§ 57-1-24.3. Notices to default trustor -- Opportunity to negotiate foreclosure relief. (Effective 5/13/2014)

(1) As used in this section:

(a) "Beneficiary" means a financial institution that is the record owner of the beneficial interest under a trust deed, including a successor in interest.

(b) "Current address" means the address at which a person has agreed or requested to receive notices.

(c) "Default trustor" means a trustor under a trust deed that secures a loan that the beneficiary or servicer claims is in default.

(d) "Financial institution" means:

(i) a state or federally chartered:

(A) bank;

(B) savings and loan association;

(C) savings bank;

(D) industrial bank; or

(E) credit union; or

(ii) any other entity under the jurisdiction of the commissioner of financial institutions as provided in Title 7, Financial Institutions Act.

(e) "Foreclosure relief" means a mortgage modification program or other foreclosure relief option offered by a beneficiary or servicer.

(f) "Loan" means an obligation incurred for personal, family, or household purposes, evidenced by a promissory note or other credit agreement for which a trust deed encumbering owner-occupied residential property is given as security.

(g) "Owner-occupied residential property" means real property that is occupied by its owner as the owner's primary residence.

(h) "Servicer" means an entity, retained by the beneficiary:

(i) for the purpose of receiving a scheduled periodic payment from a borrower pursuant to the terms of a loan; or

(ii) that meets the definition of servicer under 12 U.S.C. Sec. 2605(i)(2) with respect to residential mortgage loans.

(i) "Single point of contact" means a person who, as the designated representative of the beneficiary or servicer, is authorized to:

(i) coordinate and ensure effective communication with a default trustor concerning:

(A) foreclosure proceedings initiated by the beneficiary or servicer relating to the trust property; and

(B) any foreclosure relief offered by or acceptable to the beneficiary or servicer; and

(ii) represent the beneficiary or servicer with respect to all foreclosure proceedings initiated by the beneficiary or servicer relating to the trust property, including:

(A) the filing of a notice of default under Section 57-1-24 and any cancellation of a notice of default;

(B) the publication of a notice of trustee's sale under Section 57-1-25; and

(C) the postponement of a trustee's sale under Section 57-1-27 or this section.

(2)

(a) Before a notice of default is filed for record under Section 57-1-24, a beneficiary or servicer shall:

(i) designate a single point of contact; and

(ii) send written notice to the default trustor at the default trustor's current address or, if none is provided, the address of the property described in the trust deed.

(b) A notice under Subsection (2)(a)(ii) shall:

(i) advise the default trustor of the intent of the beneficiary or servicer to file a notice of default;

(ii) state:

(A) the nature of the default;

(B) the total amount the default trustor is required to pay in order to cure the default and avoid the filing of a notice of default, itemized by the type and amount of each component part of the total cure amount; and

(C) a date, not fewer than 30 days after the day on which the beneficiary or servicer sends the notice, by which the default trustor must pay the amount to cure the default and avoid the filing of a notice of default;

(iii) disclose the name, telephone number, email address, and mailing address of the single point of contact designated by the beneficiary or servicer; and

(iv) direct the default trustor to contact the single point of contact regarding foreclosure relief available through the beneficiary or servicer for which a default trustor may apply, if the beneficiary or servicer offers foreclosure relief.

(3) Before the expiration of the three-month period described in Subsection 57-1-24(2), a default trustor may apply directly with the single point of contact for any available foreclosure relief.

(4) A default trustor shall, within the time required by the beneficiary or servicer, provide all financial and other information requested by the single point of contact to enable the beneficiary or servicer to determine whether the default trustor qualifies for the foreclosure relief for which the default trustor applies.

(5) The single point of contact shall:

(a) inform the default trustor about and make available to the default trustor any available foreclosure relief;

(b) undertake reasonable and good faith efforts, consistent with applicable law, to consider the default trustor for foreclosure relief for which the default trustor is eligible;

(c) ensure timely and appropriate communication with the default trustor concerning foreclosure relief for which the default trustor applies; and

(d) notify the default trustor by written notice of the decision of the beneficiary or servicer regarding the foreclosure relief for which the default trustor applies.

(6) Notice of a trustee's sale may not be given under Section 57-1-25 with respect to the trust property of a default trustor who has applied for foreclosure relief until after the single point of contact provides the notice required by Subsection (5)(d).

(7) A beneficiary or servicer may cause a notice of a trustee's sale to be given with respect to the trust property of a default trustor who has applied for foreclosure relief if, in the exercise of the sole discretion of the beneficiary or servicer, the beneficiary or servicer:

(a) determines that the default trustor does not qualify for the foreclosure relief for which the default trustor has applied; or

(b) elects not to enter into a written agreement with the default trustor to implement the foreclosure relief.

(8)

(a) A beneficiary or servicer may postpone a trustee's sale of the trust property in order to allow further time for negotiations relating to foreclosure relief.

(b) A postponement of a trustee's sale under Subsection (8)(a) does not require the trustee to file for record a new or additional notice of default under Section 57-1-24.

(9) A beneficiary or servicer shall cause the cancellation of a notice of default filed under Section 57-1-24 on the trust property of a default trustor if the beneficiary or servicer:

(a) determines that the default trustor qualifies for the foreclosure relief for which the default trustor has applied; and

(b) enters into a written agreement with the default trustor to implement the foreclosure relief.

(10) This section may not be construed to require a beneficiary or servicer to:

(a) establish foreclosure relief; or

(b) approve an application for foreclosure relief submitted by a default trustor.

(11) A beneficiary and servicer shall each take reasonable measures to ensure that their respective practices in the foreclosure of owner-occupied residential property and any foreclosure relief with respect to a loan:

(a) comply with all applicable federal and state fair lending statutes; and

(b) ensure appropriate treatment of default trustors in the foreclosure process.

(12) A beneficiary or servicer is considered to have complied with the requirements of this section if the beneficiary or servicer designates and uses assigned personnel in compliance with 12 C.F.R. 1024, Real Estate Settlement Procedures Act, or other federal law, rules, regulations, guidance, or guidelines governing the beneficiary or servicer and issued by, as applicable, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the National Credit Union Administration, or the Consumer Financial Protection Bureau.

(13) The failure of a beneficiary or servicer to comply with a requirement of this section does not affect the validity of a trustee's sale of the trust property to:

(a) a bona fide purchaser; or

(b) a beneficiary of the trust deed after the trust property is sold to a bona fide purchaser.

(14) Subsection (13) does not affect:

(a) a beneficiary's or a servicer's liability under applicable law; or

(b) a default trustor's right to pursue other available remedies, including money damages, against a beneficiary or a servicer.

Amended by Chapter 266, 2014 General Session