Fair-market-value cap on a deficiency
Utah Code § 57-1-32
In plain words
If the lender sues for a deficiency after a trustee sale, the court must find the home’s fair market value on the sale date. The deficiency cannot be more than what you owed (with costs and fees) minus that value. The lender must sue within three months of the sale.
Who is protected
Borrowers sued for a deficiency after a Utah trustee sale.
When it applies
- Only in Utah.
- Only after the foreclosure sale.
What you can do
Gather value evidence
Appraisals and comparable sales help lower a deficiency.
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Open the state page for the process, deadlines and legal-aid contacts in your state.
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Honest limits
- A deficiency can still be owed if the value was less than the debt.
- This is general education, not legal advice. Laws change and details matter — check the current official text or talk to a legal aid lawyer or HUD-approved housing counselor.
The law
- State lawDeficiency — fair market value
Utah Code § 57-1-32
What it says: The court must find fair market value and cannot award more than the debt minus that value.
Read the official texthttps://le.utah.gov/xcode/Title57/Chapter1/C57-1-S32_1800010118000101.html
Court cases
- Homeowner lostSame topicMartins v. BAC Home Loans Servicing, L.P.
Martins v. BAC Home Loans Servicing, L.P., 722 F.3d 249 (5th Cir. 2013)
a mortgage servicer acting for a properly assigned mortgagee may foreclose in Texas without possessing the original note, and an oral promise to modify a large loan is not enforceable
- Homeowner lostSame topicMilton v. U.S. Bank National Ass'n
Milton v. U.S. Bank Nat'l Ass'n, 508 F. App'x 326 (5th Cir. 2013) (per curiam) (unpublished)
an agreement to delay a Texas foreclosure falls within the statute of frauds and must be in writing to be enforced
- Homeowner lostSame topicBFP v. Resolution Trust Corp.
BFP v. Resol. Tr. Corp., 511 U.S. 531 (1994)
the price received at a non-collusive foreclosure sale that complied with state law is reasonably equivalent value under the Bankruptcy Code
Related rights
At least three months between the notice of default and the notice of sale
Utah Code § 57-1-24(2), (3)
A Utah trustee sale cannot be noticed until at least three months after the notice of default is recorded. Only then does the trustee give notice of sale (mailed, posted and published).
Read this rightThe government cannot keep your home equity beyond the tax debt
U.S. Const. amend. VTakings Clause
If your home is taken or sold to pay property taxes, the government may collect what you owe, but it may not keep the extra value. Keeping the surplus is a "taking" of your property without just compensation, which the Fifth Amendment forbids (Tyler v. Hennepin County, 2023). You may be able to claim the surplus, but you usually must follow your state's claim process and deadlines.
Read this rightAfter a discharge, creditors cannot collect the wiped-out debt from you
11 U.S.C. § 524(a)(2)
A bankruptcy discharge wipes out your personal liability for most debts in the case. After that, the law forbids creditors from suing, calling or otherwise trying to collect a discharged debt from you personally. A court can hold a creditor in contempt if there was no fair doubt that its conduct was barred.
Read this rightRenters get at least 90 days' notice after a foreclosure
12 U.S.C. § 5220 note(Pub. L. 111-22, div. A, § 702(a)–(b))
If you rent a home that goes through foreclosure, the new owner must give you a notice to move at least 90 days before you have to leave. If you have a real (bona fide) lease signed before the foreclosure notice, you can usually stay until the lease ends. The exception is when the new owner will live in the home; even then you still get the 90 days' notice.
Read this rightTax sale excess is held as unclaimed property for the owner
Utah Code § 59-2-1351.1(7)
If the Utah tax sale brings more than the taxes, charges, penalties, interest and costs, the excess is treated as unclaimed property. The former owner can claim it through the state unclaimed property program.
Read this right