Trust Deed Foreclosure

forsaleWith the significant and long-term downturn of the economy, the number of homes and commercial building subject to the foreclosure process has increased dramatically.  Along with the increase in foreclosures, there has also be a rise as to fraudulent schemes, business purporting to be able to resolve the foreclosure and financial problems, and the dissemination of misinformation or bad information regarding what a person ought to do if they are facing a possible foreclosure.  There have been many individuals who faced foreclosure and other financial problems.  Some of these have been misled and duped out of money of their scarce financial resources from those touting false promises and alternatives which simply do not solve the financial problems.  Competent legal advice is essential to protecting yourself from schemes and touts.  Moreover, sound legal advice can help provide you with the education and information to make informed decisions about what options are legitimately available to you and which options best suit your particular circumstances.

What is a Trust Deed?

A trust deed is a document which is recorded with the local county recorder’s office to indicate that a particular parcel of real property is subject to a debt.  In the typical transaction, when you borrowed money from a bank or mortgage company to purchase your home or office building, you signed a trust deed which gave to the lender a security interest in your home or building.  When the loan is fully and timely repaid, the trust deed is then “reconveyed” by the lender – which releases the security interest (the “lien”) in the real estate and evidences that the loan has been repaid.

When you are unable to timely make your payments due on the loan secured by your real estate, the lender may “foreclose” its security interest in your real property.  By the trust-deed foreclosure process, the lender is able to sell your real property at a public auction as a means to collect the amount due on the loan.

What is a Deficiency Action?

A deficiency action may be brought against you in the form of a lawsuit if the fair market value of the real property foreclosed was insufficient to repay all amounts due under the loan.  If the fair market value of the real property at the time of the sale is less than the amount due under the loan, plus the costs and fees associated with the foreclosure process, then the lender may opt to file a lawsuit against you for the difference in the form of a money judgment.  If the fair market value at the time of sale is more than the unpaid loan balance, then the lender is deemed to have been paid in full and the lender may not sue you for a deficiency.

The lender must file a lawsuit to seek a deficiency within three (3) months after the date of the foreclosure sale.  If the lender does not initiate a lawsuit within that short time period, then the lender who foreclosed is barred by the statute of limitations and cannot sue you for the unpaid deficiency.  However, this short statute of limitation does not apply to junior mortgage holders (e.g., a second mortgage, equity-line of credit, etc).

What should you do if you are in foreclosure, or being threatened with foreclosure?

This question is an important question.  The correct answer and the options available depends highly upon your individual circumstances.  Some may suggest that you do a “Short Sale”.  However, a Short Sale may not be the best option for you.   Some may suggest a “Deed in Lieu of Foreclosure”.  This can be a positive, but it may not be an option for all of us.   Others may suggest filing bankruptcy.  However, all of these answers are fact sensitive and it is important that you obtain the right answer for you and your circumstances.  The sooner you obtain good, sound legal advice, the better informed and educated you are on the options, along with the pros and cons of each alternative and option.

Should I do a “Short Sale”?

This has been a popular alternative which is supported by many relators.  However, under your individual circumstances this may not be the best option for you.  And, a short sale may not end your liability with this particular mortgage or bank, but may, instead, actually increase your exposure to liability for a longer period of time.   You need to obtain independent advice from an attorney, who is objective and disinterested (i.e., he does not receive any commission from a possible short sale or other financial gain), and who can provide you with good legal advice so that you can determine whether or not a short sale is right for you and your circumstances.

If my house is foreclosed, how soon do I have to leave my house?

Living with uncertainty or making decisions based upon incorrect information can significantly add to your stress level.   Most families who are facing foreclosures have unanswered questions and are dealing with the stress caused by uncertainty.  One of the questions how soon after or before foreclosure does the family need to relocate from that home.  The answer is based upon your individual circumstances.  There is not one answer that fits all situations.  Moreover, there are alternative which you may have not considered or of which you have not been made aware.  A short consultation can provide you these answers and help reduce the stress and eliminate the uncertainty.


The attorneys at Farris & Utley, PC are well-acquainted with the trust deed foreclosure process and the alternatives and options available when you are facing the threat of foreclosure.  Telephone and set up a time to discuss your individual circumstances with an attorney who can provide you sound legal advice which is tailored to fit your individual circumstances.

Contact Information

2107 W Sunset Blvd, Second Floor
Saint George, UT 84770

Phone: (435) 634-1600
Facsimile: (435) 628-9323


Location Map