostage-loading may also be considered to be engaging in racketeering in violation of the Racketeer Influenced and Corrupt Organizations Act. Disputes between legitimate lien holding of chattels vs. hostage-loading can sometimes be averted by the customer including an advanced (before-the-fact) consensual waiver of the mover’s right to a lien in the written contract, obligating the moving company to deliver the goods with reasonable dispatch regardless of disputes over payment, and failure to do so would constitute conversion or trespass to chattels.

Common-law liens are divided into special liens and general liens. A special lien, the more common kind, requires a close connection between the property and the service rendered. A special lien can only be exercised in respect of fees relating to the instant transaction; the lienor cannot use the property held as security for past debts as well. A general lien affects all of the property of the lienee in the possession of the lienor, and stands as security for all of the debts of the lienee to the lienor. A special lien can be extended to a general lien by contract, and this is commonly done in the case of carriers. A common-law lien only gives a passive right to retain; there is no power of sale which arises at common law, although some statutes have also conferred an additional power of sale, and it is possible to confer a separate power of sale by contract. A common-law lien is a very limited type of security interest. Apart from the fact that it only amounts to a passive right to retain, a lien cannot be transferred; it cannot be asserted by a third party to whom possession of the goods is given to perform the same services that the original party should have performed; and if the chattel is surrendered to the lienor, the lien entitlement is lost forever (except for where the parties agree that the lien shall survive a temporary re-possession by the lienor). A lienee who sells the chattel unlawfully may be liable in conversion as well as surrendering the lien. In common-law countries, equitable liens give rise to unique and difficult issues. An equitable lien is a no possessory security right conferred by operation of law, which is similar in effect to an equitable charge. It differs from a charge in that it is non-consensual. It is conferred only in very limited circumstances, the most common (and least ambiguous) of which is in relation to the sale of land; an unpaid vendor has an equitable lien over the land for the purchase price, notwithstanding that the purchaser has gone into occupation of the property. It is seen as a counterweight to the equitable rule which confers a beneficial interest in the land on the purchaser once contracts are exchanged for purchase. The maritime lien has been described as one of the most striking peculiarities of Admiralty law.

A maritime lien constitutes a security interest upon ships of a nature otherwise unknown to the common law or equity. It arises purely by operation of law and exists as a claim upon the property concerned, both secret and invisible, often given priority by statute over other forms of registered security interest. Although characteristics vary under the laws of different countries, it can be described as: a privileged claim, upon maritime property, for service to it or damage done by it, accruing from the moment that the claim attaches, Travelling with the property unconditionally, Enforced by an action in rem. manufacturer’s lien a statutory lien that secures payment for labour or materials expended in producing goods for another. Mechanic’s lien (also sometimes referred to as an artisan’s lien, chattel lien, construction lien, labourer’s lien, in various jurisdictions). Municipal lien (United States) a lien by a municipal corporation against a property owner for the owner’s proportional share of a public improvement that specifically and individually benefits the owner. Notice of Lien means any “notice of lien” or similar document intended to be filed or recorded with any court, registry, recorder’s office, central filing office or other Governmental Authority for the purpose of evidencing, creating, perfecting or preserving the priority of a Lien securing obligations owing to a Governmental Authority. Notice of Lien means a record filed in the office of the secretary of state pursuant to this article that identifies one or more claimants with respect to a designated statutory lien; identifies, to the extent required by the applicable substantive statute, the property asserted to be subject to the lien; identifies the owner or owners of the property; and otherwise complies with the requirements of this article.

Notice of Lien means a notice that: a political subdivision records in the office of the recorder of the county in which a property. A lien is a notice attached to your property telling the world that a creditor claims you owe it some money. A lien is typically a public record. It is generally filed with a county records office (for real property) or with a state agency, such as the secretary of state (for cars, boats, office equipment, and the like). Liens on real estate are a common way for creditors to collect what they are owed. Liens on personal property, such as motor vehicles, are less frequently used but can be an effective way for someone to collect. To sell or refinance property, you must have clear title. A lien on your house, mobile home, car, or other property makes your title unclear. To clear up the title, you must pay off the lien. Thus, creditors know that putting a lien on property is a cheap and almost guaranteed way of collecting what they are owed sooner or later. Generally, creditors have the right to have real property sold to pay off the lien, usually by way of a foreclosure sale. But except for mortgage liens and tax liens, they rarely do so. This is because in most cases your mortgage was placed on the property before the liens and so must be paid off before any liens are paid. If the creditor forecloses on the lien, it has to keep up the payments on the mortgage or lose the property.

Lien Attorney Free Consultation

When you have a notice of interest or are a lien holder in Utah, please call Ascent Law LLC for your free consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

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Mortgage Servicing Rules And Foreclosure

Mortgage Servicing Rules And Foreclosure

Sometimes a homeowner can make a defense to a foreclosure based on a mortgage servicer’s violation of rules governing this industry. They also may have rights that they can assert under the federal Fair Debt Collection Practices Act (FDCPA). These defenses may not defeat the foreclosure entirely, but they may delay it or give you some leverage in negotiations. They also provide requirements for communications between the lender and the homeowner. If the lender fails to give you proper notice of the foreclosure under the rules, you may be able to delay the foreclosure until you receive notice. Also, if you submit your loss mitigation application 38 days or more before the foreclosure sale, this will trigger additional steps that the lender must take before proceeding with the sale. If it proceeds with the sale anyway, you can ask a court to cancel the sale, which will delay the process and give you more time to move or explore alternatives. You can also report a mortgage servicer to the Consumer Financial Protection Bureau (CFPB) if it violates these rules. People usually think of the FDCPA as a debt collection law, but it can be relevant to foreclosures in some cases. The language of the law is ambiguous, but some courts have ruled that a person or entity that tries to collect a payment on a mortgage or pursue a foreclosure can be defined as a debt collector within the meaning of the law. (Often, this will be the attorney of the foreclosing party.) On the other hand, some courts believe that the FDCPA does not cover foreclosures because collecting a debt is a different activity from enforcing a security interest. The U.S. Supreme Court will decide a case in the 2018-19 terms that will address whether the FDCPA applies to a non-judicial foreclosure, so this area of the law may change dramatically. Even if the FDCPA does not cover foreclosures, debt collection laws in your state may cover foreclosures. You can consult an attorney to determine whether your state’s law may extend further than the federal law.

Asserting Your Rights Under the FDCPA

The impact of the FDCPA on foreclosures often relates to the notice requirements under the law. A foreclosing entity that meets the definition of a debt collector must provide written notice within five days of first communicating with the debtor. This notice will identify the creditor, state the amount of the debt, and tell the consumer that they have 30 days to verify the debt. As a result, if you are at risk of foreclosure, you can dispute the existence or amount of the debt within 30 days of getting the notice. Continuing collection efforts before the debt is verified violates the FDCPA. Inappropriate charges that form part of the debt also violate the FDCPA, as does a failure to provide the homeowner with a verification of the debt. Moreover, failing to provide the homeowner with the required notice violates federal law. While identifying an FDCPA violation may not necessarily save your home, you can recover any monetary damages resulting from the violation, in addition to statutory damages up to $1,000. The Consumer Financial Protection Bureau is seeking comments through November 22, 2013 on an Interim Final Rule to address a small number of issues raised by mortgage servicers and others regarding the mortgage servicing and Home Owners Equity Protection Act (HOEPA) rules set to take effect January 2014. An Interim Final Rule is one that has already been approved and in this case, is scheduled to take effect January 10, 2014. However, the Bureau is nonetheless seeking comments on how stakeholders think they will be affected by the changes and further changes could be adopted to the Interim Final Rule before January.

The Interim Final Rule would amend:
• The Mortgage Servicing Rules under the Real Estate Settlement Procedures Act (Regulation X) (2013 RESPA Servicing Final Rule);
• The Mortgage Servicing Rules under the Truth in Lending Act (Regulation Z) (2013 TILA Servicing Final Rule); and
• The High-Cost Mortgage and Homeownership Counseling Amendments to the Truth in Lending Act (Regulation Z) and Homeownership Counseling Amendments to the Real Estate Settlement Procedures Act (Regulation X) (2013 HOEPA Final Rule).
The Interim Final Rule addresses these areas:
• How the certain issues regarding communications with borrowers under the servicing rules should be addressed in light of bankruptcy law and the Fair Debt Collections Practices Act (FDCPA); and
• Issues relating to communications with delinquent borrowers for early intervention.

Mortgage Servicing Rules for “Successors in Interest”

Effective as of April 19, 2018, successors in interest to property secured by mortgage loans that are covered by the Real Estate Settlement Procedures Act (“RESPA”) and Truth in Lending Act (“TILA”) now have certain rights under those acts. These amendments are part of the Consumer Financial Protection Bureau’s 2016 Mortgage Servicing Rule amendments to RESPA and TILA. The CFPB issued the new rules because “it had received reports of servicers either refusing to speak to a successor in interest or demanding documents to prove the successor in interest’s claim to the property that either did not exist or were not reasonably available.” The rules are therefore designed to make it easier for potential successors in interest to communicate with servicers and establish that they are successors in interest. At the outset, the new rules define a “successor in interest” as anyone who obtains an ownership interest in a property secured by a mortgage loan, provided that the transfer occurs under one of the scenarios listed in the new rule. The scenarios range from a transfer resulting from the death of the borrower to a transfer from the borrower to a spouse or child. The person does not have to assume the loan in order to be a successor in interest. The amendments create several potential pitfalls for servicers because certain obligations are triggered when a servicer receives actual or inquiry notices that someone might be a successor in interest. The amendments require servicers to “promptly” communicate with anyone who may be a successor in interest. Servicers must also only request documents “reasonably” required to confirm whether that person is in fact a successor in interest. And a “confirmed” successor in interest now has the same rights as the original borrower under RESPA and TILA mortgage servicing rules. Litigation is also inevitable because the amendments contain broad and imprecise language – such as “reasonably” and “promptly” that opens the door for lawsuits and cries for judicial interpretation.

A “successor in interest” is defined as “a person to whom an ownership interest in a property securing a mortgage loan subject to this subpart is transferred from a borrower, provided that the transfer is:
• A transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety;
• A transfer to a relative resulting from the death of a borrower;
• A transfer where the spouse or children of the borrower become an owner of the property;
• A transfer resulting from a decree of a dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement, by which the spouse of the borrower becomes an owner of the property; or
• A transfer into an inter vivo trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property.”

What should a servicer do when it receives correspondence from a potential successor in interest?

• Promptly respond and request documents: An aspect of the amendments that is bound to create headaches (and litigation) for servicers is that they have an obligation to respond when they receive correspondence providing actual notice that someone might be a successor in interest and when they receive a written request that puts them on inquiry notice that someone might be a successor in interest.

• Actual notice: Servicers must have policies and procedures to ensure that they “promptly facilitate communication with any potential or confirmed successors in interest” upon receiving “notice of the death of a borrower or of any transfer of the property.” Upon receiving the foregoing notice, servicers must then “promptly” request documents, determine the status of the person, and notify the person “that the servicer has confirmed the person’s status, has determined that additional documents are required (and what those documents are), or has determined that the person is not a successor in interest.” While it is unclear what constitutes a “prompt” determination, a determination is not prompt “if it unreasonably interferes with a successor in interest’s ability to apply for loss mitigation options according to the procedures provided in § 1024.41.”
• Inquiry notice: If a servicer receives any written request “that indicates that the person may be a successor in interest” and “includes the name of the transferor borrower” and “information that enables the servicer to identify the mortgage loan account,” a servicer shall respond by requesting, in writing, the documents the servicer reasonably requires to confirm whether the person is a successor in interest. The types of request that “indicate” the person may be a successor in interest are broad. For example, a written loss mitigation application from a person other than a borrower is a written request that indicates the person may be a successor in interest.

If the written request from the potential successor in interest does not have the required information, the servicer “may” respond by requesting more information. Servicers should also be mindful of the deadlines for responding to written requests for information under 12 C.F.R. § 1024.36(c) and 1024.36(d), which require acknowledging receipt within five business days and a substantive response within thirty business days.

• Request documents “reasonably” required to confirm the person is a successor in interest.

A “potential” successor in interest becomes a “confirmed” successor in interest if the servicer confirms “the successor in interest’s identity and ownership interest in a property.” But a servicer may only request “documents the servicer reasonably requires to confirm that person’s identity and ownership interest in the property.” The requested documents “must be reasonable in light of the laws of the relevant jurisdiction, the specific situation of the potential successor in interest, and the documents already in the servicer’s possession.” The servicer can also require documents it believes are necessary to prevent fraud or other criminal activity, e.g. if the servicer believes that the documents are forged. Subject to the foregoing, requesting a death certificate, executed will or court order might be reasonable. But it would be unreasonable to request certain probate documents when “the applicable law of the relevant jurisdiction does not require a probate proceeding to establish that the potential successor in interest has sole interest in the property.” Because the reasonableness requirement depends heavily on the relevant jurisdiction, servicers must take into account local laws when requesting documents.

How Do These Changes Impact RESPA And TILA?

A “confirmed successor in interest” is now a “borrower” for purposes of RESPA’s mortgage servicing rules and 12 C.F.R. § 1024.17 and a “consumer” for TILA’s mortgage servicing rules. 12 C.F.R §§ 1024.30(d) and 1026.2(11). Thus, a confirmed successor in interest is entitled to the same rights as the original borrower or consumer. For reverse mortgages, the changes only impact the rules that apply to reverse mortgages. See 12 C.F.R. § 1024.30(b). For example, a confirmed successor in interest is still not subject to the loss mitigation procedures in 12 C.F.R. § 1024.41, but a confirmed successor in interest is now entitled to a payoff statement under 12 C.F.R. 1026.36(c). There is no private right of action for claims by potential successors. While confirmed successors in interest have the same private right of action to enforce the rules as borrowers and consumers, the rules do not “provide potential successors in interest a private right of action or a notice of error procedure for claims that a servicer made an inaccurate determination about successorship status or failed to comply with § 1024.36(i) or § 1024.38(b)(1)(vi).” This, however, will likely not deter potential successors in interest from trying to assert such claims. Moreover, a confirmed successor in interest who has allegedly been damaged by a servicer’s failure to request documents “reasonably” required for the determination or a determination that was not “promptly” made might be able to assert claims under the new rules.
Coordination of Certain Mortgage Servicing, Bankruptcy and FDCPA Requirements.

The Bureau is clarifying compliance requirements in relation to bankruptcy law and the Fair Debt Collection Practices Act (FDCPA) through this rule and through a compliance bulletin the Bureau has issued. According to the CFPB, it has received a large number of questions from servicers about how the servicing rules relate to bankruptcy law and the FDCPA for example on issues such as how to communicate effectively with borrowers in light of their status in bankruptcy. The Bureau believes further analysis is needed to resolve some issues and may be issuing further amendments. In the meantime, the CFPB has addressed several issues in its new bulletin and interested parties are encouraged to read the bulletin. More specifically the bulletin:

• Confirms that servicers must comply with certain requirements of the Dodd-Frank Act and respond to certain borrower communications in accordance with the Bureau’s servicing rules even after a borrower has sent a cease communication request under the FDCPA.

• Provides a safe harbor from liability under the FDCPA with regard to such communications.

• In conjunction with the issuance of the bulletin, the Bureau is providing exemptions for other servicing communications that are not specifically required by the Dodd-Frank Act or other statutes. The exemptions will provide some relief for servicers in connection with the FDCPA and when the borrower has filed for bankruptcy. The exemptions are from:
• The requirement in § 1026.20(c) for a notice of rate change for adjustable-rate mortgages (ARMs) and the early intervention requirements in § 1024.39(d)(II) when a borrower has properly invoked the FDCPA’s cease communication protections.
• The early intervention requirements in § 1024.39(d)(II) and from the periodic statement requirements under 12 CFR 1026.41(e)(5) for borrowers while they are in bankruptcy.

Who Regulates Mortgage Lenders?

Mortgage lenders have to follow certain rules set forth by the federal government. These rules make sure lenders do everything they can to employ service that’s both fair and legal, and that they don’t take advantage of the general public. So, put simply, the federal government regulates the mortgage industry. It does this through a variety of agencies and a host of Congressional acts. The federal Truth in Lending Act (TILA) was designed to help protect consumers in their relationships with lenders. Regulation Z is the Federal Reserve Board regulation that implemented TILA. The act requires lenders to disclose information about their products and services to consumers, and aims to protect consumers from misleading practices by lenders. Another key component to mortgage regulation is the Real Estate Settlement Procedures Act (RESPA).

This act was enacted by Congress so buyers and sellers are given disclosures about the full settlement costs related to home buying. Mortgage lending came under heavy scrutiny following the 2008 financial crisis. Prior to the housing market crash, demand for mortgage-backed securities (MBSs) rose as investors became hungry for higher returns from their investments. Hedge Banks began relaxing their lending requirements, advancing mortgages to people with low credit scores often without any down payments at high interest rates. When values peaked, rates began to increase, making payments more expensive. Many homeowners were unable to afford their homes, and ended up defaulting, causing the market to crash. Because of the problems after the 2008 financial crisis, the Dodd-Frank Wall Street Reform and Consumer Protection Act piled on additional mortgage industry regulations to protect consumers, making regulations tougher against predatory lending and mortgage qualifying standards. Under changes signed into law in 2018, the act, escrow requirements for residential mortgages held by a depository institution or credit union are exempt under some conditions.

Mortgage Foreclosure Lawyer In Utah

When you need legal help with a mortgage or a foreclosure in Utah, call Ascent Law LLC for your free consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews


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Post Foreclosure Property Preservation

Post Foreclosure Property Preservation

When a bank or loan servicer takes possession of a home that has been through foreclosure, property preservation efforts are made to get the home prepared for potential buyers. Often, foreclosed homes are run down and need considerable renovation work before it’s possible to sell them. The sooner a bank or loan servicer sells the foreclosed property, the less money is lost. Therefore, property preservation efforts need to be handled quickly so that the bank or loan servicer recovers any lost funds as soon as possible. While a bank may prefer to sell a property without having to invest in property preservation, this is not often possible. Foreclosed homes are often left in such poor condition that banks cannot sell them even by reducing the asking price significantly. Usually, a property management or property preservation company needs to come in to perform any, several, or all of the following tasks:

• Boarding or securing: A vacant property needs to be secured to prevent thieves and vandals from damaging the property or carrying off appliances and equipment. Usually, a property’s lock is changed immediately after it is foreclosed on. Then, windows and doors may be boarded up while the home is cleaned and renovated. The home will be opened up again after it goes on the market and buyers begin to visit the property for viewings.

• Winterizing: Properties located in cold climates often need to be winterized so that cold weather doesn’t cause damage like frozen pipes or appliance malfunctions. Winterizing a vacant property typically involves draining the water lines and hot water tanks. Also, antifreeze is used in toilets and other plumbing fixtures. All the utilities in a vacant home are usually turned off as part of winterization efforts.

• Removing debris: Foreclosed homes are often in a state of disrepair. They are often littered with debris that could cause safety code violations or risks of infestation by pests. After foreclosure, a home is inspected and cleaned out.

• General cleaning: A major function of a property preservation company is to perform general housekeeping around the property. A dirty property will be unappealing to potential buyers, so contractors come in to vacuum, sweep, shampoo, dust, and mop until the property is presentable.

• Handling conveys maintenance orders: Putting a property in “convey condition” involves detailing information pertinent to ownership issues and mortgage issues regarding the home. Contractors need to verify that the priority is vacant and then detail all the maintenance that needs to be performed on the property.

• Maintaining a property’s lawn: A property’s value could drop if its lawn becomes overgrown. Also, an overgrown lawn can create a public nuisance and violate building or health codes. The bank or loan servicer currently in possession of the property will be held responsible for any code violations, so maintaining a property’s lawn is important.

• Removing snow: Some communities require property owners to keep sidewalks and driveways free of snow. Therefore property preservation companies have to come out to bank or loan servicer-owned properties to clear away snow build-up as necessary to address the property owner’s liabilities.

Buyers of properties that have previously been foreclosed on should be aware of any property preservation efforts that have been made to ensure that a home on the market has maintained its condition despite being vacant for an extended period of time. If preservation efforts are not made, it could cause damage that affects the home’s plumbing fixtures, appliances, and structural stability. When viewing homes, buyers should ask questions regarding what preservation efforts are being made so that they gain an understanding of the actual value and condition of the home. Banks sometimes foreclose on so many buildings it’s impossible to dispose of them quickly.

Offering to preserve and maintain foreclosed property requires actively marketing yourself to the banks and property management firms in your area. You and your teams also need the skills and licenses to do the job. The more services you offer, the more jobs you can take. Depending on your skill set, broadening your scope may require hiring employees or contractors, not to mention buying more equipment. When you’re just starting out, you can keep costs low by only taking jobs you can handle in-house with minimal equipment. Market research may tell you which services are most needed in your community. Property preservation is the process of caring for the inside and outside of a foreclosed property, be it vacant or occupied. Property preservation businesses work with banks and asset management companies to provide services such as repair, inspection, insurance claim management, and maintenance. Property preservation is also called “mortgage field services,” and getting involved with completing REO rehabs and property preservation repairs directly for national servicing companies will help your business succeed. Another great option is to work as a subcontractor for a company who also works with national servicing companies. In order to do this, you should become a Property Preservation Repair Vendor or an REO (real estate owned) Repair Vendor. REO, as you may know, stands for “real estate owned,” and is a real estate and property preservation term that organizations in the United States use to describe a certain class of real estate, or property. These properties are usually bank-owned properties that have been seized by the banks or lenders from residents who were unable to pay their mortgages. Once you’ve educated yourself about the property preservation business enough that you know what you’re doing, it’s time to find a few companies in your state, and fill out their online vendor applications. Keep in mind that banks are serious businesses you want your company to appear steady and reliable, so take all the usual precautions and they will want to work with you. You have to register online with the banks and other companies as they will not work with companies who have not. In order to get this work from banks, your company will have to actively market itself to the banks and the local property preservation companies in your state or area. This requires that your company and employees have all the skills and licenses necessary to perform property preservation so make sure you get those. In general, if you have more skills and more licenses stating that your are qualified to perform those skills, banks will be more interested in you, and send more work your way.

If you’re not comfortable calling people or speaking to them about your business, get comfortable. Some of the best recommendations in this business can come from word-of-mouth. If you’re already in the construction or repair business, you probably have some connections that can help you get started; if not, the banks and property preservation companies in your area can help you get started. When you first start out in the property preservation business, you should only take the jobs you can handle with limited personnel, doing them well and rapidly to make a name for yourself. As your business grows, and word-of-mouth or marketing does its job, you may want to take on larger job. HUD handles property preservation for properties that have been foreclosed on and will soon be foreclosed on – they also handle the property inspections, renovation permit, and access restrictions that they will pass on to you if you work with them. Always keep in mind while you are performing your work that part of your job is to make the properties look attractive to prospective buyers once the bank or management company is ready to resell them. Some people call this “curb-appeal,” and it’s a basic tenet of this business. HUD guidelines include property “accessories,” meaning swimming pools and spas and outbuildings like garages and sheds that may be on the property. There is also a registration fee that property preservation companies must pay on each property they want to care for – this fee may be reimbursed if the company owner completes the proper forms and submits to them HUD. Next, you need to meet at the property with your contractors (if you have them) and determine which repairs are necessary, and that the property can sit without much maintenance for a long period of time. Preparation for inclement weather is a large part of this step. While it’s true that many small property preservation businesses have a hard time getting off the ground and staying afloat, my best advice to you is to treat your business like your lifeblood, not like your side job. When you start a business, you want it to succeed, so it should be one of the most important things in your life. Don’t give up just because the going gets rough, and always provide the absolute best service to your clients and companies that you are capable of. Complete the work the way you were asked to, and take photos or write down issues you have for proof later. Remember, your clients need you, and your business will provide years of stability if you run it correctly.

If a homeowner is unable to complete repayments on their mortgage, they may be forced to default on the loan. If the owner defaults on the mortgage for a given number of months, the bank that originally loaned the homeowner the money to purchase the property can legally repossess it and take ownership of it. At this point, the property is referred to as a foreclosure or real estate owned (REO) home. The bank’s primary objective at this point is to recover as much cash from the loan as they can as opposed to accumulating real estate assets. As such, they will be motivated to sell the property as quickly as possible. Some homeowners take out a Federal Housing Association (FHA) insured mortgage. If the owner of a property that is backed by an FHA-insured mortgage defaults on loan repayments, he or she exchanges the property for an insurance claim payment through the Secretary of the Department of Housing and Urban Development (HUD), the Federal agents that manages national policy in this domain. Properties that have been traded in this manner are referred to as HUD homes. Both banks and the HUD will use the services of a private operative to sell the property on their behalf. The HUD refers to these contractors as management and marketing (M&M) contractors or asset management companies. These companies will also subsequently subcontract the sale and maintenance of the property to a third party, usually a realtor or local service provider. During this program, the companies that sell properties on behalf of the banks and HUD will be referred to as asset management companies (AMCs) or M&M contractors. As this program progresses, you will be taught the methods you can use to identify key AMCs, form productive relationships with them and position yourself as a key contact with whom they trade business opportunities. In addition, you will also learn how to identify and develop a network with the realtors who are awarded the REO listings. Forming effective relationships with such realtors will provide you with a further opportunity to secure profitable work. A foreclosure auction is just what it sounds like — an auction to sell a house that has been foreclosed on. You may have seen people on the HGTV channel who flip houses going to these auctions and bidding on foreclosed properties. Well, property preservation and REO businesses also deal directly with these foreclosed houses. At a foreclosure auction, the bank or lender who owns the property is not allowed to profit from the auction, and the properties are often sold at a loss. Any profit goes to the homeowner and any other liens that are present on the property. If the foreclosure auction doesn’t work, and the property doesn’t sell for any reason, it automatically becomes an REO property. Most of the properties you work on will be headed for foreclosure or may have already been foreclosed. Unfortunately (or fortunately depending on how you look at it), the majority will fall into the latter category. Luckily, this can mean big bucks for you. After the clean comes the makeover and, here too, you can offer your services and run a tidy profit in the process. Your customers will typically be banks, the HUD, realtors, and even investors. In many cities, local governments operate bylaws that specify that REO properties must be kept in a secure and good condition, both inside and out, at all times. Failure to do so can incur penalties of up to $1000.

As such, it’s in a lender’s/bank’s best interests to make sure the properties they own are kept in good condition at all times. The organization or entity that initially loaned the buyer the money to buy the home (the mortgagee) will be held responsible for maintaining it, regardless of whether the property was FHA-insured or not. In the case of an FHA-insured property, the mortgagees will have been pre-authorized by the HUD to spend a given amount of money on such maintenance work. We’ll talk about this in more detail on Day 5. If no FHA insurance was in place, the mortgagee or the people they appoint to manage the property on their behalf will set their own budget. Responsibility for preserving and securing REO properties is commonly allocated to an asset manager who works at the bank or is sub-contracted out to an asset management company (AMC) or M&M contractor. These groups or individuals will be tasked with reviewing the initial inspection report that the realtor or the realtor’s preservation company has published, and making the decision as to what aspects of the property should be restored and repaired and what should be replaced completely. They will also set a budget for the work and manage the tender process by which interested contractors bid for the opportunity to complete the project. Once the work is complete, they will also inspect it to ensure it is of an acceptable standard and will, ultimately, pay any invoices (we’ll discuss the important aspect of payment in a later session). In times of recession and downtown, there are a large amount of homes available for sale on the market and very few buyers. This makes property difficult to sell and means that foreclosed homes will be on the market for longer periods of time. To stand half a chance of selling them, banks and the HUD need to ensure that they are kept in good condition and maintained on a regular basis.

This is where you come in. Maintenance services involve a large number of tasks but typically include ensuring the interior and exterior of a property is kept clean and in good condition, maintaining any pool and outside areas and generally keeping everything in good shape. Providing these services can be lucrative because they are required on a monthly basis, giving you a steady stream of income. What’s more, if you were awarded the services to do the initial clean up and fix up, and you did a great job, you’ll have more of a chance of winning this ongoing business too. For this reason, when you prepare any quotation or bid for cleaning and/or transformation services, ensure you also include a section entitled “Optional ongoing maintenance services” in which you list tasks you are able to complete on an ongoing basis. Another top tip is to list “Optional decorating services,” “Optional repair services,” or similar. Sometimes an REO property can be on the market for a long time before the bank makes the decision to invest some additional cash into it in a bid to lure buyers. If you’ve planted the idea that you can provide painting and decorating services, you may also be given a chance to earn cash for interior decorating. Basically, you should ensure you take every opportunity to up sell additional services; you never know, you may just be taken up on them. Property preservation denotes a lender (or new owner if post-foreclosure sale) averting waste to the value of real property by repairing, securing, or maintaining the same, often times through third-party vendors. These steps could include (but are not limited to): changing locks, preventing squatters, winterizing to avoid damage, cutting grass to pre-empt a municipal lien, fixing damages such as broken windows, and other related precautionary measures. During the pre-foreclosure sale period, property preservation is governed by contractual obligations in the deed of trust. Once a foreclosure is complete, determining how to proceed requires evaluation of the home for signs of occupancy, extent of any damage, and remnants of any personal property. If the property is vacant, the new owner may change the locks and start the REO process.

Foreclosure Lawyer Free Consultation

When you need help with real estate foreclosure, please call Ascent Law LLC for your free consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

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4.9 stars – based on 67 reviews


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Recovery Of Attorneys Fees In Foreclosures

Recovery Of Attorneys Fees In Foreclosures

Mortgage contracts generally allow a servicer the company that handles the loan account to charge late fees, inspection fees, foreclosure costs, and other default-related fees to your account under certain circumstances, like when you are late on a payment or are in foreclosure. If the servicer charges fee and costs in excessive or incorrect amounts, this will unfairly increase the total balance you owe on your loan. If this happens to you in foreclosure, you can challenge those fees and costs. If your mortgage payment is late, your servicer may charge you a late fee. But servicers sometimes incorrectly assess late fees either inappropriately or in the wrong amount which can add hundreds of dollars on to the amount you owe on the mortgage loan. The servicer assesses a late charge during the grace period. Most mortgage contracts include a “grace period” of around ten or fifteen days. If you make your payment late, but during the grace period, there shouldn’t be a late fee. The servicer delays posting your payment to your account. If the loan servicer delays posting your payment to your account until after the grace period end, it can also result in an improper late fee. The servicer assesses an incorrect late charge amount. Late fees can only be assessed in the amount specifically authorized by the loan contract. The late charge amount is usually found in the promissory note.

Even then, state law may limit the amount that can be charged. If the state limit is lower than what the contract allows, it will generally override the loan contract. Most prime, conventional loan contracts allow the loan servicer to assess a late fee equal to 5% of the payment due. However, state law may limit the fee to, say, only 4%. If the loan documents and state law allow for different late fees, the servicer can only charge the maximum allowed by state law. In this situation, the late fee would be limited to 4% pursuant to state law. It is up to the borrower to make sure the servicer only charged 4% to the account, not 5%. The servicer illegally “pyramids” late fees. In some cases, servicers charge borrowers late fees on full payments that were made on time because the borrower didn’t include a payment for a previously unpaid late charge. “Pyramiding” occurs when the loan servicer takes the assessed late fees from the regular payment and leaves part of the scheduled payment overdue, which results in the assessment of another late charge. When the servicer does this, more and more late fees accumulate. Federal regulations, state law, and mortgage contracts usually prohibit this practice. According to the Federal Trade Commission, pyramiding of late fees is unfair to consumers. Regulation Z, which implements the Truth in Lending Act (TILA), also prohibits the pyramiding of late fees for mortgages covered by TILA. The servicer assesses post-acceleration late charges. In most cases, the servicer is prohibited from assessing late charges after the loan has been accelerated. (When a loan is “accelerated,” you have to immediately pay the entire balance of the loan, not just the past due amounts. This sets the stage for the foreclosure procedure to begin.) If you default on your mortgage payments (that is, you fail to make the mortgage payments), your loan servicer may assess particular charges to your account.

Default-related fees typically include:
• Property inspection fees
• Property preservation costs
• Foreclosure costs/fees, and
• Miscellaneous corporate advances.
Some states limit the amount of fees that can be charged pursuant to a default. For instance, charges may be limited to reasonable expenses, including costs and fees. Most mortgage contracts allow the servicer to take necessary steps to protect the lender’s rights in the property, including conducting property inspections to determine the physical condition or occupancy status of the mortgaged property. Inspections are generally ordered automatically once the loan goes into default. The charges for the inspections are then added to the total mortgage debt. The amount charged for each inspection, which is generally drive-by in nature). However, inspections might be performed monthly or more often, so the charges can add up quickly. Some courts have found that repeated inspections when the servicer is in contact with the homeowner, knows the property is occupied, and has no reason to be concerned about the condition of the property, are not necessary. The loan servicer may also assess costs for preserving the value of the property. Most courts have held that such fees must be reasonable in order to be collectable from the borrower. Generally, foreclosure costs must be reasonable and actually incurred before they are recoverable against the borrower. Most mortgages require the borrower to pay the lender’s foreclosure attorney’s fees as well. To be collectable, attorney’s fees must be reasonable and actually incurred. Additionally, some states limit attorneys’ fees in foreclosures. Corporate advances are expenses paid by the servicer to be recovered from the borrower. Corporate advances may include bankruptcy fees or force placed insurance costs, for example. If undefined corporate advances appear on your account, you should contact your loan servicer for an explanation to ensure they are appropriate for inclusion in the total amount owed. Borrowers may raise any number of defenses regarding improper late fees or other incorrect default-related fees. While some may constitute a full defense to the foreclosure, others will reduce the amount owed on the debt, thereby potentially decreasing any deficiency owed to the lender. (Learn more about deficiencies after a foreclosure.) If you want to challenge the fees being charged in a foreclosure action, you should speak to a qualified attorney who can advise you what defenses are available for your particular situation. Loan servicing records can be difficult to interpret and reconcile, so be sure the attorney is familiar with how to read loan servicing communication logs and payment histories.

A defendant/mortgagor who prevails in the successful defense of a mortgage foreclosure proceeding may be entitled to recover his reasonable attorney’s fees and expenses under Real Property Law. Whenever a covenant contained in a mortgage on residential real property shall provide that in any action or proceeding to foreclose the mortgage that the mortgagee may recover attorneys’ fees and/or expenses incurred as the result of the failure of the mortgagor to perform any covenant or agreement contained in such mortgage, or that amounts paid by the mortgagee therefore shall be paid by the mortgagor as additional payment, there shall be implied in such mortgage a covenant by the mortgagee to pay to the mortgagor the reasonable attorneys’ fees and/or expenses incurred by the mortgagor as the result of the failure of the mortgagee to perform any covenant or agreement on its part to be performed under the mortgage or in the successful defense of any action or proceeding commenced by the mortgagee against the mortgagor arising out of the contract, and an agreement that such fees and expenses may be recovered as provided by law in an action commenced against the mortgagee or by way of counterclaim in any action or proceeding commenced by the mortgagee against the mortgagor. Any waiver of this section shall be void as against public policy. For the purposes of this section, “residential real property” means real property improved by a one- to four-family residence, a condominium that is occupied by the mortgagor or a cooperative unit that is occupied by the mortgagor. In an appropriate case, where the mortgage provides for the recovery of the mortgagee’s attorneys’ fees and expenses, the above statute applies, and the subject real property constitutes residential real property (one family) that is the mortgagors’ home, the court may award the defendant legal fees and costs.
One of the considerations in deciding whether or not you should hire a lawyer to help you fight your foreclosure is the cost. It’s important to understand how legal fees work to make sure that you don’t end up paying more than you can afford.
Most foreclosure defense attorneys structure their fee agreements with homeowners in one of three ways:
• by charging the homeowner an hourly rate
• collecting a flat fee from the homeowner, or
• charging a monthly rate.
Hourly Rate
Some foreclosure defense attorneys charge an hourly rate for their services. The rate can range from around $100 per hour to several hundred dollars per hour. With this type of fee arrangement, the lawyer generally collects an initial retainer—an advance payment to the attorney before he or she starts to work on your case of several thousand dollars. The retainer amount and hourly rate varies widely, depending on the attorney’s experience and the customary rates in the area.
Pros and cons. The benefit to this type of fee arrangement is you’ll only pay the attorney for the amount of time he or she actually works on your case. The downside is that while the attorney will probably be able to give you a likely range of what you’ll pay in total, you won’t get an exact price as far as what the total cost of the foreclosure defense will be and hourly fees can add up quickly.
Flat Fee
Some attorneys charge a flat fee to represent homeowners in a foreclosure. Generally speaking, the fee can range from $1,500 to $4,000 depending on the complexity of the case.
Pros and cons. The benefit to paying a flat fee is that you know ahead of time exactly what the total cost of your foreclosure defense will be. Whether it takes five months or two years to dismiss the foreclosure or for the lender to complete the process you know that this is all you’ll pay. The downside is that not all foreclosure attorneys offer this option and you’ll have to pay the fee upfront, which is difficult for many distressed homeowners.
Monthly Rate
Some foreclosure attorneys charge an upfront retainer ranging from several hundred to several thousand dollars, and then a monthly fee (like $500) for each month that the foreclosure is pending. In addition, attorneys have been known to charge an extra fee on top of this called a contingent fee—if the case is dismissed as a result of the firm’s efforts.
Pros and Cons. The benefit to paying a monthly fee is that you know exactly what your attorney will cost each month without variation. Also, the attorney has an incentive to keep you in the property for as long as possible (if that’s your goal). The downside is that you must pay this amount each month, even if little activity takes place in your case during that time.
Late Fee Assessments
If your mortgage payment is late, your servicer may charge you a late fee. But servicers sometimes incorrectly assess late fees—either inappropriately or in the wrong amount which can add hundreds of dollars on to the amount you owe on the mortgage loan.

Here are some ways that can happen:
The servicer assesses a late charge during the grace period. Most mortgage contracts include a “grace period” of around ten or fifteen days. If you make your payment late, but during the grace period, there shouldn’t be a late fee. The servicer delays posting your payment to your account. If the loan servicer delays posting your payment to your account until after the grace period ends, it can also result in an improper late fee. The servicer assesses an incorrect late charge amount. Late fees can only be assessed in the amount specifically authorized by the loan contract. The late charge amount is usually found in the promissory note. Even then, state law may limit the amount that can be charged. If the state limit is lower than what the contract allows, it will generally override the loan contract.
Limits on late fees. Late fees are often limited by:
• the dollar amount that may be charged (typically a maximum of $10 or $15)
• the percentage of the payment that may be charged (generally 4% or 5%)
• the date on which the late charge can be assessed, and/or
• the payment amount on which the late charge is calculated. (For example, the late charge may be based on a percentage of the entire amount of the payment due, including principal, interest, taxes, and escrow amounts or it may be calculated based on a percentage of just the principal and interest due.)
The servicer illegally “pyramids” late fees. In some cases, servicers charge borrowers late fees on full payments that were made on time because the borrower didn’t include a payment for a previously unpaid late charge. “Pyramiding” occurs when the loan servicer takes the assessed late fees from the regular payment and leaves part of the scheduled payment overdue, which results in the assessment of another late charge. When the servicer does this, more and more late fees accumulate. Federal regulations, state law, and mortgage contracts usually prohibit this practice. According to the Federal Trade Commission, pyramiding of late fees is unfair to consumers. Regulation Z, which implements the Truth in Lending Act (TILA), also prohibits the pyramiding of late fees for mortgages covered by TILA. The servicer assesses post-acceleration late charges. In most cases, the servicer is prohibited from assessing late charges after the loan has been accelerated. (When a loan is “accelerated,” you have to immediately pay the entire balance of the loan, not just the past due amounts. This sets the stage for the foreclosure procedure to begin.)

Default-Related Fees
If you default on your mortgage payments (that is, you fail to make the mortgage payments), your loan servicer may assess particular charges to your account. Default-related fees typically include:
• property inspection fees
• property preservation costs
• foreclosure costs/fees, and
• miscellaneous corporate advances.
Some states limit the amount of fees that can be charged pursuant to a default. For instance, charges may be limited to reasonable expenses, including costs and fees.
Property Inspection Fees
Most mortgage contracts allow the servicer to take necessary steps to protect the lender’s rights in the property, including conducting property inspections to determine the physical condition or occupancy status of the mortgaged property. Inspections are generally ordered automatically once the loan goes into default. The charges for the inspections are then added to the total mortgage debt. The amount charged for each inspection, which is generally drive-by in nature, is typically minimal ($10 or $15). However, inspections might be performed monthly or more often, so the charges can add up quickly. Some courts have found that repeated inspections when the servicer is in contact with the homeowner, knows the property is occupied, and has no reason to be concerned about the condition of the property, are not necessary.
Property Preservation Costs
The loan servicer may also assess costs for preserving the value of the property. For example, property preservation costs may include fees advanced to:
• winterize the home
• replace locks
• repair windows
• restore utilities, and/or
• landscape the property.
Most courts have held that such fees must be reasonable in order to be collectable from the borrower.
Foreclosure Costs and Fees
Generally, foreclosure costs must be reasonable and actually incurred before they are recoverable against the borrower. Acceptable foreclosure costs include, among others:
• auction advertisements
• sheriff’s costs
• filing fees
• service of process, and
• certified mailings.
Most mortgages require the borrower to pay the lender’s foreclosure attorney’s fees as well. To be collectable, attorney’s fees must be reasonable and actually incurred. Additionally, some states limit attorneys’ fees in foreclosures.
Miscellaneous Corporate Advances
Corporate advances are expenses paid by the servicer to be recovered from the borrower. Corporate advances may include bankruptcy fees or force placed insurance costs, for example. If undefined corporate advances appear on your account, you should contact your loan servicer for an explanation to ensure they are appropriate for inclusion in the total amount owed.
Challenging Fees in Foreclosure
Borrowers may raise any number of defenses regarding improper late fees or other incorrect default-related fees. While some may constitute a full defense to the foreclosure, others will reduce the amount owed on the debt, thereby potentially decreasing any deficiency owed to the lender.
A few of the defenses that could potentially be raised are:
• breach of contract
• violation of state usury laws
• unfair and deceptive acts and practices
• unjust enrichment
• negligent servicing
• breach of fiduciary duty, and
• breach of good faith and fair dealing.

Foreclosure Lawyer Free Consultation

When you need an attorney to help with real estate law or a foreclosure in Utah, please call Ascent Law for your free consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

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