ARIZONA FORECLOSURE LAW  
Judicial, Non-Judicial

Below you will find information concerning to Arizona foreclosure law and other real estate resources.

  • Judicial Foreclosures - YES
  • Non-Judicial Foreclosures - YES
  • Primary Security Instruments - Deed of Trust (called trust deed in Arizona), Mortgage
  • How long does it take? - About 3 months
  • Right of Redemption - Yes, Judicial foreclosures only
  • Deficiency Judgements Allowed? - Varies
  • Sale Publication Period - 41 days
  • Sale/NTS - Trustee

JUDICIAL FORECLOSURES

Whether the security document is a mortgage or a deed of trust, when the power of sale clause is not present, the lender must utilize the judicial foreclosure process provided in Arizona foreclosure law. Judicial foreclosure tends to be a longer process because the lender is now required to first file a lawsuit to obtain a court order prior to foreclosing on the home. In this process, only after the court determines and pronounces the foreclosure, will the property be sold at a public auction.

NON-JUDICIAL FORECLOSURES

If the deed of trust or mortgage contains a power of sale clause, the lender is free to foreclose without court action in Arizona foreclosure law. The power of sale clause may or may not specify the details of a foreclosure. This type of sale is strictly regulated and the lender must follow its guidelines.

PRIMARY SECURITY DOCUMENT

The power of sale is the lenders' preferred process of foreclosure in Arizona, because it does not call for court involvement. This is the reason why the deed of trust is the primary security instrument in this state, as it usually contains a power of sale clause; which gives the lender or its representative (trustee) the authority to proceed with the foreclosure without a court order.

TIMELINE

If the power of sale clause specifies the timeline of a foreclosure in the event of default, that timeline in the security document is utilized. In the event the power of sale does not state the details of the foreclosure, the following guidelines are followed in Arizona foreclosure law:

After the 90-day period determined by the recording date of the Notice of Default, the homeowner receives a notice of sale. This benchmark is the beginning of the pre-foreclosure process. The lender has 5 days after the notice of sale is recorded to notify the homeowner via certified mail. Furthermore, the sales information must also be published in the major county paper at least once a week for 4 consecutive weeks and the last ad must run within 10 days of the scheduled sale date. If it can be done without disruption of peace, the lender has the option to post a notice of sale on the property at least 20 days prior to the sale date, another notice at the courthouse and yet another one at a pre-determined location at the trustee's place of business. The sale conducted by the trustee or its representative is for cash and the property is sold to the highest bidder. The lender, however, is entitle to a credit bid to cancel part or the entire amount the borrower owes as opposed to cash. The highest bidder is given until 5PM of the same day of the bid (with exceptions of Saturdays and legal Holidays) to pay for the property. If the bidder doesn't pay for the property as agreed, the trustee may either give the buyer an extension to come up with the payment or postpone the sale for another day, time and place by a public declaration at the last place of auction; no further notice is required. All proceeds from the sale will be applied to the satisfaction of the primary lien holder and subsequently to other junior liens.

RIGHT OF REDEMPTION

Arizona foreclosure law does not recognize the right of redemption regardless of the security instrument. Often, with the non-judicial or power of sale foreclosure process, there is no right of redemption period, which would allow homeowners to get back their home by paying the outstanding balance in full, which would also include all foreclosure costs accrued. If the state permits, the judicial process frequently recognizes a twelve-month right of redemption period.

DEFICIENCY JUDGMENT

Deficiency Judgment is a suit filed against the homeowner to collect any outstanding balance that was not satisfied by the foreclosure auction sale. Lenders in Arizona cannot file such suit against any homeowner whose foreclosed single family dwelling or single two-family residence is less than 2.5 acres.

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