Arizona Foreclosure Law

Unfortunately, foreclosures are the lead story on the local news more often than not these days, and many Arizona homeowners find themselves facing the foreclosure of their home. Foreclosure, in a nutshell, is the legal mechanism by which a mortgage lender can enforce its security interest in real estate by forcing the sale of the property that secures the mortgage loan.

Overview Of Arizona Foreclosure Law

Mortgages on homes and other real property are typically secured, meaning the borrower pledges the property as collateral for the loan. When a homeowner fails to make payments as required by the promissory note or mortgage contract, the lender may proceed to foreclose on the property. The foreclosure process in Arizona is strictly governed by statutory notice requirements, which are designed to afford the borrower sufficient opportunity to challenge the sale if it is proceeding in error and/or reinstate the loan before the sale occurs.

Non-Judicial Trustees Sales Are The Preferred Method Of Foreclosure In Arizona

In Arizona, most foreclosures proceed via a non-judicial process governed by a deed of trust executed and recorded at the time of purchase. By electing this procedure, the lender may proceed with a trustee's sale without having to file an action in court. Judicial foreclosure, however, remains an option for lenders in Arizona, and in some cases a judicial foreclosure gives the lender rights they might not have if they elected to proceed with a trustee's sale.

Regardless of whether the lender chooses a judicial or non-judicial foreclosure, the lender initiates the process by sending required written default notices followed by service of a lawsuit or formal notice of the trustee's sale. In most cases the default may be cured following receipt of this notice by paying the lender for all the back payments in addition to reasonable costs that may have been incurred.

What Happens After The Foreclosure Sale?

If the default is not cured or some other resolution is not reached, the home will be sold at auction to the highest bidder. In the event the bids are insufficient to satisfy the amount owed on the loan, the lender may buy the property itself at the foreclosure sale by submitting a credit bid up to the amount owed on the mortgage. The lender will then sell the property later via a private sale.

Of particular concern to many Arizona homeowners facing foreclosure is the possibility that the lender may file a lawsuit to recover any deficiency, meaning a shortfall in the amount received at the auction as compared to the amount owed on the note.

Consult With An Arizona Foreclosure Lawyer To Ask Your Foreclosure Questions

In the event you are facing foreclosure you should prepare yourself with a full understanding of the legal consequences by speaking with an experienced Arizona foreclosure attorney.