The Low Down Dirty Mortgage Poop
Utah’s rate of foreclosed homes has dropped 49% in the first three months of 2012. That should be great news for home sellers, right? Maybe property values will stabilize or stop falling? Hold onto your bootstraps-Salt Lake City is still in the top of the pile of mortgage muck for the nation in foreclosures, according to RealtyTrac, Inc (a national data track service). Data released last week by RealtyTrac Inc. shows one in 415 Utah housing units saw a foreclosure filing in March. That’s still behind the rates of most of our neighboring states but we’re in the top seven in the U.S. Arizona, Nevada and California are all about tied for bad news, in that-1 in 300 homes in those states are in the foreclosure process. In addition, Utah is 1:415, Colorado 1:591 and Idaho 1:839. And the really creepy part to these statistics is that RealtyTrac reported that more U.S. homes in general are entering the foreclosure process this year and “setting the stage for a surge in properties repossessed by lenders this year.”
Hear that wet sucking sound as you pull your shoe out of the mortgage mud? That’s the unpleasant noise of more foreclosures, which equals lower home prices. As a seller, that stinks. For buyers, this is great because lower prices means better deals. Even if Utah may be experiencing a brief respite from foreclosure filings, the nation is up 7% this year in first time foreclosure notices says RealtyTrac, Inc.
How does a foreclosure work here is Utah? First, we don’t have state laws that usually make your lender take you to court if you’re late on your payments. Most lenders just have to file a notice of default against you after you’ve become late at the County Recorder’s office. The lender can do it in person or on line. They also have to send you a notice of default to the address they have on file on you. Once that notice is filed, you get three months before the property is sold at public auction…supposedly regardless if you claim you never received the notice.
You can make up your payments and any late fees within those three months. Be very careful how you make the payments to the lender to insure you get confirmation they’ve received the monies. If you don’t pay up though, 20 days before the ‘sale date’/ auction date a notice is taped up, stapled or nailed onto your property for you and all your neighbors to see. I saw a notice the other day when I was visiting friends at a townhome. The paper was attached with blue tape onto the middle of the front door of a vacant property next door my friends townhome. We walked over to get a look at what the notice said as we were leaving for dinner. By the time we got back from our meal, the notice had been removed. It’s embarrassing as hell to have a foreclosure notice put on your property! The lender also may run three weeks of ads in the local paper about the sale (per law) to add salt to the wound.
Foreclosure sales are held as public auctions at the county courthouse with the property going to the highest bidder. If the sale price is above and beyond the amount owed to the lender, the extra monies go first to any junior lien holders and then to the borrower.