You likely know that if you don’t make timely mortgage payments, the bank can sell your house and pay off the debt in a process called foreclosure. In Wyoming, the bank can choose between two foreclosure types. A judicial foreclosure cannot proceed without court approval. By contrast, a nonjudicial foreclosure—the type the bank will likely use—allows the lender to skip the court process. Instead, the bank will complete steps outlined in state law. In this article, you’ll learn about foreclosure in Wyoming, as well as about rights that might help you retain your home.
(If you’d prefer starting with the basics, read Foreclosure and Your Home: Understanding the Process, Your Rights, and Your Options.)
An Important Right: The 120-Day Workout Period
Currently, federal law gives a homeowner facing a foreclosure time to recover from a financial setback. Specifically, a bank can’t start foreclosing on a home until the borrower is more than 120 days delinquent. This waiting period allows you to get caught up on a mortgage payment or gives you the time you’ll need to apply for a loan workout (such as a loan modification).
If you complete and submit a loss mitigation (workout) application before the foreclosure begins, the foreclosure can’t start until the bank evaluates your paperwork. If the bank approves you for a loss mitigation plan, and you accept the deal offered, the foreclosure must stop. It can’t proceed unless you stop making the plan payments or you breach the agreement in some other way.
(For information about the federal restriction on starting a foreclosure, read Delaying Foreclosure: The Dodd-Frank Act 120-Day Rule.)
Judicial and Nonjudicial Foreclosure
Below are summaries explaining how each foreclosure type works in Wyoming.
Judicial foreclosure. A judicial foreclosure starts when the bank files a lawsuit against the borrower with the court. If a borrower fails to answer the suit within the given time limit, the bank will win by default and receive a judgment giving the bank the right to move forward with a foreclosure sale. After selling the home, the bank will use the sales proceeds to satisfy the loan. By contrast, the borrower can force the case into litigation by answering the suit. The court will evaluate the evidence and determine which side prevails. If the bank wins, it will hold the foreclosure sale.
Nonjudicial foreclosure. A nonjudicial foreclosure involves a series of out-of-court steps described in state law. The foreclosure sale can occur after the bank completes the procedures.
(Get more details about the two types of foreclosure in What Are the Differences Between Judicial and Nonjudicial Foreclosures?)
Wyoming Nonjudicial Foreclosure: The Steps
The bank can’t use the nonjudicial process unless you agreed to allow it to do so when you took out the loan. To determine whether the bank has this right, you’ll look to your mortgage contract. If your mortgage contains a “power of sale” clause, then the bank can use the nonjudicial process to foreclose on your home. Your mortgage documents won’t include the steps that the bank must take, however. While the contract terms give the bank permission to conduct a nonjudicial foreclosure, Wyoming law provides the steps that it must complete.
Nonjudicial Foreclosure Notices in Wyoming
Before the lender can sell your home, it must first publish a notice of sale in a newspaper one time each week (or more) for four consecutive weeks. Additionally, the bank must mail you a copy of the notice before the first date of publication. Finally, the bank must send you a notice of intent to foreclose at least ten days before the first publication. Once complete, the bank can proceed with the sale.
“Reinstating” (Catching up on) Your Mortgage
Many states have a law that gives the borrower the opportunity to catch up on past due amounts by making one lump sum payment. If done, the homeowner successfully “reinstates” the loan and stops the foreclosure. Although Wyoming doesn’t have a law that gives borrowers this right, many mortgage contracts permit it under certain conditions. You should refer to your contract or call the loan servicer (the company you make your payments to) to find out if you can reinstate your mortgage.
Owing Money After Foreclosure: The Deficiency Judgment
Depending on state law, if a house sells for less than the amount that you owe, you might still have an outstanding mortgage balance after the foreclosure. Some states allow the bank to get a “deficiency judgment” against the borrower for this amount. Other states’ anti-deficiency laws prohibit the bank from collecting the remaining balance from the foreclosed homeowner. Wyoming does not have an anti-deficiency law. The bank can get this type of judgment against you and take steps to collect any remaining balance.
(You might be able to get rid of a deficiency judgment by filing for bankruptcy. Learn more by reading Choosing the Type of Bankruptcy: Chapter 7 or 13.)
Buying Back Your House After Foreclosure
Some states let a foreclosed homeowner buy back or “redeem” a house after a foreclosure sale. Wyoming law permits a home redemption up to three months after the sale of a residential property and up to 12 months for an agricultural property. An agricultural property is a parcel of land larger than 80 acres located outside the exterior boundaries of any incorporated city, town, or recorded subdivision.
If you’d like to exercise your redemption rights following a sale, you should speak with an attorney. For more information, read When Should I Hire a Foreclosure Attorney?
Wyoming’s Foreclosure Laws
To review Wyoming’s nonjudicial foreclosure laws, go to the Wyoming Statutes (sections 34-4-101 to 34-4-113 and 1-18-101 to 1-18-115).
Questions for Your Attorney
- Should I do something if I get a notice of intent to foreclose?
- What are the eligibility requirements for a mortgage modification?
- What are my redemption rights?