Foreclosure is a legal procedure in which a mortgage lender recoups some of its losses in the event of default by acquiring possession and/or ownership of the home that secured the loan in the first place in American Fork, Utah When a house is foreclosed, it is usually sold at auction shortly thereafter. This is because banks usually want to get rid of the property as soon as possible, even if it means losing some money, and an auction is an simple way to do this.
In all states in the United States, including Utah, foreclosure by judicial sale is an option. This allows the sale to be done under the supervision of a court, to ensure that the bank makes a good faith effort to get a fair price, and that the proceeds above and beyond the balance of the mortgage (if there are any) go back to the debtor. In some states, original mortgages are treated as "non-recourse" loans, meaning that, at most, the lender can take possession of the house in the event of foreclosure, even if it is worth less than the amount due. The bank cannot go after the borrower for the remaining balance once it sells the house. You should consult an attorney in American Fork, Utah to find out if this is the case here. This usually does not apply if the mortgage has been refinanced.
How Can I Avoid Foreclosure in Utah?
First of all, you shouldn't dismiss the problem. You should stay in contact with your bank, and be honest with them. Ignoring the issue will not make it go away. You should remember that banks in American Fork don't want your house. While the foreclosure process can be devastating for the homeowner, it's no walk in the park for the bank, either. They expected to make a profit through interest on the loan paid over time, and foreclosure is a last resort, allowing them to cut their losses and move on. If you are honest with them, lenders will usually try to accommodate your changed financial situation, to avoid a default on your part, and the necessity of foreclosing on their part.
If you can't work things out with your lender, there are other avenues. You can try a "short sale," which is when you sell your house for whatever amount you can get for it, and use the proceeds to pay your mortgage. If the house sells for less than you owe, the bank still receives those proceeds, but the remainder of the loan will be forgiven. You may also consider a "short refinance" which allows a portion of the debt to be forgiven, while refinancing the rest, hopefully under better terms.
How Can A American Fork, Utah Attorney Help?
If you are worried about foreclosure, a good American Fork, Utah real estate attorney may be able to help. An attorney can increase your chances of keeping your home, and help minimize the financial impact if keeping it proves impossible.