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Foreclosure Basics

Legal Disclaimer: The following is basic legal information, provided as a public service by Wyoming’s lawyers. The information provided is not a substitute for speaking to an attorney. Only an attorney can give you legal advice regarding your specific situation. Click here for help finding a lawyer.

What is foreclosure?

Foreclosure is a legal proceeding to terminate a borrower's interest in property.  It is instituted by the lender either to gain title or to force a sale in order to satisfy the unpaid debt secured by the property.

Are there different types of foreclosure?

Yes.  Wyoming law recognizes both judicial and nonjudicial foreclosures.

What are the differences between judicial and nonjudicial foreclosures?

Judicial foreclosure is a costly and time-consuming foreclosure method by which the mortgaged property is sold through a court proceeding.  Judicial foreclosure requires many standard legal steps such as the filing of a complaint, service of process, notice, and a hearing.  Judicial foreclosure is available in all jurisdictions and is the exclusive or most common method of foreclosure in at least 20 states.

Nonjudicial foreclosure is a foreclosure method that does not require court involvement.  Power-of-sale foreclosure is a common type of nonjudicial foreclosure.

What is power-of-sale foreclosure?

Power-of-sale foreclosure is a foreclosure process that operates according to the mortgage instrument and/or state statute.  In Wyoming, the power-of-sale foreclosure statutes are labelled foreclosure by advertisement.

What is a power-of-sale clause?

A power-of-sale clause is a provision contained in a mortgage instrument that permits a lender to nonjudicially foreclose on a debt in the event of default.  A power-of-sale clause in a mortgage instrument is required for nonjudicial foreclosures.

When can a lender foreclose?

A lender can foreclose whenever a borrower defaults on an obligation contained in the mortgage instrument.

When does default occur?

Default occurs whenever a borrower fails to perform any duty required by the mortgage instrument.  Generally, default occurs when a borrower fails to make a payment on time.

What happens if I default?

If a borrower defaults on a mortgage instrument, the lender has the option to foreclose.  The manner of foreclosure is determined by the mortgage instrument and state statutes.  The relevant Wyoming statutes can be found here. 

What can I do to keep my home if I default on my loan?

Lenders will often send a notice to a borrower if the loan is in default.  Usually, a borrower will have a chance to "cure" the default.  Generally, a borrower can cure the default by paying any payments that are past due.  However, the ability to "cure" is determined by state law and/or the mortgage instrument.  In Wyoming, a lender is not statutorily required to give the borrower an opportunity to cure the default.

What else can I do to keep my home?

If a borrower is unable to cure the default, they will likely still have a right of redemption.  The manner of redemption may be detailed in the mortgage instrument and/or state statute.  In Wyoming, a borrower has the statutory right of redemption for three months from the date of the foreclosure sale.  In order to exercise the right of redemption, a borrower must pay the amount of the purchase price from the foreclosure sale, together with interest at the rate of 10% per year from the date of the sale, plus the amount of any other purchaser expenses, with interest.

How long can I stay in my foreclosed home?

In Wyoming, a borrower can reside in the foreclosed home for up to 3 months after the foreclosure sale.

What is a deficiency judgment?

A deficiency judgment is a judgment against a borrower for the unpaid balance of the debt if a foreclosure sale fails to yield the full amount of the debt due.  Wyoming law allows for deficiency judgments.