S.B. 143

1

MORTGAGE AND FINANCIAL AFFAIRS AMENDMENTS
2 2013 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Wayne A. Harper
5 House Sponsor: ____________
6
7 LONG TITLE
8 General Description:
9 This bill amends the requirements related to communications with a default trustor and
10 the foreclosure of trust deeds.
11 Highlighted Provisions:
12 This bill:
13 . defines terms;
14 . amends the qualifications and obligations of a single point of contact;
15 . limits the requirements described in this bill to beneficiaries that are also financial
16 institutions;
17 . clarifies where a beneficiary or servicer must send notices under this section; and
18 . makes technical changes.
19 Money Appropriated in this Bill:
20 None
21 Other Special Clauses:
22 None
23 Utah Code Sections Affected:
24 AMENDS:
25 57-1-24.3, as enacted by Laws of Utah 2012, Chapter 164
26
27 Be it enacted by the Legislature of the state of Utah:

28 Section 1. Section 57-1-24.3 is amended to read:
29 57-1-24.3. Notices to default trustor -- Opportunity to negotiate foreclosure relief.
30 (1) As used in this section:
31 (a) "Beneficiary" means a financial institution that is the record owner of the beneficial
32 interest under a trust deed, including successors in interest.
33 (b) "Current address" means the address at which a person has agreed or requested to
34 receive notices.
35 [(a)] (c) "Default trustor" means a trustor under a trust deed that secures a loan that the
36 beneficiary or servicer claims is in default.
37 (d) "Financial institution" means:
38 (i) a state or federally chartered:
39 (A) bank;
40 (B) savings and loan association;
41 (C) savings bank;
42 (D) industrial bank; or
43 (E) credit union; or
44 (ii) any other entity under the jurisdiction of the commissioner of financial institutions
45 as provided in Title 7, Financial Institutions Act.
46 [(b)] (e) "Foreclosure relief" means a mortgage modification program or other
47 foreclosure relief option offered by a beneficiary or servicer.
48 [(c)] (f) "Loan" means an obligation incurred for personal, family, or household
49 purposes, evidenced by a promissory note or other credit agreement for which a trust deed
50 encumbering owner-occupied residential property is given as security.
51 [(d)] (g) "Owner-occupied residential property" means real property that is occupied by
52 its owner as the owner's primary residence.
53 [(e)] (h) "Servicer" means an entity, retained by the beneficiary:
54 (i) for the purpose of receiving a scheduled periodic payment from a borrower pursuant
55 to the terms of a loan; or
56 (ii) that meets the definition of servicer under 12 U.S.C. Sec. 2605(i)(2) with respect to
57 residential mortgage loans.
58 [(f)] (i) "Single point of contact" means [a person] an individual or the individual's

59 replacement who, as the designated representative of the beneficiary or servicer, is authorized
60 to[: (i)] coordinate and ensure effective communication with a default trustor concerning:
61 [(A)] (i) foreclosure proceedings initiated by the beneficiary or servicer relating to the
62 trust property; and
63 [(B)] (ii) any foreclosure relief offered by or acceptable to the beneficiary or servicer[;
64 and].
65 [(ii) direct all foreclosure proceedings initiated by the beneficiary or servicer relating to
66 the trust property, including:]
67 [(A) the filing of a notice of default under Section 57-1-24 and any cancellation of a
68 notice of default;]
69 [(B) the publication of a notice of trustee's sale under Section 57-1-25 ; and]
70 [(C) the postponement of a trustee's sale under Section 57-1-27 or this section.]
71 (2) (a) Before a notice of default is filed for record under Section 57-1-24 , a beneficiary
72 or servicer shall:
73 (i) designate a single point of contact; and
74 (ii) send written notice [by United States mail] to the default trustor at the default
75 trustor's current address or, if none is provided, the address of the property described in the
76 trust deed.
77 (b) A notice under Subsection (2)(a)(ii) shall:
78 (i) advise the default trustor of the intent of the beneficiary or servicer to file a notice of
79 default;
80 (ii) state:
81 (A) the nature of the default;
82 (B) the total amount the default trustor is required to pay in order to cure the default
83 and avoid the filing of a notice of default, itemized by the type and amount of each component
84 part of the total cure amount; and
85 (C) [the] a date, not fewer than 30 days after the day on which the notice is mailed, by
86 which the default trustor [is required to] must pay the amount to cure the default and avoid the
87 filing of a notice of default;
88 (iii) disclose the name, telephone number, email address, and mailing address of the
89 single point of contact designated by the beneficiary or servicer; and

90 (iv) direct the default trustor to contact the single point of contact regarding foreclosure
91 relief available through the beneficiary or servicer for which a default trustor may apply, if the
92 beneficiary or servicer offers foreclosure relief.
93 (3) Before the expiration of the three-month period described in Subsection 57-1-24 (2),
94 a default trustor may apply directly with the single point of contact for any available
95 foreclosure relief.
96 (4) A default trustor shall, within the time required by the beneficiary or servicer,
97 provide all financial and other information requested by the [single point of contact]
98 beneficiary or servicer to enable the beneficiary or servicer to determine whether the default
99 trustor qualifies for the foreclosure relief for which the default trustor applies.
100 (5) The single point of contact shall:
101 (a) inform the default trustor about and make available to the default [trust] trustor any
102 available foreclosure relief;
103 (b) undertake reasonable and good faith efforts, consistent with applicable law, to
104 consider the default trustor for foreclosure relief for which the default trustor is eligible;
105 (c) ensure timely and appropriate communication with the default trustor concerning
106 foreclosure relief for which the default trustor applies; and
107 (d) notify the default trustor [by United States mail] in writing of the decision of the
108 beneficiary or servicer regarding the foreclosure relief for which the default trustor applies.
109 [(6) Notice of a trustee's sale may not be given under Section 57-1-25 with respect to
110 the trust property of a default trustor who has applied for foreclosure relief until after the single
111 point of contact provides the notice required by Subsection (5)(d).]
112 (6) If a default trustor applies for foreclosure relief and provides all information
113 required under Subsection (4), the trustee may not give notice of a trustee's sale under Section
114 57-1-25 until the single point of contact provides the notice required by Subsection (5)(d).
115 (7) A beneficiary or servicer may cause a notice of a trustee's sale to be given with
116 respect to the trust property of a default trustor who has applied for foreclosure relief if, in the
117 exercise of the sole discretion of the beneficiary or servicer, the beneficiary or servicer:
118 (a) determines that the default trustor does not qualify for the foreclosure relief for
119 which the default trustor has applied; or
120 (b) elects not to enter into a written agreement with the default trustor to implement the

121 foreclosure relief.
122 (8) (a) A beneficiary or servicer may postpone a trustee's sale of the trust property in
123 order to allow further time for negotiations relating to foreclosure relief.
124 (b) A postponement of a trustee's sale under Subsection (8)(a) does not require the
125 trustee to file for record a new or additional notice of default under Section 57-1-24 .
126 (9) A beneficiary or servicer shall cause the cancellation of a notice of default filed
127 under Section 57-1-24 on the trust property of a default trustor if the beneficiary or servicer:
128 (a) determines that the default trustor qualifies for the foreclosure relief for which the
129 default trustor has applied; and
130 (b) enters into a written agreement with the default trustor to implement the foreclosure
131 relief.
132 (10) This section may not be construed to require a beneficiary or servicer to:
133 (a) establish foreclosure relief; or
134 (b) approve an application for foreclosure relief submitted by a default trustor.
135 (11) A beneficiary and servicer shall each take reasonable measures to ensure that their
136 respective practices in the foreclosure of owner-occupied residential property and any
137 foreclosure relief with respect to a loan:
138 (a) comply with all applicable federal and state fair lending statutes; and
139 (b) ensure appropriate treatment of default trustors in the foreclosure process.
140 [(12) This section does not apply if the beneficiary under a trust deed securing a loan is
141 an individual.]
142 [(13)] (12) A beneficiary or servicer is considered to have complied with the
143 requirements of this section if the beneficiary or servicer designates and uses a single point of
144 contact in compliance with federal law, rules, regulations, guidance, or guidelines governing
145 the beneficiary or servicer and issued by, as applicable, the Board of Governors of the Federal
146 Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of
147 the Currency, the National Credit Union Administration, or the Consumer Financial Protection
148 Bureau.
149 [(14)] (13) The failure of a beneficiary or servicer to comply with a requirement of this
150 section does not affect the validity of a trustee's sale of the trust property [to a bona fide
151 purchaser].

Legislative Review Note
as of 1-23-13 1:28 PM

Office of Legislative Research and General Counsel

[Bill Documents]