COMMON QUESTIONS

WHAT IS A NOTICE OF DEFAULT?

A notice of default is not something to take lightly. It means that the minor leeway a lender may have offered you has closed and you’ve defaulted on your loan. A financial institution can now legally proceed with any foreclosure sales or auctions at their express given consent. You have 3 months to bring your mortgage current after you receive a notice of default. Partial payments will not be accepted without approval from your bank and will typically require a loan modification approval.

HOW DO I AVOID A NOTICE OF DEFAULT ?

The easiest way to avoid a notice of default is often the most unrealistic one for many homeowners. It simply requires paying off any and all mortgage debt in full upon receiving a notice of default to trustor. Lenders, as we stated, are frequently unsympathetic to your given circumstances. However, no two financial institutions are alike. You may have both an excellent history and rapport with your given lender; and you can sometimes find that debt rearrangement plans can be easily obtained provided you have a long standing history with your bank.

WHEN DOES FORECLOSURE START?

Federal law generally requires the servicer to wait until the loan is over 120 days delinquent before officially starting a foreclosure. However, in a few situations, like if you violate a due-on-sale clause or if the servicer is joining the foreclosure action of a superior or subordinate lienholder, the foreclosure can begin sooner. (12 C.F.R. § 1024.41).

RIGHT TO REINSTATE BEFORE A FORECLOSURE SALE IN UTAH

"Reinstating" is when a borrower pays the overdue amount, plus fees and costs, to bring the loan current and stop a foreclosure. Utah law gives you three months after the trustee records the notice of default to reinstate. (Utah Code Ann. § 57-1-31).
Also, the deed of trust might give you more time to complete a reinstatement. Check the paperwork you signed when you took out the loan to find out if you get more time to bring the loan current and, if so, the deadline to reinstate. You can also call your loan servicer and ask if the lender will let you reinstate.