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Legislative Bill Aimed at Foreclosures and Tax Deed Sales Hit a Snag

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By : Scott Zahid    99 or more times read
A legislative bill is currently pending at the Utah Legislature, which aims to help homeowners facing potential foreclosures and risks of losing their properties to foreclosure and tax deed sales. The bill, authored by Representative LaVar Christensen, is meant to make it easier for homeowners to renegotiate their loans. However, several bankers have pointed out flaws in the measure.

Last year, around 10,000 foreclosures in Salt Lake City, UT, and in the rest of the state have been recorded. Most market analysts identified banks' loose lending practices during the real estate boom as the reason for the state's foreclosure problem. They also cited changes in the procedure of recording property ownership as part of the problem as most troubled homeowners get drowned in the paperwork when they try to renegotiate their loans.

The bill aims to address the latter reason cited by analysts as it will require mortgage service firms to identify the entity or individual who will be responsible in meeting with homeowners if they seek mediation or mortgage modification even before Utah foreclosures are initiated. The provision was reportedly prompted by numerous complaints from homeowners that they were unable to get in touch with the real owner of their loans.

The measure is meant to control the rapid entry of tax deed sales as well as foreclosures in general into the system since it also includes a provision that could delay foreclosures by 90 days. However, some bankers have weighed in on the issue, arguing that it is almost impossible for property owners facing foreclosures to renegotiate their loans.

They stated that most of the mortgages associated with foreclosed homes have been sold so many times that they usually end at the hands of multiple investors who each have a say and a right to the mortgage. Bankers further added that ownership has been fractured in most of these mortgages as notes are passed on from one hand to another.

In response, proponents of the Christensen bill argued that the measure is still being ironed out and changes will be discussed to accommodate the concerns of bankers. Most of them believe that the measure will greatly help in addressing foreclosure and tax deed sales concerns in the state., your source of foreclosure home listings.

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