2006 Utah Code - 61-2c-503 — Notice to division -- Judgment against mortgage licensee -- Fraud, misrepresentation, or deceit -- Verified petition for order directing payment from fund -- Limitations and procedure.

     61-2c-503.   Notice to division -- Judgment against mortgage licensee -- Fraud, misrepresentation, or deceit -- Verified petition for order directing payment from fund -- Limitations and procedure.
     (1) (a) A person may bring a claim against the fund if the person sends a signed notification to the division at the time the person files an action:
     (i) against a licensee; and
     (ii) alleging fraud, misrepresentation, or deceit.
     (b) Within 30 calendar days of receipt of the notice described in Subsection (1)(a), the division may intervene in the action.
     (c) If a person making a claim against the fund obtains a final judgment in a court of competent jurisdiction in Utah against a licensee based on fraud, misrepresentation, or deceit in a residential mortgage loan transaction, the person making the claim may, upon termination of all proceedings including appeals, file a verified petition in the court where the judgment was entered for an order directing payment from the fund for the uncollected actual damages included in the judgment.
     (d) A recovery from the fund may not include punitive damages, interest, or court costs.
     (e) Regardless of the number of claimants or number of loans involved in a transaction, the liability of the fund may not exceed:
     (i) $15,000 for a single transaction;
     (ii) $45,000 for an individual licensee; or
     (iii) $45,000 for an entity.
     (2) A person making a claim against the fund shall:
     (a) serve a copy of the petition on the division; and
     (b) file a copy of the affidavit of the service of the petition described in Subsection (2)(a) with the court.
     (3) (a) The court shall conduct a hearing on the petition within 30 calendar days after service.
     (b) The petitioner shall recover from the fund only if the petitioner shows:
     (i) that the petitioner is not:
     (A) the spouse of the judgment debtor; or
     (B) the personal representative of the spouse of the judgment debtor;
     (ii) that the petitioner has complied with this chapter;
     (iii) that the petitioner has obtained a final judgment in the manner prescribed under this section, indicating the amount of the judgment awarded;
     (iv) that the petitioner has proved the amount still owing on the judgment at the date of the petition;
     (v) (A) that:
     (I) the petitioner has a writ of execution issued upon the judgment; and
     (II) the officer executing the writ has made a return showing that no property subject to execution in satisfaction of the judgment could be found; and
     (B) if execution is levied against the property of the judgment debtor, that:
     (I) the amount realized was insufficient to satisfy the judgment; and
     (II) a balance remains on the judgment after application of the amount realized; and
     (vi) that the petitioner has:
     (A) made reasonable searches and inquiries to ascertain whether the judgment debtor has

any interest in property, real or personal, that may satisfy the judgment; and
     (B) has exercised reasonable diligence to secure payment of the judgment from the assets of the judgment debtor.
     (4) If the petitioner satisfies the court that it is not practicable for the petitioner to comply with one or more of the requirements in Subsections (3)(b)(v) and (3)(b)(vi), the court may waive those requirements.
     (5) (a) A judgment that is the basis for a claim against the fund may not have been discharged in bankruptcy.
     (b) In the case of a bankruptcy proceeding that is open or that is commenced during the pendency of the claim, the claimant shall, prior to obtaining a claim against the fund, obtain an order from the bankruptcy court declaring the judgment and debt to be nondischargeable.

Enacted by Chapter 297, 2004 General Session