One of the first steps you should take in resolving your delinquent mortgage is educating yourself about the Utah foreclosure process
and the different foreclosure prevention options that may be available to you. Following are the most common foreclosure prevention options. Everyone's situation is different, and some of these options may not be available to you. To learn more about your options for preventing the foreclosure of your Utah home, please give me a call or fill out my Rapid Response Form
Foreclosure prevention may result in you keeping or losing your home. If your goal is to retain your home, you must be able to prove to the lender with financial documentation that you have overcome the hardship that caused you to default, and that you are financially able to make a mortgage payment. Not all lenders use the same guidelines, but here are the most common options offered by lenders to avoid foreclosure on Utah real estate.
Bring the loan current by paying all monies past due, including late fees and attorney costs.
This is rarely an option, and usually only possible if the mortgage default problems are caught early. There must be enough equity in the home to pay off the current loan and processing fees, while still keeping the new lender in a good equity position. If you have equity in your Utah home, there are lenders out there that will look past credit damage (but you can expect a very high interest rate). Your payments will most likely increase rather that decrease with a refinance.
Your lender does not want foreclosure. If you have the ability to make the scheduled monthly payment on your home, but you cannot catch up the back payments, we may be able to negotiate a repayment plan that would allow you to pay the back payments in smaller increments. This is another of the many ways to avoid a foreclosure of your Utah home.
This is a formal or informal repayment plan to reinstate a loan that has been delinquent. This could include suspension or reduction of payments for one or more months to allow you to recover from the cause of default; and/or an agreement to allow you to resume making full monthly payments while delaying repayment of the delinquent amount.
This is a permanent change in one or more terms of your current loan agreement. This could include a change in the interest rate, extension of the time available to repay the loan or re-amortization of the balance due. Through the economic stimulus plan, lenders are being incentivized by the government utilizing the Making Home Affordable program to provide Loan Modifications to homeowners at risk of losing their homes.
This option utilizes a buyer who is willing to lease-option the property back to you for a certain length of time, giving you the option to repurchase the home after you have rebuilt your credit. This foreclosure prevention option is enticing to some Utah homeowners because they avoid having to relocate.
Pre-Foreclosure Sale Utah Short Sale
If one of the retention options is not feasible, or if you simply aren't in a position to keep your home, your lender will often allow you extra time to market and sell your home, even if the market value is less than the amount owed on your mortgage. If you do not have the equity in your home to pay off your current lender along with any costs associated with the sale of your Utah home (agent commissions, closing costs, advertising costs etc.) your lender may accept a "Short Sale." This means that your lender will accept less than the amount owed on your mortgage to release their lien against the home.
Deed-in-lieu of Foreclosure
If you cannot or do not want to keep the home and are unable to sell the property through a pre-foreclosure sale you lender may allow you to deed the property to them in exchange for a release from all obligations under the mortgage.
If all other options fail, Utah bankruptcy may be used as a last resort. Be aware that bankruptcy does not necessarily stop Utah foreclosure. It often only stalls foreclosure. If you file bankruptcy and your home in non-exempt, your lender will eventually foreclose and you will end up with both a foreclosure and bankruptcy on your credit.
Once again, every situation is unique and requires individual attention. For more information about foreclosure prevention options in the state of Utah, please fill out my Rapid Response Form.