Wyoming is doing better than most of the country when it comes to home ownership. The state boasts a 70% rate of ownership, higher than the national rate of 65%. With many special programs available for first time buyers, families with children, and young adults with student loans, the Equality State is helping people buy a little piece of the American dream. Some home buyers in Wyoming look for special financing, like hard money loans, to help with purchasing or renovating an investment property or to find an alternative to borrowing from a standard lending institution. Hard money loans sometimes move faster than a typical mortgage and they usually require less paperwork. If a property owner is willing to use their home or other real estate as collateral, these loans are a popular way to go.
Wyoming Foreclosure Laws
In Wyoming, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.
The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, the property will be auctioned off to the highest bidder.
The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee.
Property Redemption after Foreclosure Sale
In some states, borrowers have a standard period of time where it is possible to get their property back after a foreclosure sale has taken place. Wyoming has a post-sale statutory right of redemption for judicial foreclosures, which would allow a party whose property has been foreclosed to reclaim that property three months after the sale by making payment in full of the sum of the unpaid loan plus 10 percent interest from the date of the sale.
When a lender forecloses on a mortgage, the total debt owed by the borrowers to the lender frequently exceeds the foreclosure sale price. The difference between the sale price and the total debt is called a deficiency. For example, if the total debt owed is $200,000, but the home only sells for $150,000 at the foreclosure sale, then the deficiency is $50,000.
In some states, the lender can seek a personal judgment against the debtor to recover the deficiency. Generally, once the lender gets a deficiency judgment, the lender may collect this amount (in our example, $50,000) from the borrowers by doing such things as garnishing the borrowers' wages or levying the borrowers' bank account.
In Wyoming, both nonjudicial and judicial foreclosure deficiency judgments are allowed. (Wyo. Stat. Ann. § 34-4-113 and § 1-18-113). Most residential foreclosures in Wyoming are nonjudicial, which means the lender does not have to go through state court to get one. (However, sometimes Wyoming foreclosures are judicial and go through the state court system.
Deficiency After a Short Sale in Wyoming
A short sale is when you sell your home for less than the total debt balance remaining on your mortgage and the proceeds of the sale pay off a portion of the mortgage balance.
In Wyoming, a lender can get a deficiency judgment following a short sale. To avoid a deficiency judgment, the short sale agreement must expressly state that the lender waives its right to the deficiency. If the short sale agreement does not contain this waiver, the lender may file a lawsuit to obtain a deficiency judgment.
Deed in Lieu of Foreclosure
A deed in lieu of foreclosure occurs when a lender agrees to accept a deed to the property instead of foreclosing in order to obtain title. With a deed in lieu of foreclosure, the deficiency amount is the difference between the fair market value of the property and the total debt.
In Wyoming, a lender can get a deficiency judgment following a deed in lieu of foreclosure. To avoid a deficiency judgment with a deed in lieu of foreclosure, the agreement must expressly state that the transaction is in full satisfaction of the debt. If the deed in lieu of foreclosure agreement does not contain this provision, the lender may file a lawsuit to obtain a deficiency judgment against you.
Special Foreclosure Protections in Wyoming
Wyoming law extends the legal protections provided under the federal Service members Civil Relief Act to members of the Wyoming national guard who are ordered to active state service by the state or federal government for a period of more than 30 consecutive days. Wyo. Stat. Ann. § 19-11-122.
Can You Reinstate Before the Foreclosure Sale in Wyoming?
"Reinstating" is when a borrower catches up on their missed payments (plus fees and costs) in order to stop a foreclosure. Wyoming law does not give you the right to reinstate the mortgage before the sale. However, even though state law does not provide you with a legal right to reinstate, your lender may allow you to pay the money you owe to bring your account current or the terms of your mortgage contract may give you the right to reinstate before the sale.
Right of Redemption After Foreclosure in Wyoming
In some states, you can redeem (repurchase) your home within a certain period of time after the foreclosure. Foreclosed homeowners in Wyoming can redeem the home within three months from the sale date, or 12 months from the sale date, if the property is agricultural. Wyo. Stat. Ann. § 1-18-103(a),(b).
Mortgages versus Deeds of Trust
Wyoming allows both mortgages and deeds of trust. The differences between a mortgage and a deed of trust affects homeowners only when foreclosure becomes an issue. The primary difference is that a mortgage foreclosure must go through the courts, while a Deed of Trust does not. However, because Wyoming is a judiciary state, all foreclosure proceedings must go through the courts, so the difference here is small. It is important to note that some lenders prefer Deed of Trust agreements versus a mortgage because foreclosure is often faster and easier from their side of the process. If you are unsure about which one you have, look at your loan documents, contact your mortgage servicer or go to your local land records office to find out.
Additional State Laws
The maximum legal interest rate on a personal loan in Wyoming is 7%. However, consumers often unknowingly agree to waive the limit and pay higher rates by clicking "I agree" online or by signing a contract that outlines a higher interest rate than is outlined by the law. While most states, including Wyoming, have usury laws on the books that are meant to prevent unfair interest rates, most courts will defer to contract law over these simple statutes. Therefore in Wyoming, if you agree to a contract that has a higher interest rate, or additional points or fees to be paid, you are accepting that rate regardless of the state's current usury law. It is not illegal to charge a borrower fees, points or higher interest rates, if they agree to the terms of the contract in writing.
Wyoming is a homestead state. This means that property owners can file their primary residence as a homestead and will enjoy some protections designed for homeowners to keep them from losing their house or property as a result of economic hardship. The Wyoming homestead exemption is not particularly generous as you can only exempt up to $20,000 of your home ($40,000 for married couples filing jointly).
Lender Licensing Requirements
In Wyoming, anyone engaged in the business of brokering, funding, originating, servicing or purchasing residential mortgage loans or residential real estate in the state, is required by law to hold a Residential Mortgage License issued by the state.