Timeline:
90 days
Redemption:
none
Deficiency
Judgments: depends on circumstances
Judicial
Foreclosure: Yes
Non-Judicial
Foreclosure: Yes
Security
Instruments: Deed of Trust, Mortgage
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The
Judicial Foreclosure process in Arizona is rarely used. It would
be followed only if the original loan documents do not contain
a “power of sale” clause, or if the lender is planning to sue
for a deficiency judgment. If this process is used, the lender
sues the borrower to obtain a decree of foreclosure and an order
of sale.
The
Non-Judicial Foreclosure process is the most common practice
in Arizona . The lender's trustee first records a notice of
sale in the county in which the property is located. The borrower
must be served a copy of the notice within five (5) days of
it being recorded. The serving may be done by mail or certified
mail. A copy of the notice must be posted at the county courthouse
at least twenty (20) days before the sale. |
Also,
the notice must be published in a newspaper for four consecutive
weeks. The last publication of the notice of sale can not be
less than ten (10) days before the scheduled sale date.
The
trustee conducts the sale and the property is sold to the highest
bidder. The purchaser of the property must pay the trustee by
5:00 pm on the next business day following the sale of the property.
If the high bidder does not make payment, the sale may be continued
or rescheduled for another time or place. However, the trustee
may offer the property to the second highest bidder. The deed
the highest bidder receives upon payment and completion of the
sale is a trustee's deed. The lender will usually bid the amount
that is due for the loan, plus costs that have accrued. This
way, if no one else puts a bid on the property, ownership will
revert to the original lender.
Deficiency
judgments are not allowed if the foreclosed property consisted
of 2.5 acres or less, and was a single family or two family
dwelling. Deficiency judgments may be sought on any other types
of property and the deficiency suit must be filed by the 90th
day after the sale.
Arizona Foreclosure Law