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Home Mortgage Rates in Utah

Utah's home loan industry offers a full line of traditional loan products to homebuyers. These loans are regulated by laws that have created a unique foreclosure market in the Western United States. As a result, anyone interested in purchasing a foreclosed home in Utah should first understand something about how mortgages and foreclosures are handled in Utah.

In order to fully understand how mortgages and foreclosures are handled in Utah, here is some background information about Utah's home value and population trends.

Utah Real Estate Prices

Here is some information about Utah's median home value trends:

Cities in Utah have median home values that vary considerably against the nationwide median home price of $179,900.

To demonstrate this point, here are the January, 2010 median home values from highest to lowest for four of Utah's most popular cities:

  1. Draper ($268,761).
  2. Salt Lake City ($245,000).
  3. Logan ($169,900).
  4. Ogden ($148,500).

There are two reasons why Utah's median home values vary considerably against the nationwide median home price:

First, median home values tend to be higher in higher income cities such as Draper and Salt Lake City because residents who live here tend to have lower income demand elasticties for well-built homes in nicely situated areas. This is the case because most residents in these cities can afford to pay higher prices for nice homes. This has pushed the price prices in communities in resort towns like Draper and Salt Lake City well above the national average median price.

On the other hand, blue collar communities such as Logan and Ogden tend to have lower than average median home prices. This is the case because residents tend to have lower per-capita incomes and a lower cost of living than their higher priced counterparts.

As a result of these two factors, Utah's communities see median home values that vary against the nationwide median home price.

Utah's Population Trends

Here are the four biggest cities in Utah:

  1. Salt Lake City (181,698),
  2. West Valley City (123,447),
  3. Provo (118,581),
  4. West Jordan (104,447).

Many of Utah's most populated cities are holy places for the Mormon Church. Utah is one of the Mormon Church's cultural and spiritual bases. As a result, two of Utah's biggest cities are important symbols for people of the Mormon faith. These cities are Salt Lake City and Provo.

Furthermore, much of the state is rural and Utah's most populated cities also tend to suburbs of Salt Lake City. Two of Utah's most populated cities are suburbs of Salt Lake City. West Valley City and West Jordan are located within 30 minutes of Salt Lake City. These cities have also enjoyed growth as newcomers from Salt Lake City and the surrounding area have taken advantage of lower taxes and lower home prices.

Delicate Arch.

Utah's three fastest growing cities

Salt Lake City: Salt Lake City is one of Utah's fastest growing cities despite having one of the worst foreclosure rates in the Western United States. This is true because it enjoys a lower cost of living, lower unemployment rates and a greater than average per-capita income. Furthermore, many people of the Mormon faith have moved to Salt Lake City to take advantage of the social resources that are available there.

Provo: Provo is home to Brigham Young University. As more students have enrolled at BYU, Provo has enjoyed sustained growth due to an increase in jobs in industries such as the hospitality industry that cater to college students.

West Valley City: As a suburb of Salt Lake City, West Valley City is taking advantage of rapid growth along the western and southwestern ends of the Salt Lake Valley region. This growth has been made possible due to a lower cost of living and a younger work force who is taking advantage of growth in the technology industry.

Utah Mortgage Loans

Utah offers the following home loans to home buyers:

  • ARM's,
  • Fixed rate mortgages that range in maturity from 15-40 years,
  • jumbo loans,
  • home equity loans,
  • 2nd mortgages,
  • FHA government loans and
  • VA mortgages for US armed forces veterans.

These home loan products are recognized in Utah as either mortgage contracts or Deeds of trust. However, most lenders tend to use deeds of trust to govern home loans in Utah.

Utah Foreclosure Law

The home loan products generally have recourse protection in Utah. This is the case because lenders can try to recover a deficiency judgment against borrowers who must sell their homes in foreclosure proceedings.

However, as we shall see, these deficiency judgments can be difficult to obtain. This is true because borrowers in Utah may exercise their right to redeem a property at any time in the foreclosure process. Furthermore, this redemption right can be extended indefinitely by the court if it is deemed necessary.

To gain a better understanding of this, here is how Utah's foreclosure process works:

Utah recognizes both judicial and non-judicial foreclosures.

If a lender must go to court to obtain a judicial foreclosure, here are the steps that the lender must take.

  • First, the lender must go to court in the county where the home is to ask the judge formally for a foreclosure proceeding to happen.
  • Next, the judge must decide if the borrower is in default. If the judge believes the borrower is in default, he can issue a sale decree that will put the property up for sale.

Before this can happen, the judge must give the borrower a redemption period that allows the borrower one last chance to completely pay off the loan and the costs associated with the proceedings. This period of time can be extended indefinitely if the judge feels that it would give the borrower a fair chance to redeem the property. If the borrower cannot make good on his redemption pledge, the home goes up for sale in a manner described below for non-judicial foreclosures.

Here is information about how the non-judicial foreclosure process works in Utah.

Most lenders tend to pursue non-judicial foreclosures. This is the case because non-judicial foreclosures are easier to execute against borrower who have defaulted on their home loans. It is easier to execute a non-judicial foreclosure on a defaulted home loan because most home loan contracts in Utah are governed by a power of sale clause that automatically allows the lender to sell the house if the terms of the loan agreement are not followed.

As a result, it is a good idea to understand how the non-judicial foreclosure process works in Utah. Here is how that process works:

If the loan contract has provisions in the power of sale clause that explain how the home is to be sold, those provisions govern the sale of the home.

Otherwise, lenders must follow these steps to legally execute a non-judicial foreclosure in Utah:

  1. The lender must list the home for sale at least once a week for three weeks in a local paper where the home is located.
  2. The last ad must be placed in the same paper 10-30 days before the date of the sale.
  3. After listing the home for sale in the paper, the lender must place a sale notice at the county clerk's office and in a prominent location at the home site.
  4. Step 3 must be completed within 20 days of the proposed sale of the home.
  5. If steps one to four are done correctly, the sale happens at the county courthouse where the home is located.
  6. There are no legally binding minimum bids required at the sale. As a result, someone could theoretically buy a house for $1.00 at one of these sales.
  7. Once a final sale price has been reached, two things must happen before the home is transferred to its new owner:
    • First, all of the borrower's rights to redeem the property must be exercised. This can take a very long time to happen because the court can give borrowers as much time as they need to make an honest attempt to redeem the property.'
    • Afterwards, any deficiency judgment proceedings must be completed. This protects the new homeowner against any snags in the legal system that can happen during the proceedings. This is especially true in Utah because lenders can put a lien on a borrower's property to pay for any deficiency judgments.
  8. Finally, once step seven has been completed, the new home owner may take the home into his custody.
    • Since this process outlined in step 7 can take several months to complete, people who are interested in foreclosed properties in Utah should look for properties that have a power of sale clause attached to the loan documents to simplify the foreclosure process.