Idaho has a relatively average rate of homeownership when compared to the rest of the country. It dropped a little bit over the past few years, following the national housing crisis but is holding steady around 62%. Homeowners in the Gem State want to own their own piece of the American dream, but many seek out alternative funding options because big bank loans can take a long time and require quite a bit of paperwork. Individual investors and small group investment firms are finding success with offering Idaho buyers hard money loans. These quick-funding loans are secured because the buyer uses their home or other owned real estate as collateral for the loan. In times when many people cannot pay to renovate or buy a home, hard money loans give opportunity for swift financing and less paperwork.
Idaho Foreclosure Laws
Lenders in Idaho seeking a foreclosure have the option manage it through the state court system, called a judicial foreclosure; or they can manage the process outside of the court system, called a non-judicial foreclosure. The vast majority choose to go with non-judicial because they can complete the process much faster and because the redemption period - the time a homeowner has to get the house back after foreclosure - is much shorter with a non-judicial foreclosure.
Property Redemption after Foreclosure Sale
In some states, the foreclosed homeowner can redeem (repurchase) the home within a certain period of time after the foreclosure. In Idaho, homeowners that lose their home to a foreclosure cannot redeem the home following a non-judicial foreclosure. Idaho Code Ann. § 45-1508.
However, if the foreclosure was managed by the state courts, a judicial foreclosure, then the homeowner has a right to redeem the home up to six months after the actual sale of the property - and they have up to 12 months if the property is more than 20 acres.
Deficiency Judgments in Idaho
When the total mortgage debt exceeds the foreclosure sale price, the difference is called a "deficiency." Some states allow the lender to seek a personal judgment (called a "deficiency judgment") against the borrower for this amount, while other states prohibit deficiency judgments with what are called anti-deficiency laws. In Idaho, the foreclosing party can pursue a deficiency judgment by filing a separate lawsuit within three months after the foreclosure sale. The amount of the deficiency judgment cannot exceed the difference between the entire amount of the indebtedness and the property's fair market value at the time of the foreclosure sale. Idaho Code Ann. § 45-1512.
Deed in Lieu of Foreclosure
In addition to trying to pay for a home that's been foreclosed on, homeowners can face many additional expenses, such as legal costs, when trying to fight the foreclosure. In Idaho, homeowners who do not wish to accrue additional expenses can choose to move forward with a special agreement called a deed in lieu of foreclosure. This option can help the lender save time and money. It is an agreement between the borrower and lender where the homeowner volunteers to give possession of the property to the mortgage company and both parties are able to avoid the whole process of foreclosure. This agreement, also called "cash for keys," does not automatically protect the borrower from deficiency judgments, but many are able to negotiate that in the agreement.
Grace Period Notice
In Idaho, there is no official grace period to delay a foreclosure proceeding. However, standard rules about the timing of notices throughout the process do help to build in time for a homeowner trying to catch up on payments or to make arrangements with the lender to keep the home. Any lender seeking foreclosure must mail the homeowner a notice of default and a 120-day notice of sale before the date set for sale. They must also make attempt to personally serve occupant with notice of sale and post notice of sale on property at least 30 days before the sale, as well as publish notice of sale over four consecutive weeks at least 30 days before sale. The notice of default must be accompanied by a modification request form. The lender must respond to a request for modification within 45 days and may not proceed to a foreclosure sale until it has responded to the modification request.
Protections For Military Service Members
Idaho law extends protections of federal Servicemembers Civil Relief Act to the state's National Guard members who are ordered into state active duty by the Governor in certain circumstances. Idaho Code § 46-409
High Risk Mortgage Protections
Some homeowners have what is called high risk mortgage, with very high interest rates or a big balloon payment. Many states provide special protections for these people but in Idaho, there are not special protections for homeowners with high risk mortgages.
Additional State Laws
The maximum interest rate allowed by law is 12%. The state of Idaho imposes a 12 percent limit on interest rates in most cases, although credit cards and other debt products imported from other states may have much higher rates.
Idaho is a homestead state. Under Idaho's homestead statute, property owners may designate $100,000 worth of their property (including all land, homes, mobile homes, improvements, etc.) as a homestead. While married couples may not double that amount (as in some other states), it's a fairly generous limit.
Lender Licensing Requirements
In Idaho, a license is required for all offices, other than the main office identified on the Mortgage Broker/Lender License, whether located in Idaho or not, which directly or indirectly conducts mortgage origination activity on residential property located in Idaho.
Hard Money Legal Issues in the News in Idaho