Can you tell me about Utah Foreclosure Law?
Hypothetical situation that I'd like to understand: If I have a $800K
mortgage on a $1MM house, and the house's value drops to say $750K,
and I decide that I don't want the house anymore, what can happen? If
I walk away from the house, and the bank sells the property at value,
the bank is still out $50K. Can they come after the borrower for the
$50K, and liquidate my other assets (stocks, e.g.) to pay for their
loss? I suppose if I'm broke I can declare bankruptcy and be on
horrible credit for 7 years.
Are there ways to protect my non-real estate assets from the mortgage
creditor?
First things first, DO NOT RELY ON THE INFO FROM THAT WEBSITE.
If you look around the web its a generic copy of some other sites
"foreclosure law info". They are all identical and they are all wrong or out
of date. For example, I deal with foreclosure in Washington, Oregon, Idaho,
Utah, Colorado, and Nevada, but im based in SLC. These websites like the one
you mentioned, state that utah uses a Judicial foreclosure, as if its the
standard. Almost No one uses judicial foreclosure in Utah or Washington for
that matter. The reason? Both states are Trust deed states or more correctly
Lien Theory States. That being said, very rarely do lenders pursue
deficiencies *unless* they know that the borrower has or might have
substantial assets. The poster who said that Ch 7 is 10 yrs and 13 is 7 yrs
is correct. This is a subject for another time, but how long its on there is
a pretty irrelevant question. The real question is how long does it hurt.
That answer depends on a few variables but its not 7-10 years. 5 at the most
and can be as little as 18 months. I also would say that if there is time
before the sale, there are other ways to take care of the situation without
just walking away and letting the chips fall where they may.