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I have a 2nd home in utah. It is currently in for a deed in…

Customer Question
I have a 2nd home...
I have a 2nd home in utah. It is currently in for a deed in foreclosure after 1 year of trying to short sell. It also has mortgage insurance on it, so there is a 2nd.

Im trying to know what happens if they do not accept and foreclose.

For a second home, what are the statures for deficiency judgement? and is it the mortgage insurance company that will come after me for the deficiency?

Will I be able to negotiate and settle with bank before they go to court if they seek a judgement?
Submitted: 8 years ago.Category: Real Estate Law
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Answered in 6 minutes by:
6/9/2010
Real Estate Lawyer: Teacher Editor, Instructor replied 8 years ago
Teacher Editor
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Deficiency judgments are permitted in Utah. With the economy, the house may not actually be sold for up to a year or even longer so you can stay in the house during that time. After the house is sold, they may or may not come after you for the def. judgment depending on the mortgage company and the circumstances at the time.

 

This would be treated the same as any other judgment and they (the mortgage company that you owe) may garnish your wages for it in the future to cover the judgment. You can protect yourself by filing bankruptcy or waiting for it to happen to see what you want to do when you see the amount they are asking for. When they start suit, you will be able to call up the attorneys office and see if they want to negotiate. I would say this is years off, however.



Edited by Linda Roch on 6/9/2010 at 5:44 PM EST
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Customer reply replied 8 years ago
In utah, once they foreclose, it was my understanding that they have a 90 day to file for a judgement.

Is that correct?

And, do I have a chance to settle with the bank before they go for a deficiency?

If there is mortgage insurance, doesn't that make the bank or note holder whole?
Real Estate Lawyer: Teacher Editor, Instructor replied 8 years ago

You're right except that once they file for a judgment does not mean that they will try to collect right away. Between the judgment and the sale date, months may go by. They will only be able to collect once they sell the property (otherwise they won't know how much the def. will be for). Once that happens, which may take up to a year, they may go back to court to force the mortgage insurance to pay the difference (sometimes they will not). Then, they will summon you back to court and at that point you can try to see if you can settle with them or other options that you may have. So it will take much more than 90 days for all of this to happen.

 

Your mortgage insurance is a contract between the mortgage company and the insurance company to protect the mortgage company. Usually, they only cover about 20% of the mortgage value so the mortgage company may still come after you for any amount that was not covered. However, not all mortgage companies come after customers for def. amounts so you just have to wait and see what happens but the mortgage insurance won't protect you against the whole amount most likely depending on what the def. amount will be.

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