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7 LONG TITLE
8 General Description:
9 This bill enacts a provision relating to the foreclosure of trust deeds.
10 Highlighted Provisions:
11 This bill:
12 . requires a beneficiary or special servicer to appoint a single point of contact upon
13 determining that a loan secured by a trust deed on residential, owner-occupied
14 property is in default;
15 . requires notice to a default trustor before and within 30 days after a notice of default
16 is filed;
17 . allows a default trustor to make application for foreclosure relief or to enter into
18 negotiations for foreclosure relief;
19 . establishes duties in the process of negotiating foreclosure relief;
20 . requires foreclosure proceedings to be suspended if a default trustor successfully
21 perform trial period modifications and the beneficiary or special servicer has the
22 legal ability to do so; and
23 . allows a default trustor to extend the foreclosure period by a month, no more than
24 twice, by paying a monthly payment under the loan.
25 Money Appropriated in this Bill:
27 Other Special Clauses:
29 Utah Code Sections Affected:
31 57-1-24.3, Utah Code Annotated 1953
33 Be it enacted by the Legislature of the state of Utah:
34 Section 1. Section 57-1-24.3 is enacted to read:
35 57-1-24.3. Notices to default trustor -- Opportunity to negotiate foreclosure relief.
36 (1) As used in this section:
37 (a) "Beneficiary" means the legal holder of a note and trust deed.
38 (b) "Default trustor" means a trustor under a trust deed secured by owner-occupied
39 residential property that is the subject of a notice of default under Section 57-1-24 .
40 (c) "Loan" means an obligation, evidenced by a note, for which a trust deed is given as
42 (d) "Owner-occupied residential property" means real property that is occupied by its
43 owner as the owner's primary residence.
44 (e) "Single point of contact" means a person who:
45 (i) exercises authority to direct the trustee under a trust deed to file a notice of default
46 under Section 57-1-24 ;
47 (ii) is the sole manager of the note and trust deed and of communications with the
48 default trustor and other primary obligors; and
49 (iii) has authority or can obtain authority to negotiate foreclosure relief with a default
51 (f) "Special servicer" means a person duly authorized to act on behalf of a beneficiary.
52 (2) Upon determining that a loan is in default, a beneficiary or special servicer shall
53 appoint a single point of contact.
54 (3) (a) No later than 30 days before the filing of a notice of default under Section
55 57-1-24 and in an effort to encourage the default trustor to contact the beneficiary or special
56 servicer to determine whether there is a reasonable prospect for successful foreclosure
57 mitigation, the single point of contact, on behalf of the beneficiary or special servicer, shall
58 send notice by United States mail to the default trustor of the intent of the beneficiary or special
59 servicer to file a notice of default.
60 (b) A notice under Subsection (3)(a) shall include:
61 (i) the name, telephone number, email address, physical location, and other direct
62 contact information of the single point of contact;
63 (ii) the reason for the intent to file a notice of default; and
64 (iii) the full amount the default trustor is required to pay in order to cure the default and
65 avoid the filing of a notice of default, broken down by the type of each component adding up to
66 the full amount, and the date by which the default trustor is required to pay that amount.
67 (4) (a) No later than 30 days after the date a notice of default is filed under Section
68 57-1-24 , the single point of contact, on behalf of the beneficiary or special servicer, shall send a
69 notice to the default trustor by United States mail.
70 (b) A notice under Subsection (4)(a) shall include:
71 (i) the name, telephone number, email address, physical location, and other direct
72 contact information of the single point of contact;
73 (ii) the reason the notice of default was filed;
74 (iii) the full amount the default trustor is required to pay in order to cure the default and
75 avoid the posting of a notice of sale of the trust property, broken down by the type of each
76 component adding up to the full amount, and the date by which the trustor is required to pay
77 that amount; and
78 (iv) a description of any mortgage modification program or other foreclosure relief
79 option available that may, at the reasonable discretion of the lender, provide foreclosure relief
80 or assistance in obtaining foreclosure relief, if the default trustor qualifies.
81 (5) Upon receiving a notice under Subsection (3), a default trustor may:
82 (a) make application directly with the single point of contact for foreclosure relief or
83 assistance; or
84 (b) enter into negotiations as provided in this section.
85 (6) The single point of contact shall:
86 (a) represent the interests of the beneficiary; and
87 (b) negotiate in good faith on behalf of the beneficiary with respect to all aspects of the
88 foreclosure, including foreclosure relief, loan modification or forbearance, deed in lieu of
89 foreclosure, consideration of a short sale, or any other reasonable alternative to foreclosure.
90 (7) Any action that a default trustor may take under this section may be taken by the
91 default trustor's authorized representative.
92 (8) A single point of contact, on behalf of the beneficiary or special servicer, has an
93 express duty to:
94 (a) be reasonably available for and cooperate in negotiations with a default trustor
95 during the three-month period described in Subsection 57-1-24 (2); and
96 (b) negotiate with a default trustor regarding any reasonable alternative to foreclosure,
97 including a loan modification or forbearance, discounted payoff, short sale, or deed in lieu of
99 (9) A beneficiary or special servicer shall suspend foreclosure proceedings if:
100 (a) a default trustor successfully performs trial period modifications; and
101 (b) the beneficiary or special servicer has the legal ability to do so under any applicable
102 servicing contract.
103 (10) A default trustor engaged in good faith negotiations under this section with a
104 single point of contact for foreclosure relief may extend the period described in Subsection
105 57-1-24 (2) by one month, no more than twice, by paying the beneficiary during the period
106 described in Subsection 57-1-24 (2), or during an extension of that time under this Subsection
107 (8), an amount equal to a full month's payment due under the loan.
108 (11) A beneficiary, special servicer, and single point of contact shall align their
109 practices in the foreclosure of owner-occupied residential property and any modification of a
110 loan secured by that property with all applicable federal and state fair lending statutes.
111 (12) A default trustor shall provide to a single point of contact all financial information
112 and other reasonable information requested by a beneficiary or special servicer within the time
113 required by the beneficiary or special servicer, to enable the beneficiary or special servicer to
114 give reasonable consideration to the default trustor's request for foreclosure relief.
Legislative Review Note
as of 2-2-12 9:25 AM